Blast from the Past – Thoughts on a Home Ad from 1958!
Nanaimo Daily News
Nanaimo, British Columbia, Canada
16 Jul 1958
With all that is going on in the world, it is refreshing to realize that some things are less expensive today than they were many years ago
A good Buddy sent me a news article the other day as he sends me little blasts from the past when ever he sees them. This one was a Nanaimo Real Estate ad from July 16, 1958….a mere 62 years ago!!!
I don’t know about you, but the prices today on most everything just blow my mind and I often find it reassuring to see things that are better rather than worse. I am a car guy so I spend many enjoyable hours looking at vintage and muscle cars and always get a smile when they show the original invoice for a car that you would give your eye teeth for and it shows $4,295 in 1969. In 1972, I bought a 71 Oldsmobile Cutlass convertible that has always been my favorite car, and although I don’t really remember how much I paid it as I was only 19, it was probably in that $3,800 to $4,200 range. That beautiful piece of art and I had a world wind romance till I sold it around 1976 or so. My memory is a little foggy as that was 44 years ago, but I think I sold it for $2,650.00. I tried to buy one exactly like it again maybe 25 or so years ago that was in the parking lot of a hotel I was staying at, although the owner never did call me regarding the message that I left on his windshield. Obviously, he was still in love with it. I would have paid $16,000 or so for it but that was not to be. A mere 600% increase from what I sold mine for. Today, that car would have gone up another 220% or 250% to $35,000 or more. My first “Big” screen TV was a massive 37 inch that was $5,500 more years ago than I can remember. Now you can buy far superior 65-inch TV’s for under $1,000. Real Estate has gone up the most, but decade after decade has proven to be the best investment most people could ever have made, providing a roof over your family’s heads while years later also providing a stellar investment return.
This brings me back to the ad at the top from July 16, 1958. This home as described in the ad, was fully plastered, had oak floors throughout, perimeter heating (ya I am not sure what that means either), had a full basement, all for the exorbitantly low price of $13,500. The price itself will make you smile as did the phone number, which was 2644, but what really caught my attention was the financing at a 6% interest rate. Now we are talking 62 years ago!!! Today, you will see mortgage rates advertised starting from 1.79% for a 5-year variable rate to 1.99% for a 5-year fixed rate. I have clients that are getting better rates than this on new multi-family buildings. The first house I bought back in 1980 had the attractive rate of 11.5%, the 2nd house I bought that year was at 12.5% and the last house that year was at 13% then within a very short time rates were up to between 18% & 21% and some higher than that. Those of us that had 11.5% rates were breathing a sigh of relief and feeling like we had dodged the bullet.
Here are some facts. The average interest rate over the last 200 years is 5.18%. The rate remained unchanged at 4.5% from September 1928 to October 1931. Just let that sink in!!!
The advantage that today’s low rates give buyers is the ability to hopefully pay it off. As you all may know, I error on the cautious side, so my advice is, above all, pay down and pay off your mortgage as soon as physically possible and if you want then to buy another investment, then borrow against the paid off property. Never leave yourself stuck behind a rock and a hard place because you couldn’t resist spending all your savings on every shiny thing that came along. There will be lots of time for that when you want to relax in your latter years and believe me, that comes way faster than you think it will when your young. Something to consider is, the house in that ad is probably worth at least $500,000 today which would equate to a 3,700 % increase or 60 % yearly increase in value over that 62 years. I think that is a pretty awesome pension plan.
We are always here to help you strategize so you make the best decisions that will put you in the best position as you move forward with your life. There will be other pressures on our lives and economies as with this current Pandemic and once you plan for these bumps in the road, it will do a lot to remove unnecessary stress from your life. Live, Love, Save and Enjoy your life.
Hope you all have an AWESOME weekend!!!
Brian & Myles McCullough, RE/MAX of Nanaimo
#1-5140 Metral Drive
Nanaimo, BC V9T 2K8
Office: (250) -751 – 1223