I actually don’t worry too much about the price of our principal residence. I’m certain that we made a good decision to buy a small house in an ok neighbourhood that was more than affordable for us. The longer we can stick it out the better (though my husband wants a garage and I want a pool – neither of which could fit on our property). Believe it or not, we do catch some flack for living in a ‘starter home in the hood’ but I rather like our $100k mortgage and the house has a lot of character. We have another advantage in that our “Jones’s” aren’t hard to keep up with.

Your point about what the cost to build was compared to current price is an interesting thought. I’m not sure on how to find that info though as the house was built in the 20′s.

Unfortunately, there are places in Canada where home values have not increased. We’d be lucky to get what we paid for for our rental property 4 years ago. Our realtor has informed us that our primary residence would likely sell for less than what we paid 3 years ago (after putting in a new furnace / AC). It wasn’t that long ago that people here were shocked at what their house was worth (in a good way), kind of like I keep hearing from friends in other cities (i.e. Toronto & suburbs).

I just think it’s a scary time to put too much emphasis on appreciation. For a rental property, I would be most concerned about cash flow and value. Appreciation would be icing.