When seeking out a place to live, location can be a funny thing. There's supply and demand, and then there's perceived supply and demand. We're all familiar with the former: pricing typically spikes in areas believed to be popular. Meanwhile, the opposite rings true in less desirable locations.
But there are exceptions, and they're the key to navigating the real estate game. This is where perceived supply and demand comes into play: even though a particular area may seem hot or cold, the reality can be downright unexpected.
A couple of personal examples. (These involve rental rates, although the same rules apply to buyers.) I have a spacious two-bedroom apartment in Los Angeles. Hollywood, to be specific. I'm at the foot of the beautiful Hollywood Hills. My balcony looks onto a palm tree-lined side street. My kitchen overlooks a newly renovated parkette. The building is safe, sturdy and aesthetically pleasing. There's even a G-darn swimming pool. And to cap it all off, I'm exactly one block away from the Hollywood Walk of Fame and the legendary Chinese Theatre.
Were this exact apartment -- and its accompanying amenities -- in a comparable area of New York City or San Francisco, my rent would be in the neighborhood of $5,000 to $6,000 a month. And yet somehow, some way, it currently sits at a mere $1,695.
Clearly this shouldn't be. I have a fantastic place in one of the most famous three-block areas on the planet. In a city well known for its high price tags. And yet here I am paying far, far less than anyone could expect. Although there's a perceived demand for this real estate, the reality is a whole 'nother story.
If you're looking to live in Vancouver, New York, Los Angeles or other so-called "cost prohibitive locations," there may be more options than you realize.
Example two. Last month I spent a couple of weeks in Quincy, Massachusetts. It's a suburb about 25 minutes outside of Boston. Certainly charming enough: a small downtown area with a handful of bars and restaurants. A couple of Starbucks, a few supermarkets, etc... Not far off from countless other areas of New England. But here's the rub: a run-down studio apartment will cost you more than my two-bedroom place in Hollywood. Whaaaa?
Given the picture I've painted, basic logic would suggest you could nab a decent Quincy pad on the cheap. But once again, this is the illusion of perception at work. For reasons I won't even try and unpack, the demand for real estate in Quincy, Massachusetts exceeds the demand for real estate in Hollywood, California.
If there's a small lesson to be culled from all this, it's that the housing and rental markets aren't quite as clear cut as we'd like to believe. Which means if you're looking to live in Vancouver, New York, Los Angeles or other so-called "cost-prohibitive locations," there may be more options than you realize.
Like a burrito in a microwave, there's always the chance of finding some cold pockets next to the piping hot ones. Which is encouraging news to all you renters and buyers out there; a few minutes of research may just quash a whole bunch of faulty perceptions. Perhaps that dream home isn't so far out of reach after all.
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