Quote:
Originally Posted by MacDougalbry
I disagree somewhat; if prices tumble in the suburbs, it will affect downtown real estate as well. Even people who love urban life can be tempted out to the suburbs if the price difference is large enough; the money saved can be applied to other lifestyle goals... travel, early retirement, reduced working hours, etc..
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No (well always somewhat, but they are not directly linked), because downtown real estate is (1) finite and (2) improvable.
Far flung suburban property is both infinite (in Calgary's case, not in say, Vancouver's case) and not improvable - thanks to the way those areas are now designed.
Lastly, and i wish i could draw this out, but the further you go from the core the more land you get in every direction with less radius added. So from the center of a circle the amount of land added by adding 1km in radius goes up drastically with each 1km added. As such, the further you go from downtown the less valuable your home is relative to all other homes built further out. Does that make sense?
The value of real estate as it relates to proximity to the core and scarcity or comparable land is not linear as many believe, but rather is exponential (<Although it may have another mathmatical term relating to growing cirlces? Anyone know?).
This is also why homes in the far West are more valuable then homes to the far East or North. Land is only restricted to the West, and mountain views are not replacable. This creates some scarcity that translates into higher prices. The same cannot be said for most of the rest of the cities perifery. The fact that they are also known as wealthy areas is linked into a circle of logic with the inherient reasons for such land value.
Claeren.