Quote:
Originally Posted by TorqueDog
When it comes to purchasing a long-term asset (such as a home), perception of inferiority is as good as actually being inferior. It's why it costs less, and why it will not hold value like the properties perceived as superior by comparison.
Functionally, they can be the same. A house exactly like mine in Altadore today is $100k more than I paid for mine 1 3/4 years ago. Probably would have fetched even more back then as the market was not dropping as quickly as it is now. Square-footage, mine is bigger by ~50 sq-ft. Developed basement, same. Year built, mine's newer. Double garage, yup. My neighbourhood / street is quieter, no reason for people to use it as through access. Access to Crowchild and Glenmore is equal, both houses are within 60 seconds to the same interchange. But, it's $100k more to be on the east side of Crowchild Trail at 50th Ave.
My property will likely not hold its value quite as well as the Altadore version, and will not command a price as high, either. For no real reason other than the perception that being on one side of Crowchild is better. But perception of inferiority in this instance is as good as the real thing; the impact is the same.
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Aside from the fact you save 3k per year in interest for 20 years or so or you get 100k larger house.
If the relative perception remains the same from an investment point of view it is unchanged.
Also the initial argument was using price to argue a neighbourhood was better. I think your post counters that nicely. You can get the same quality of life for less money ergo your neighborhood is superior to the Altadore version.