As you realize, I've been very involved in Occupy Saskatoon activities.
But, I never miss a chance to learn things.
1. The average house in Canada now costs about $350,000. That's the average. I've known that for a while.
How many people can afford to buy that "average" house?
2. In 1978, the average income in Canada was $49,000. Today, adjusted for inflation, the average income is $47,000. You read that right; the average wage earner is $2,000 behind were he/she was in 1978.
Is it any wonder that ordinary people are having trouble keeping up?
By the way, the person in the top 1% of earners is between two and four times richer than in 1978.
Can you say "Income Growth Inequality"? Sure you can.
If you can spend 30% of your income of $60,000 (the average now), it would take you to $18,000.00. At that rate, it would take you 20 years to pay for the average house you want to buy. Of course, that doesn't include all the interest you pay to the bank for the loan!
Now, aren't you glad you know that?
I'm glad. I'm also a bit on the terrified side. It is not easy to terrify a Bear.
26 comments:
That is a scary set of numbers . . .
Oh Bear, you know it!
Hey, take it from this NY pal of yours, lots of us are quite worried about today and tomorrow, and the day after that.
I think that it's this concern from lots of "good citizens who've played by the rules" and young folks who are just out of university, loaded with debt, and no career in sight, that's got folks setting up "Occupy" areas in many locations.
The cynical amongst us (remember Bear, I am a Virgo) might have seen this coming a long ways off.
Where "this" heads next is much more difficult to describe.
I would so like you to do a post with more detail about what is going on in your locale.
xo
What I don't understand is why land/houses have to cost so much to begin with. I know, its so the rich can get richer and the poor, poorer but it is ridiculous the cost of real estate. Several years ago we lived in Laguna Niguel, California, a mere six miles from the beach, a mere 10 miles from Laguna Beach, home of big houses, etc. But the funny thing is the average neighborhood where I would walk the dog, the houses were million dollar houses. They weren't mansions, but average size 3 to 4 bedroom houses, 1800 to 2000 square feet. Ridiculous someone would sell a house for that, ridiculous someone would buy a house for that. Of course the market dropped and houses aren't quite going for that in that particular neighborhood these days. Maybe we need to reevaluate if the American dream (or Canadian dream) is really to own your own home.
betty
® Golden Eagle: They scare Bear, too. (I think I already said that.) My guess is that US figures are not all that different. Thanks for the observation.
® rosaria: Thank you. Bear has had a long career of "sharing the information."
® That Corgi: Land and houses cost so much because that is what the developers charge. Or, more specifically, what they think they can chaarge and get away with it.
Developers are not in business for the good of their health. They're in business to make as big a profit as they can.
And what developers charge for new houses is reflected in the costs of other houses which are for sale.
Thanks for sharing your puzzlement.
Land is the big cost and location drives it. The cost of developing the land (roads, utilities etc.) does not vary so much. The cost per square meter of house is not nearly so variable. Almost ocean front property in California is pretty desirable location. the price of houses was driven up by the believe that the price of houses would always be driven up.
I hear it takes over $200,000 to buy a starter house in Regina now. My $65000 house on Atkinson would have been worth a fair bit. Wonder if real estate in Zhovti Vody will boom?
Speculators, developers and all those hyper capitalists that have our politicians in their very deep pockets are a scourge but a scourge that we maintain by our consuming habits. The MARKET is king and the consumers support the market.
Should consumers stop buying those Lexus, luxury condos and all those grossly overpriced goods, the capitalists would either adapt or go belly up.
But then we are caught in a vicious circle: to face those spiraling costs we all look for matching revenues, to match the higher salaries the capitalists raise prices to maintain their profits...and we start all over again.
What we need is a profit cap, the rest will follow.
It is true everywhere. The working man has lost ground while the big money has been pooling at the top. As for housing, it has been going up much faster than people's incomes for a couple of decades now. Our home that we raised our family in cost $125,000 when we bought it in 1988. It sold the last time for over $400,000. Same house. I don't know how we can expect young families to buy homes that cost $350,00 and up when their wages have been falling, adjusting for inflation, since 1980. Our daughters make no more than we did when we bought that home for $125,000, and it was a stretch for us at that time. It's just crazy. I've been watching housing in Portland, where we want to retire in a couple of years, and there are pages and pages of million dollar homes just sitting. No one in their right mind would buy one of those homes now, even if you could afford to.
Well, as a builder there is a little bit more to it than what you said in your last comment. The cost of material is sky-high through the roof right now. We don't have labor because we do it all ourselves...no subs. We make a living building one house at a time but it is getting harder and harder. The one thing both..USA and Canada governments need to realize is that tax credits are the LAST thing on the minds of small business people. We are just trying to hang on to what we have earned through hard hard work.
The average person cannot afford the average house here either - such a sad state - scary numbers.
sandie
these are incredibly sobering statistics. being able to afford a house is hard enough for people, but learning that the average canadian income has dropped, not increased over a period of 30 years is plain depressing.
how is the occupy saskatoon movement progressing? is there increasing support for it?
