Thursday, August 8, 2013

Fun with Math

Craven Road (formerly Erie Terrace) has been in the news a few times over the years.

The earliest mention I could find, thanks to the Toronto Star's addictive "Pages from the Past" archive, was in a real estate ad from 1906, offering land for as little as $2 per foot of street frontage:

(Toronto Star, May 5, 1906, p27)





"ERIE TERRACE, Adjoining Reid Ave., $2.00 to $5.00 per foot. $5.00 cash, $5.00 per month." (Interesting to note that prices are half of those for plots on Reid Avenue (now Rhodes Avenue), only one block to the east.)

A century and a bit later, on 22 February 2013, the same paper profiled a "House of the Week" at the bottom of the street, a brand-new, three-bedroom magazine-bait beauty selling for $889,000. 

How do the prices compare?
Well, the 1906 ad is selling land only, and this one the next year is too:

$10 A FOOT – Erie Terrace, 100 feet north of Gerrard street cars, no money down, lumber supplied to build. Davis, 75 Adelaide east.
 (Toronto Star, December 21, 1907, p15)
Three years later, the street's first house rental listing appears:
$7 – THREE new, detached, three-roomed houses, with hall, water, gas, Erie Terrace. Apply 684 Gerrard.
 (Toronto Star, December 17, 1910, p17)
Finally, in 1911, we get the first house listed for sale, at the princely sum of eight hundred dollars:
$800 – COSY three-roomed cottage, in Erie terrace, just north of Gerrard street. $50 down, balance like rent. Interest only 6 per cent. North 71 Adelaide.
 (Toronto Star,
June 8, 1911, p4)

Unfortunately, the Bank of Canada's inflation calculator doesn't start for three years after that, but "a basket of goods and services" costing $800 in 1914 would cost... $16,400 in 2013. Of course, it's more complicated than that, as the American website Measuring Worth carefully explains to all us non-economists:
"A simple Purchasing Power Calculator would say the relative value is $19,900. This answer is obtained by multiplying $800 by the percentage increase in the Consumer Price Index from 1911 to 2012. This may not be the best answer. ... In 2012, the relative value of $800 from 1911 ranges from $14,800 to $365,000...."
Which last figure is closer to the $399,000 list price of a slightly less tony Craven crib chosen as the Star's "House of the Week" on September 21, 2012.

And if you'd bought just the land for either these houses back in 1906? Twenty feet of frontage at $2 a foot equals $40, or in 2013 dollars... something in the range of $801 to $20,200.

Sigh.

[Next Post: The Media Discover Tiny Town]