Specifically, right at the moment, I'm looking at why you shouldn't buy a house in Hay River. Obvious reason: they're very badly built. I have yet to see a single house in Hay River where the supporting beam complies with the National Building Code. And apparently, I'm not the only one: the 2006 census reported that 20% of occupied private dwellings in Hay River require major repairs. The national average is 8%.
Bad enough? Not yet! The average value of owned dwellings, from the same census, is $176,903, versus the national average of $263,369. Value, mind you. Prices are a different story. I don't have numbers for this, though I'll find out some day, but house prices are exorbitant. There is a falling-down old trailer for sale for $75,000. What the? You can get a brand new Moduline ordered to your specifications for that price. A trailer that's not falling down, but still decades old, on a lot, lists for $175,000 and more. A typical badly-built house from the 1970s or 1980s lists for a good $290,000. And the scariest thing is, some of them even sell.
As for a brand new house, that would be the worst buy of all. Building a house here averages $220 per square feet, according to my lawyer. That means you'd pay $264,000 for 1200 sq.ft. - the size of a 16-wide trailer. Again, a brand-new, properly built trailer that size costs less than $100,000. And the trailer will be done right, whereas the house will be badly made for that price. Like I said, I've yet to see one that complies with the NBC. If you actually take your tools out and start to work on them, they're a disaster. I wouldn't buy a single one of them.
So the thing is, while the value of houses is 31% less, the price is much higher. How much higher? Well, per the same census, the median monthly payment for owner-occupied dwellings (i.e., the mortgage payment), is $1,051 here, versus $839 nationally. So the houses are worth 31% less, but people pay 25% more for them. I can't quite compare the two since they're giving me the average value and median payment, but assuming the average and median are fairly close (which isn't necessarily true), that would mean people are overpaying by 86%. On average. Average. That means some pay even more than that.
Now what about rent? The median rent is $851 versus $671 nationally, so 27% more. And yet the rental dwellings are even worse than the owned ones. Besides, our median rent is skewed downwards by the fact that we have a very high number of public housing units. Again, I don't have the numbers (yet), but I've never seen so many public housing units in one place in my life. And of course, housing rent ranges from free to 33% of your income. (Yes, the minimum rent is going up to $79 or so, but this is 2006 data.)
Mind you, the median income is 57% higher than the national average, but as we've seen before (not on this blog - in a letter I wrote to the paper a year ago of which I can't find the file right now), there is a vast difference between the 43% of people who work in government jobs, and the rest of us. Specifically, the government jobs pay 82% more, if I recall correctly. So the 43% in government earn 211% of the national average, and the rest earn only 116%. Yet everyone pays the same inflated housing amounts, so for the non-government workers, we pay 27% more rent out of only 16% more income. For a dwelling that's worth 31% less and has a 1 in 5 chance of needing major repairs.
Again, the fact that some numbers are averages and some are medians makes these comparisons not altogether accurate, but it's a fair approximation.
The saddest thing, I guess, is that the artificially high government wages can keep the housing bubble from collapsing notwithstanding anything that happens in the real world, like say, a recession and deleveraging. That's been going on for nearly four years on the outside, but here, people still buy and try to sell houses for the same inflated prices that prevailed before the fall. And because they can keep getting false prices for houses that are badly built to ancient codes or no code at all, the said houses don't get bulldozed and replaced as they ought. Wouldn't be much point anyway - you get the same people doing the building, you get the same bad work at the same inflated price.
You want my opinion? You must, since you're reading this blog. Then buy a manufactured home. They're beautiful, they're priced fairly, and you can take them with you when you leave.
Bad enough? Not yet! The average value of owned dwellings, from the same census, is $176,903, versus the national average of $263,369. Value, mind you. Prices are a different story. I don't have numbers for this, though I'll find out some day, but house prices are exorbitant. There is a falling-down old trailer for sale for $75,000. What the? You can get a brand new Moduline ordered to your specifications for that price. A trailer that's not falling down, but still decades old, on a lot, lists for $175,000 and more. A typical badly-built house from the 1970s or 1980s lists for a good $290,000. And the scariest thing is, some of them even sell.
As for a brand new house, that would be the worst buy of all. Building a house here averages $220 per square feet, according to my lawyer. That means you'd pay $264,000 for 1200 sq.ft. - the size of a 16-wide trailer. Again, a brand-new, properly built trailer that size costs less than $100,000. And the trailer will be done right, whereas the house will be badly made for that price. Like I said, I've yet to see one that complies with the NBC. If you actually take your tools out and start to work on them, they're a disaster. I wouldn't buy a single one of them.
So the thing is, while the value of houses is 31% less, the price is much higher. How much higher? Well, per the same census, the median monthly payment for owner-occupied dwellings (i.e., the mortgage payment), is $1,051 here, versus $839 nationally. So the houses are worth 31% less, but people pay 25% more for them. I can't quite compare the two since they're giving me the average value and median payment, but assuming the average and median are fairly close (which isn't necessarily true), that would mean people are overpaying by 86%. On average. Average. That means some pay even more than that.
Now what about rent? The median rent is $851 versus $671 nationally, so 27% more. And yet the rental dwellings are even worse than the owned ones. Besides, our median rent is skewed downwards by the fact that we have a very high number of public housing units. Again, I don't have the numbers (yet), but I've never seen so many public housing units in one place in my life. And of course, housing rent ranges from free to 33% of your income. (Yes, the minimum rent is going up to $79 or so, but this is 2006 data.)
Mind you, the median income is 57% higher than the national average, but as we've seen before (not on this blog - in a letter I wrote to the paper a year ago of which I can't find the file right now), there is a vast difference between the 43% of people who work in government jobs, and the rest of us. Specifically, the government jobs pay 82% more, if I recall correctly. So the 43% in government earn 211% of the national average, and the rest earn only 116%. Yet everyone pays the same inflated housing amounts, so for the non-government workers, we pay 27% more rent out of only 16% more income. For a dwelling that's worth 31% less and has a 1 in 5 chance of needing major repairs.
Again, the fact that some numbers are averages and some are medians makes these comparisons not altogether accurate, but it's a fair approximation.
The saddest thing, I guess, is that the artificially high government wages can keep the housing bubble from collapsing notwithstanding anything that happens in the real world, like say, a recession and deleveraging. That's been going on for nearly four years on the outside, but here, people still buy and try to sell houses for the same inflated prices that prevailed before the fall. And because they can keep getting false prices for houses that are badly built to ancient codes or no code at all, the said houses don't get bulldozed and replaced as they ought. Wouldn't be much point anyway - you get the same people doing the building, you get the same bad work at the same inflated price.
You want my opinion? You must, since you're reading this blog. Then buy a manufactured home. They're beautiful, they're priced fairly, and you can take them with you when you leave.
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