Could “Circumstances” Cause Your House To Plunge In Value?

UnknownConditions

For seemingly no reason?

Or for reasons unexplained?

Or for legitimate reasons, that can be explained, but that are based on luck, happenstance, and timing?

In the news this week were three separate houses which have dropped in value because of circumstances beyond the owners’ control, either hypothetically, or quantifiably.  It all depends on whether you ask the owners themselves…

UnknownConditions

We all know “that house on Bertmount Avenue,” right?

Realtors – you all know the one.

And real estate enthusiasts, you surely have seen, or at least heard of this house.

It’s been written about quite a bit, and surely it’s been photographed incessantly over the years even though there are signs out front that explicitly tell gawkers not to take photos.  But a sign like that, on a house like this, is like asking us not to look at the streaker in the park.

In case you’re not familiar, here’s a shot from Google Maps:

BertmountHouse

I don’t want to pass judgment.

So I’ll let you guys do it for me…

Would any of you argue that perhaps, just maybe, this house looks out of the ordinary?

It’s on a prime Leslieville Street, steps from Queen, in a family-oriented area.

So could you argue that maybe it’s having an impact on the “vibe” of the street, and to a lesser extent, the home prices?

Anybody who lives on Bertmount would probably shout, “We love our street, and that house doesn’t speak for us, nor do we feel affected by its visual impact.”

I’d probably agree.

The area is so hot that most buyers wouldn’t care, and thus most home-owners wouldn’t be affected.

But there is at least one home-owner on the street that would be affected.

Can you guess who?

How about: the person who lives next door…

Bertmount

You’re literally “joined at the hip,” and I have to think that being next door to the doll-house, let alone joined as the other half of a semi-detached, could make a quarter-million-dollar difference in potential sale price, in the red-hot 2015 market.

At least if a buyer was looking to purchase on this street, they’d know in advance about the potential affect on value.

But I’d like to share with you three stories in the news recently about houses that were affected in value after the new owners moved in:

1) Bloor West Yuppies vs. Hydro Pole

In today’s news, if you can call it “news,” there was a story about a Bloor West couple that feel a hydro pole installed on their front lawn has caused their house to plunge in value.

Toronto couple says view from million dollar dream home spoiled by Toronto Hydro pole – CityNews

If you’re not willing to sit through the 15-second advertisements for Ford or Corona or whatever the hell CityNews Online is going to show, then this picture can help you to visualize:

HydroPole

The video segment starts with the reporter asking, “How do you feel when you look outside your window?”

The home-owner responds, “I don’t look out the window anymore.  It’s just….it’s just heartbreaking.”

The online article reads:

Shirley and Todd Ankenmann loved everything about the home they purchased in Bloor West Village in 2012. So much so, they paid $156,000 over the asking price.

But the million dollar property would soon have a 10-cent view after Toronto Hydro erected a pole on their front lawn.

“Just heartbreaking,” she says.

Do you know what’s heartbreaking?  Just about ANYTHING else in the news these days.

I know I set out in this blog post to talk about the effect that a random circumstance can have on your home’s value, but I’d be remiss if I didn’t say “boo-f’ing-hoo” to these two people.

I can’t believe they went on TV with this!  Aren’t they embarassed?

I read the online comments on the National Post version of the story, and we all know (myself included…) how readers are five times more likely to post something negative than positive, but 100.00% of what I read was calling these two jokers out for their complaining.

Although my favourite comment had to be this one:

PolishComment

“Heartbreaking.”

Really?

Talk about first-world problems.  I think there are a lot of folks, in a lot of places around the world, that are dealing with true heartbreak of their own right now – losing loved ones, dealing with natural disasters – who might disagree on the definition of “heartbreak.”

Personally, I think that pole has close to zero impact on the value of the house.  The CityNews quote of “a ten cent view” is silly.  They have a view of the street, not of a ravine or park.

This is much ado about nothing.  In my professional opinion, there’s no plunge in house value here.  Hydro poles are all over properties in Toronto.

2) New Jersey Residents Being HAUNTED!

Wow.

Now that is a bit more intense than an unwanted hydro pole…

Imagine a stranger stalking you and your family, and naming himself – “The Watcher.”

It’s one thing to be stalked, but to be stalked by a guy that names himself – that’s a whole other level of Criminal Minds stuff…

Imagine getting a note that reads: “I am pleased to know your name now, and the names of the young blood you have brought to me,” in reference to your CHILDREN!

The owners of the house, who paid $1.3 Million, have moved out of the house.

Of course, they’re now suing the sellers.

I don’t think they’ll have any recourse against the sellers, but nevertheless, I also don’t think they helped the value of their house by going to the media with this.

Had they dusted off their hands and said, “Well, we bought this house, it’s being haunted, and we’ll sell it and move on,” maybe they’d have got out with a small loss.