Oh it is real crazy where I live in cottage country. A shack starts at that. Going over a million plus in areas around here. Especially if you want to be on the water. The land cost so much also. It was afforable at one time as you can see those living in poverty around the tourist cottages(second homes). It is amazing the gross displays of wealth I see everyday. Most of the homes where I live arent cottages but second homes. The people with average to medium incomes bought 30 years or more when they where reasonable. Housing prices are so high all round in Ontario. It is even real high to even rent. It makes you wonder how many people make it period. Pricing in those luxurys like heating and fresh food .
I don't like a scared Bear! :(
Things are pretty scary in the UK, too. You get very little in the way of a house for £100,000. A proper family home would cost £150,000 where we live and three or four times that in the south of England.
Considering that most youngsters come out of college without any job prospects or only low-paid part-time work, and that university graduates that are lucky enough to get a job will be saddled with repaying a student loan of anything between £20,000 and £50,000 (depending on the cost of their course and how much beer they drank) there's no wonder that the first-time buyer has become a dying breed and the market is stagnant.
One can ponder where it all went wrong but it is scary.
As you know, Bear, we are just about the same age. It was long ago that I realized that I would never be able to buy a home of my own. It might have been a bit more feasible were I not a single woman.
I do think that many of us have a sense that something in the economics of our existence has gone off balance.
It is very interesting to watch the spread of various current protest camps across the world. What we have more difficulty seeing is the less public lobbying efforts that often influence the big decision makers, don't you think?
Cheers!
That is an incredible price for an average house, scary. Its like there is nowhere inexpensive to go now. Funnily enough we looked at Toronto 10 years ago as a place to live (too cold, but great people) and I was shocked a the home prices - and we were coming from london
Hello, friends. I've been distracted from blogging for a while. I didn't realize so many of you had written. Thanks you for doing that.
® ain't for city girls: You have a unique way of doing things that has always fascinated me. You certainly are not an "average" business! And I don't think you are land speculators. I like your style.
Thank you for the comment about construction material costs. Can you say more about that, and why you think those costs are so high?
® Chatty Crone & Amanda: Yeah, the numbers aren't thrilling. And I do not believe American number are significantly different from Canadian ones.
Both of our children have homes. But I wonder where our grandchildren will be able to live.
Occupy Saskatoon is into it's second week. We started with ten tents and now have thirty. We also have below-freezing temperatures every night. I've camped out with Boy Scouts at -20°C (or -4F); you can do it wonderfully if you've got the equipment. Most of the people here don't have the equipment, so I worry. We have some things coming up, about which I can say more in the future.
To the surprise of some, perhaps, the folks are OS are, with only a few exceptions, working or going to university. What we do is on top of those responsibilities.
The police are great; we hardly see them, and our encounters are friendly.
We're trying to keep the park clean, or make it better than when we came.
We have a daily gathering, 5:30 each evening, so everyone can come after work or school.
® Diva: Thanks. I don't like being scared.
But I really wonder about the world in which our grandchildren live, and what they will face in terms of income and living costs.
® Jean: Thanks for sharing your own scary insights from "across the pond." Considering that £150,000 is about $250,000, you're pretty much a par with us for a reasonable family home.
® About Last Weekend: Sorry we shocked you with housing prices. Toronto's prices are well above the national average.
As for the weather, it creates hardy stock — animal and human. And the summers are warm (in fact, downright hot). Come here, and we'll teach you how to play hockey, wearing ice skates!
Not promising for our kids. I recall when the interest rates went sky high in the late 80s we kept getting letters from the bank extending the expected repayment time for our loan if we kept our payments unchanged.
Blew out to 28 years, I recall.
It's probably even worse here, but I don't have any numbers at hand. On the bright side (of my life, I mean), I lost the price of pretty decent new car in the stock market week before last, but gained it all back last week. With Peggy's retirement looming, such losses are a lot scarier than they used to be.
® J Cosmo Newbery: I remember the same time, and the provincial (state) government here giving us a cash rebate for the portion of the mortgage that went above 19%. Wasn't much, but every bit helped.
Our kids are mostly OK, it's the grandchildren I worry about.What kind of world will we give them?
® Snowbrush: Ah, yes — the joys of living in "interesting times." We've put most of our money in bond funds, rather than equities. So we sit on the side and watch the markets move sideways, and hold our values.
But markets moving up and down the price of a car is a very effective illustration of the situation.
I still think we're going to see another dip to this recession.
It is pretty much the same here in the UK. For dollars read pounds and you have it. But for the moment the Eurozone crisis is probably of more concern to us.
Rob,
You put it all into perspective so clearly. That is so sad and I was quite shocked to read that. I do feel sorry for the kids graduating today and also for those who have lost their jobs of course.
But why have people bought houses that they know won't fit into their budget? If the crooked Fannies and Freddies gave them loans they could never meet, didn't it EVER occur to these people to buy a cheaper house??? Obviously not. Where do they think the money was coming from? Three fifty is a real hefty average price for a house.
Wow! That's the AVERAGE PRICE? I'm honestly very shocked by that. I have no idea what it is around these parts, but I'd assume it is lower than that. I think.
If that's the average, I'm so far below average it's not even funny.
Hope your protest are going well. Lots of news and unrest here in Oakland.
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