…not according some new homeowners.
The crux of the story revolves around Canada Post’s original decision to assign a Woodbridge postal code (L4H) instead of a Kleinburg postal code (L0J). The developments in question were Kleinburg Hills, Kleinburg Crown Estates and Impressions in the Village of Kleinburg.
There were several reasons noted for the “fuming” concerns expressed and included impact on insurance rates and frustration of having to explain the disconnect to friends, family and businesses.
Chief among the concerns however, was the perceived impact of the designation on future home values. The implication was that homeowners would be disadvantaged if the homes were designated a Woodbridge address instead of a Kleinburg one.
As it turned out, Canada Post did eventually grant the developments and homeowners a Kleinburg address. by way of municipal designation.
Premium address or lipstick on a pig
What I find interesting in this story is the underlying question of value and the impact an address can have on real estate.
Some of the new homebuyers above are clearly of the opinion that in fact, an address can make a significant difference. To be fair to the homeowners, a Kleinburg address was among the things that likely drew many to these developments. Accordingly, I can understand the validity of their concerns.
But was it the address? Or was it the physical location? Or, was it both?
Imagine the case where you have two houses on opposite sides of dividing community street. Exact same square footage, same layout, finishes, lot size and zoning, orientation, you name it.
All other things being equal, would you be prepared to offer more for one house versus another?
There are clear examples of this neighbourhood phenomenon in Toronto with communities such as Rosedale, Forest Hill, The Bridle Path and Yorkville to namedrop a few. From a theoretical appraisal viewpoint, the above average real estate values that characterize these neighbourhoods are predominantly driven by land values and all that is inherent in the location. The difference between being situated on the east side of Bayview, south of York Mills, and the west side is a historical testament to that (though average home prices on the west side are nothing to sneeze at).
The Kleinburg brand is certainly at play in the example highlighted here. The developers have leveraged the brand and capitalized on market perception. If the view of those individuals cited in news article above is any indication, buyers certainly bought in. Whether or not that market perception is warranted is a topic for another blog post.
I’m happy to see that the homeowners received what they were promised insofar as an address is concerned. I hope the balance of builder promises follow suit.
What remains to be seen is how the final developments evolve and how they are embraced.
Only time and market forces will dictate overall re-sale value.