But now that this is on the Internet for the world to see, I think they’ve cost themselves hundreds of thousands of dollars in lost value.

Maybe it’s their fault, or maybe the media just picked up the story.

But either way, I do put some of the blame on them for making the situation known.  The previous sellers didn’t say anything, and it clearly worked in their favour.

It’s too bad – the house is gorgeous, and in a great area!

But unfortunately, this circumstance was just completely out of the owners’ control.

3) A Truly “Worthless House”

This is incredible.

A Nova Scotia man finds an Indian artifact on his property, and decides to have the taxes reassessed to show the house is worth a buck.

Here’s the article:

“From $250K To $1: Seaside Nova Scotia Home Declared Worthless Following Discovery Of Mi’kmaq Artificact”

Here’s an excerpt from the article:

Normally, a brand-new seaside home on the outskirts of Antigonish, N.S. could easily fetch as much as $400,000.

But after homeowner Mike MacDonald stumbled upon a Mi’kmaq axe on the two-acre property, he was quickly able to convince the Province of Nova Scotia that his new home was now effectively worthless.

“Such a property would be considered very valuable under normal circumstances,” reads a decision by a Nova Scotia appeal tribunal.

But with the artifacts throwing the property’s future into limbo, “the value will be set at $1 until the future use of the Mi’kmaq artifacts is determined,” it read.

The rock-bottom assessment — which MacDonald only obtained after several appeals — frees him from paying any property taxes on the beachfront land.

So in the first story, we have a couple cry-babies who are upset about a pole, and the supposed impact it’ll have on the value of their house.

In the second story, we have a couple being terrorized by an anonymous stalker, who have moved out of the house which has clearly been impacted in terms of value.

And in this story, we have an opportunist who doesn’t want to pay any taxes!

Well, I feel sorry for one of the three of them..

But you have to give credit where credit is due, and credit the ingenuity of this Nova Scotia resident who found a way to avoid paying the tax man.

Although, when it comes time to sell his house, or obtain a mortgage, or refinance, he might find out he’s shot himself in the foot.

Real estate is probably the most expensive asset any of us will ever own, so obviously we’re going to be sensitive toward its value, as that value goes up, down, or is impacted.

When circumstances impact our houses’ values, it feels a lot worse in cases where it’s out of our control.

There’s only so much you can do in advance to minimize potential fluctuations in value.

And you certainly can’t pick your neighbours…

That reminds me – there’s another odd doll-house in Toronto, this one is in Little Italy, where I shot a blog video back in 2011.  It’s not as scenic as the one at Bertmount, but this one is a bit more violent when you consider Scooby-Doo has a rope around his neck and is hanging from a tree…

Enjoy! 🙂

19 Comments

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  1. Onibahsan says:

    Does anyone have opinion on buying an investment home (Dufferin and Bloor St W.) next to a Toronto hydro sub-station house? Investment, meaning multi-tenant property for resale.

  2. BRBB says:

    I wonder how many people who are making fun of the hydro-pole folks would be upset if a hydro pole was put in front of their house. I don’t have to wonder, I know the answer: 100%. This city is chock full of people like that.

    I’m also amused by the poeple who don’t want to give any sympathy to these folks because they live in an expensive house. Why don’t you just pack your bags and move to Greece. I’ll personally buy you a one-way ticket.

    1. kari says:

      While I feel that you would be right and that we would all be upset if a hydro pole were put in front of our property, I think part of what’s being argued here is whether or not it’s reason enough to go on the news for. I know I certainly wouldn’t have.

  3. Paully says:

    I just watched the City video of the whiny, spoiled, ridiculous, first-world-problem cry-babies in Bloor West Villlage. Cry me a river. How was that considered news? Are they going to go off the grid and start living without Hydro? Puh-lease!!!

    The New Jersey people with the “Watcher” have a genuine concern. That is freaky and un-nerving.

    The hydro pole people need to get a grip!

  4. Appraiser says:

    In appraisal parlance the hydro pole is an externality, something that is not directly within the legal boundaries of the subject property, but affects value. Externalities can be positive or negative, such as proximity to a subway line vs. a landfill.

    Externalities that are negative in nature contribute to external obsolescence and are usually incurable (cannot be significantly altered or eliminated). If the subject property were the only house on the street with a hydro pole in front of it, then it could be argued that the level of external obsolescence is significant. Since that is not the case, it is likely of little consequence in relation to resale value, for the vast majority of buyers.

    1. joel says:

      In your opinion would this house appraise for less with the pole in front, or would it still fall in the same range that you would appraise it at if there was no pole?

