Price Gouging?

About a year ago I re-posted this piece from 2015, mostly so that my mother could read it – she didn’t get online until she turned 88 in 2017. I’m repeating it today because my sister sent me a late-night text.

It was a real estate picture of the house and the question, “isn’t this where you used to live?”  It was The house is for sale again, after only five years. The price has gone up considerably, again, and I’ll tack that on at the end.  

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You can’t see the big rock in the front yard; it is just to the right of the picture.

We pulled over to the side of the road so I could check the real estate listing on my phone. Given the area of town I thought I had a fairly good idea of what the house should be listed for.

It was just idle curiosity. I had no intention of buying it. Too small for me, too far away from decent public transit. It looked very pretty though, a bungalow nestled in the trees.

When the sale price came up on the phone’s screen I don’t know who was more astonished. Perhaps neither of us: Maybe I was astounded while my mother was flabbergasted. The number seemed surreal. Two hundred thousand dollars more than my mental estimate, which I had thought high to begin with. For a 1200 square foot house?

Tuesday was errand day. Ever the dutiful son, I had set aside time to take my mother to some medical appointments. While we drove we were talking about the changes in the city over the years, how neighbourhoods have changed.

With time between appointments I suggested we drive by the old family residence, the one my parents bought around the time I was born. It had been at least a decade since I last drove by, probably longer for my mother.

The house is in one of Ottawa’s more desirable neighbourhoods, upper middle class but not really upscale in my opinion. I had forgotten how nice the tree-lined streets were and that the house backs on to a park. In 1955 when my parents bought the place, they paid $12,000.

There have been some changes over the years, but not many. A one-car garage has been added, but the house remains a starter home. It’s a bungalow, two bedrooms and one bathroom, a little off the beaten path. My parents had to walk for 15 minutes on an unpaved road to catch the bus to go to the hospital for my birth. The bus stop hasn’t gotten any closer.

My parents sold the house in 1957, or perhaps early 1958, my father having been transferred to Montreal. Or maybe he had a new job there, I’m not certain. I’m sure my mother knows. They sold at a profit, the house went for $12,500. My memory of those years is a little hazy. I remember the house, but I suspect those memories come from subsequent visits as a child, not from when I lived there.

Fast forward to today, with the house is once again for sale, looking pretty much the same as it did 60 years ago. There is a large rock still in the front yard, the one my father painted red to match the house. My parents couldn’t afford the cost of having it removed.

I don’t think the real estate agent thinks much of the house, if the listing in anything to go by.

‘This house is all about location! While the property itself features 2 bedrooms, 1 bath and a sun filled living room, the value lies in the lot and its possibilities. Add on or start from scratch, the choices are endless. Perfect location on a perfect street. Appealing to all contractors or purchasers with a dream. This lot awaits your vision’

Do you read that the same way I do? They expect whoever buys the place to knock down my childhood home and build something new.

I had thought that given the neighbourhood the house, despite its small size, would sell for about $400,000. That would be a sizeable increase from the price it sold for 60 years ago. I was wrong though. Asking price is $599,900, 50 times what my parents paid for it. No wonder my mother and I were a bit discombobulated.

Five years later it is 2020 and my mother is no longer around to be shocked at how much her little bungalow is selling for. It’s on the market again, at $825,000. I can’t believe real estate values have escalated that much in five years. almost makes me wish I had shelled out the $600,000 last time – to make $225,000 in five years would be a pretty fair return on investment.

But would you pay so much money for such a small place? I wouldn’t.

Five years from now maybe they will be asking a million dollars.

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