Housing market still feels hot, hot, hot - $250K-homes in the St. John’s region are now often fixer-uppers

James McLeod jmcleod@thetelegram.com
Published on June 15, 2013
This house in Southlands is listed for $524,000

 

On a empty street in Southlands, real estate agent John Riche steps out of his car and rhymes off a home’s assets: two storey, detached, garage, $524,900.

“This is what people want now,” Riche says theatrically, his arms spread wide for effect. “If neighbourhoods had a flavour, this would be vanilla.”

Riche spent a morning with The Telegram to demonstrate what St. John’s real estate looks like these days.

It looks an awful lot like the beige house in Southlands that’s creatively described as being “Bailey’s Irish Cream” in colour.

“Generally when people come to see you, they’ve got pre-approved for $300,000. Some people will want to live downtown in a refurbished house that’s absolutely beautiful — they want that character — but generally, most want to be out there in a two-storey with a garage in Paradise or Southlands,” Riche said. “There’s very few $220,000 houses around that don’t need work, and (people) don’t want to raise a kid next to (a pub).”

The last house Riche showed was exactly that sort of house, on Cookstown Road — $139,900 for three bedrooms in decent condition, but a far cry from a newly built house in a subdivision somewhere.

But Riche said that’s becoming more and more of a rare bird, and while the experts say the St. John’s housing market is levelling off, buyers are still readjusting to the new normal.

“It’s crazy,” said Lisa-Marie Picco. “We bought a house three years ago, and now we’re looking again and the prices have jumped astronomically. It’s mind-blowing.”

Picco said she and her husband were expecting to pay around $250,000 for a starter house; instead, what she found was that what they’re looking for sells for more like $350,000 and higher.

Jeff Marshall, also in the market for a house, ran into the same thing. He said he’s had to adjust his expectations.

“It seems like everything is either still expensive, but in the $200,000-$250,000 range that need a lot of work or have a lot of down sides to them. Or there’s a huge gap in the market where now you’re talking about over $400,000, even for something that’s small,” he said.

Chris Janes, an analyst at the Canadian Mortgage and Housing Corp., said costs

in the past 10 years have been pretty dramatic.

 

 

“Prices have doubled since 2004,” he said. “The price growth has been the same pretty much throughout the St. John’s census metropolitan zone.”

Picco also looked at getting a new house built, and said she was gobsmacked that a plot of land will cost more than $100,000 before you even start building.

“What’s crazy is that houses aren’t as expensive to build as the land is,” she said.

That’s something that Greg Hussey, owner of Karwood Realty, already knows. He’s been building homes in the St. John’s area for more than 15 years.

“Typically, we used to buy lots in a subdivision 10 years ago at about 32,000 a lot, and pay for it when the house sells. Now we’re lucky if we pay $142,000, and you’ve got to pay for it up front,” he said, adding that it’s not just land that costs more. “We’ve really increased our labour price, but that’s only half of it. We’ve also halved our productivity.”

With work at Muskrat Falls, Long Harbour, Bull Arm and other megaprojects around the province, Hussey said Karwood has lost a lot of their veteran workers.

“We’re still losing people hand over fist to the megaprojects,” he said. “Even the dumbest guy that’s been around for 20 years is better than a good guy that’s been around for two years.”

While housing is still going up, basically everyone The Telegram talked to insisted that this is not a bubble. Hussey said that people are adjusting to the new normal, but that doesn’t make the current real estate market unhealthy.

“We’re not even caught up to Halifax prices yet,” Hussey said. “The prices have increased so much so fast, but as we start to flatten off at the top here, you’ll start to get that feel back again that, OK, this house should be around this price.”

Driving down Forest Road, Riche rattles off educated guesses — $600,000 for the yellow one on the left, $800,000 on the right, probably the one over there could sell for a million.

Down in Quidi Vidi, he shows a house that’s listed for $1.6 million. It’s nothing short of spectacular, with vaulted ceilings, a view of the Gut, and gleaming stainless steel and granite in the open-concept kitchen.

Whales swim by the back door.

“I see them every day,” says Ron Stamp the owner who’s selling the house.

A million dollars still gets you an awfully nice house in this town.

 

jmcleod@thetelegram.com

Twitter: TelegramJames