      1. Appraiser says:

        @ joel:

        In theory, a thorough and potentially time-consuming paired-sales analysis would be undertaken to ascertain the value of not having such a structure near the subject property, whereby properties that are similar in utility, save for the externality, are compared and the difference in sale price (if any) is determined.

        From experience, I would put a hydro pole in the same category as having a fire hydrant, cable box or electrical transformer in front of the house and not alter the value downward in the appraisal report, as it would be difficult to substantiate.

        However, I would not dismiss the presence of a minor obstruction in order to justify a lower offering price, strictly as a negotiating tool for the buyer’s agent. In a hot sellers market it probably won’t work, but could be worth a try. Once again, theory vs. practice.

  5. condodweller says:

    I may have said this before but it’s all about perspective. I read somewhere that 20% of the population on Earth still doesn’t have access to hydro. I bet they would love to have a hydro pole on their lawn, if they have a lawn.

    What I find interesting is people buy all kinds of houses with what I would consider negative aspects that would reduce their value. Just a few examples are the condos directly facing the Gardiner, the subdivisions located on that sliver of land between hwy7 and the 407, the bowling alley style condos with a small window on one end where the building is attached to another building. I am amazed not because they sell but because how little discount they sell at.

    Chalk this article up to another reason for not owning a home. If you rented you could easily move on anytime something unexpected happened that impacts your living conditions.

  6. Jackie says:

    There is something terrifying about a sea of doll faces. My grandmother had a room of dolls that looked like the outside of that house. My sister as a 6 year old wouldn’t set foot in it, my brother as a 30-something adult slept on the couch instead of the doll room.

  7. Bita Barkhordarian says:

    Wow, such an unfair plan from Hydro. I’m sure there will be legal ways asking to move the pole.
    http://www.bitarealtor.ca

    1. Ch.T says:

      What a great and valuable comment. And thankfully you remembered to sneak in a link to your website. Classy move woman!

  8. Kyle says:

    I believe you can pay something like $5K to have the pole moved. Not a great way to spend $5K, but hardly a big house value destroyer.

    I seriously hope they catch and crucify that cowardly sicko in NJ, but even if they don’t the property will still sell again for the right price. Hell, for the right price i’d buy it and knock down the house. Maybe leave it as an empty lot for a while or maybe build condos. Hmmm, that actually might be a great way of getting the sicko to do something stupid and reveal who he is. If they put a big chain link fence around the house and a large demolition notice, i wonder if that would drive him crazy enough to make him slip up.

  9. daniel says:

    just wait till they start putting up the new mega mailboxes, people are going to go absolutely mental. i’m actually a little worried we may get one on our lawn. While i’ll certainly fight it, i certainly won’t describe it as any type of humanitarian disaster.

    1. GinaTO says:

      I was thinking the exact same thing. And while I don’t think I will get one on my property, even putting them at the edge of the neighbourhood park will impact it for the worst.

      1. Free Country says:

        Yes Daniel, you are correct. The new mega mailboxes will drive people ballistic and there may even be sabotage or civil disobedience. They are ugly, and yet in some neighbourhoods in Toronto there will be no place to put them except smack in front of many homeowner’s little front yard and 16 foot wide view of the sidewalk. On top of the eyesore, people will be stopping in front of your home at all hours of the night and day, facing your home and looking into your front window (even inadvertently) while they open their mailbox, sort out the 90% which is junk mail and then leave a pile of garbage on the sidewalk in front of your house. It will be a political battle unlike anything since the Allen road expressway was successfully opposed by ordinary citizens.

  10. Chroscklh says:

    Back home my country, politic affect house value very much. Every few year – coup, president execute, like clockwork. Cue eye roll and 60% drop in house price for half year. Is so frustrate and predictable. Easy to profit though!

  11. grasshopper says:

    The National Post article was mocking the CityNews piece. The online version had gifs featuring the different melancholy views that the homeowners gave out the window looking at the pole. What I’m surprised they didn’t mention is that their ‘view’ across the street is the side of another house and two other hydro poles!

  12. Marina says:

    If the NJ family can prove the sellers had prior knowledge, they should win. Same as not disclosing any huge problem with the house.

    As for the hydro pole, couldn’t they have put it a little to the side? I think generally poles tend to be between properties. I know I wouldn’t buy that house now.

  13. jeff316 says:

    The other thing out of your control, although likely covered by the doll house, is hoarders, people who let their houses just fall apart, or illegal rooming houses.

    I used to know someone who lived in very close proximity to the doll house, and given how much that person talked about the doll house it was clear the impact it had on their life. I was young at the time, and didn’t understand the fuss, but now that I’m a home owner (and one that lived beside a hoarder for five years, albeit a friendly one), I totally get it.

    The hydro pole probably doesn’t affect that property’s value, but only because the market it so hot. I could, however, see that affecting its value in a buyers market and potentially not insiginificantly.

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