Houses, Salaries and Debt
It's sort of an expensive subdivision, it's no Bridle-Path or swanky Richmond Hill address, but its' mortgage load is above average, so to speak. Let me even take one step back - all neighbourhoods north of Toronto carry a high price tag... +$400k for a detached home. A home that requires a household income greater than $150k to sustain.
I then wander over to Glassdoor.com, a new site that tracks salaries in North America via anonymous reporting and ratings of various employers.
Unless you are a rocket scientist at Google, or a serious banking type or corporate executive, it's unlikely you are making much more than $70K, and that's an excellent job in Canada.
The exceptions - folks making over $120K must be few and far between, based on the Glassdoor results.
Not everyone in my neighbourhood can be a V.P of something fancy. So - if most have a reasonably average paycheck, how the heck are they paying their mortgage and living? Where are these people working? Is there a cache of secret, super-highpaying jobs somewhere in Ontario?
Sure - households can have 2 incomes, but as soon as you throw some kids into that, your debt ratio must trampoline through the roof. There are A LOT of kids in my neighbourhood. Is everyone living off of credit? Do the nice folks two doors down with the great backyard have thousands in debt? I don't mind coveting their back yard, but not if their debt comes with it.
I don't get it. Some families I know had more than $80k of debt, just from living expenses. Carrying it until a time when their situation can change and they can pay it off. Even debt in the $20k range scares the heck out of me, if it's been created to support a household.
It's the great unknown, I suppose. Hefty mortgages, average household incomes, ridiculous debt. Welcome to Toronto.
Macleans has a very timely article this week about the potential downfall of the Canadian Housing Industry.
We could be in for a case of the crashes, slightly less serious, but comparable on a smaller scale to what the US is facing.
“Nobody likes to see their property values go down, but those values are inevitably tethered to economic reality,” Wolf told Maclean’s. “The reality is that after a wonderful few years, we’ve finally reached the end.”
I’m now looking around wondering how many people bought cheap in this neighbourhood, and refinanced their equity, assuming that the value of their home was simply going to continue to increase.