Real Estate Afterword: Things We Learned

1. Stuff is really expensive here, but cheap for a city of this size and quality. We just have to deal with it.

1A. Apparently, economists are right about markets. People (i.e., Carrie and I) can be convinced that anything is worth anything. It just takes awhile and slowly one starts to think in terms of the prices. We entered horrified at the prices and at the end, felt like we got a fair deal (maybe not a bargain but not a ripoff either) for a place that cost about 4 times what we paid in Pittsburgh in 1999.

2. Other people’s real estate agents routinely exaggerate the size of the dwellings they are selling. 2000 square feet can mean 1500 useable square feet net, or it can really mean 2000 square feet. There’s also the matter of layout, which may give you more or less wall space and storage.

3. Even though you can’t really get a “buyer’s agent” in Montreal, a good agent will be loyal and advocate for you.

4. People complain about the welcome tax, but it’s just another real estate sales tax like in the U.S.

5. Mortgages in Canada are NOT as good a deal as in the U.S. You pay a penalty for paying out early, and they won’t let you lock in an interest rate for the life of the loan. The result is that incentives are such that usually the best bet for interest rates is a 5-year fixed rate amortized over 15 or 25 years. And you don’t get a tax break on interest. On the upside, rates are lower than in the U.S., or at least have been.

5A. Therefore, the incentives for owning are largely ideological: control over one’s own space and the idea that at least part of those massive monthly payments are going into equity. I did some rough calculations before we made our first offer and discovered that owning is probably less of a good choice financially than renting (in the city at least). It is unlikely that we will, in the mid-term, make much more money owning than renting when you balance out the amount of money we were able to sock away each month in our rental vs. taxes, condo fees or repairs (where there is no condo), mortgage interest, likely appreciation over time (barring another real estate boom here, which is unlikely in the near to mid future), the cost of moving, that there is no mortgage interest tax deduction in Canada, that there is some risk given that our mortgage interest rate is only locked in for 5 years (you can go longer but no more than 10), and a maximum rent increase of approximately 4% a year. All that said, without a doubt the place we own is nicer and in better shape than the place we rented.

6. You can be picky about neighborhood, you can be picky about space, you can be picky about price. Pick two or expect to look for a long time.

7. Size and cost appear to be more or less unrelated beyond a certain threshhold.

8. Water here is FREE. In the U.S., one must pay for metered water and the use of sewers. I’m sure that our taxes cover it, but the experience of free water is delightful. It’s just the idea of it. In a proper country, one needn’t pay for the necessities of life. Oh yeah, except for heat. Oops.

9. All that reading of real estate ads did help us in one respect: when our landlord told us that it was up to us to find a new tenant and assign the lease, we knew how to put together an ad to go with our Craigslist listing.

10. We discovered the city. In the process of considering different living options, we discovered many neighborhoods that we otherwise wouldn’t have visited. Many Montreal natives have a strong investment in neighborhood and wouldn’t consider living outside a few particular places. These are especially conditioned by language — there is still a strong sense that language ought to determine where you live. Like the impulse to own (vs. rent), the impulse to live in a particular place is also largely ideological. Sure, real estate wisdom says that it’s “location, location, location,” but the truth is that there are so many attractive locations in the city that the choice turns on other things — familiarity and comfort being two of them.

As immigrants, we see the city differently than “natives” do.

Our neighborhood is largely understood as a Francophone neighborhood, though we hear many other languages spoken (including, sometimes, English) and so have concluded that while there may be a plurality of Francophones in Villeray, there is not a majority. The majority might even be Allophone at this point. Still, we get questions about why two Anglophones would live in a Francophone neighborhood. After 3 years in Hochelaga-Maisonneuve, we see nothing strange about it at all.

Thus ends my discourse on real estate.

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