The $800,000 Teardown

I came across a real estate ad for a beautiful Toronto home today. Large, treed lot, seriously affluent neighborhood, good schools, and the ad assured us that "million dollar homes" were on the street. With the whole surrounding area clocking in at an average selling price of $977,777, I daresay that's right.

The 3+1 bedrooms, gas fireplace, and various amenities also sounded like comfortable living. The type of place that most ordinary folks would be more than happy to live in. Price tag: a doable figure for a "move-up buyer" at $779,000. With bidding wars, that pushes just over $800,000.

Then you notice the fine print, or at least, the serving suggestion. "Move in or build!". Yes, the realtor was hinting that this, like so many modest homes on oversized lots in established neighborhoods, is a prime candidate for a tear-down. Someone will spend $800,000 to haul away the previous owners' lovely home, and pour in another $700,000+ to build a custom job. Another "million dollar home" now on the street.

When you see stuff like that, do you wonder if it's all gotten out of hand?

Well, it's all relative, isn't it?

In high end real estate, it looks like all of the growth right now is at the lower end, the $1.0-2.5 million range. Outside of Manhattan, in bad times, the awkward, garishly expensive ones will move more slowly. But at the same time, in the most desirable neighborhoods, all the "low-end" stuff gets snapped up. According to a recent report, in Toronto's posh Rosedale area, no homes between $2.3 and $5 million are currently up for sale. There are a few properties available above that. (Especially if you want to go ahead and bid $6 million on someone's $2.3 million property... even if it's not up for sale. Zillow's "name your price" concept hasn't quite made it to Canada, let alone Rosedale... but I digress.)

As much as it's easy to be glib about what most all of us would probably do -- time and money allowing -- in terms of building a custom dream home on a lot we like (perfectly functional present structure be damned), it's still a bit hard for me to get past the idea that many of these existing structures are "perfectly good." The teardown concept feels extreme when the house being torn down is anything but a tawdry mess. Am I just a wuss, or wouldn't it just be nice if some family actually moved into the $800k place, and struggled along with the existing 3+1 bdrms, maybe putting a paltry $150k or so into upgrades and an addition out the back?

It's also worth asking: do people who tear down 4-bedroom homes, to build larger, sprawling, luxury residences, feel any sense of paradox when they then turn to a range of "green home" concerns? Do they feel like the elimination of the old place, and replacing it with a new, bigger (slightly greener) place helps the environment, or not really?

Anyway...

HomeStars users increasingly rely on word of mouth research to help them plan increasingly expensive jobs. Success stories happily show up often here in our "builder" category; I offer you just one example of a well-rated company, D-Cam. Our expanded "Credentials & Financial Information" section puts the onus on owners of construction companies to state their policies on things like written contracts, and which if any professional bodies they belong to. The reviews by you, our users, fill in the real-life feedback.

From the ordinary roofing job done for working people just making ends meet, to the million-dollar dream home plan, the stakes are high for the homeowners involved. When projects don't go as planned, the consequences at either end of the economic spectrum can be tragic. (Admittedly, this may severely test different meanings of the word "tragic.") Finding a good vendor shouldn't be about luck.

Posted by Andrew Goodman
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