Extreme makeover: Foreclosure edition

Not much I can really add to the story that a house built in 2005 for a down-on-their-luck family on the TV show Extreme Makeover: Home Edition has gone into foreclosure.

The four-storey mini-mansion, built for the Harper family with the help of 1,800 volunteers and residents from Lake City, Georgia, will be auctioned off to the highest bidder on August 5th. The house was used as collateral for a $450,000 loan that went into default.

Sad, really. Obviously in retrospect, it's not always the greatest idea to shower people in dire financial straights with windfalls like this because they don't always know how to handle it, but this whole story also says some particularly sad things about the worsening state of the U.S. economy in general.

Housing is crashing -- unless it's not

Interesting news in the ol' newspaper this morning, albeit it's info I'm taking with a grain of salt.

Toronto real estate is off to its worst start to the year in years, with the number of housing resales dipping 22% in the first three months of the year, Tony Wong reports in The Star.

Some are blaming the dip on the city's much-publicized new "land transfer tax" (meaning there are less buyers now because there was a rush in December to get in under the wire) while others, somewhat less convincingly, are blaming the weather. I have my doubts that people are so simple as to be influenced in as major a decision as buying a home by something as nebulous as the weather, but as a friend who recently took the plunge into real estate told me, "the best piece of advice I can give you if you want to save money when you buy a house is to do it in January, and look for a house that's been on the market for a while."

That's quite the number -- 22% -- but I'm not getting carried away quite yet for a couple of reasons. No. 1, real estate was at some pretty lofty heights to begin with, so pulling back a little isn't particularly indicative of anything to me. And No. 2, shrinking volume might suggest overall activity is down, but to me, the more significant number is what's happening in prices. If prices slow their increase (never mind actually come down) that's a much more significant development, because it would signify, in broad terms, that people are actually at the point of taking losses -- not just acting a little hesitant about the process of moving in general.

So far, that doesn't appear to be happening, as this pdf shows. Overall prices are up about 4% GTA-wide, although there are some regional dips. That million-dollar house in the Annex I've been dreaming about got 6% cheaper, down to a mere $759,000, for example...

Getting closer!

As much as I'd love doomsayers like Garth Turner to be right this time, I'm not holding my breath. Still, as someone on the outside moving in, this is certainly a trend worth keeping an eye on.

Presented without comment

Some fascinating details yesterday in Statistics Canada's always-insightful The Daily.

A study on home ownership among young Canadians reveal interesting data on housing landscape for first-time buyers across the country. I'd quibble with classing everyone in the age range of 25-39 as a "young adult" but in general, the study paints an undeniable picture -- fewer and fewer people starting out in their independent lives own their own homes.

Nationally, 6 out of every 10 young people not living at home owned their place of residence, but the numbers showed a clear bias from rural to urban environments. 71% of rural young people owned their homes, while in the city of Toronto, the number was barely over half, at 53%.

Perhaps unsurprisingly, the chasm got greater the lower down the socioeconomic spectrum. 40% of rural young adults making less than $30,000 a year managed to own their own homes, whereas only 16% of urban dwellers making that much managed the same feat (and all I can say is, I'd like to meet them...)

The study similarly found that the probability of home ownership was even less for children of immigrants.

I thought this might be representative of some sort of shifting cultural attitude -- perhaps that home ownership is not as important to today's young people as it was to their parents -- but the study also found that three-quarters of respondents said home ownership was "very important" to them.

And surprises in there for anyone?

Ch-ch-ch-ch-changes

Alternate title: A moving post

With apologies to David Bowie, from whom I borrowed the title of his seminal 1972 rock anthem as a hackneyed segue, I want to talk about the costs associated with moving into nicer living accomodations.

My girlfriend and I currently live in a 1-bedroom apartment that hovers somewhere between "milk-crate-bedecked-student-accomodation" and "Volkswagen-Passat-clad-yuppie-pad" depending on how motivated to clean and or decorate the walls either of us happen to be at any given moment. Since we've both apparently recently figured out that we haven't been full time students for over two years, we've decided to test out the condo marker -- the condo rental market, that is -- to see what life is like for mid-20s urban professionals with a modicum of disposable income to spend.

We've found a nice place in a mid-sized, newish building with all the amenities (a patio, a gym, parking included) we were looking for. We'll be signing the lease imminently, the net result of which will be about an extra $200-$300 more in rent, per month, for each of us. In and of itself, that's an entirely manageable increase in monthly spending to accommodate -- expecially considering I was worried I've been cheaping out for a little while and not taking the time to smell the roses that life has to offer. (That shouldn't be a problem now as my rooftop patio allows or my own personal rose garden should I want it.)

But it's the other, ancillary costs that come with a move that can really add up. Because you're not really just signing up for an extra $250 a month. You're signing up for an extra few hundred square foot of space -- which you're probably going to want to plonk a $1000 worth of sofa into. And those extra cupboards in the kitchen need a slow-cooker and a pasta-maker to fill them up, for the low low price of a few hundred bucks.

I've never really been one of those people who gets drawn into "keeping up with the Joneses" but doing the math in my head, I think we're both going to be out as much as $1000 upfront in moving-related expenses, what with moving fees and a smattering of new furniture to be purchased.

They say buying a home is one of the most expensive things you'll ever do. I may not have a huge mortgage to worry about just yet, but in my experience -- so is moving into a bigger apartment.