Salmon Arm a real estate alternative....."Who, in the real world, can afford to live here now?"

By the standards of our gravity-defying real-estate market, it didn't sound all that irrationally exuberant: a well-appointed Kits Point pad, with about 1,300 feet of space and a view of the ocean.

Price: a cool $1.25 million.

I was thinking perhaps I'd found a nice little top-floor unit, maybe even a penthouse, in one of those rain-stained, dilapidated houses bought by an old Kitsilano hippie who fixed it up and is now cashing in. After all, at $1,000-a-square-foot or so, that would be enough to join the swanksters in one of Coal Harbour's cool new towers. Ought to be quite a place, I thought, heading out to check it out.

Well, it was no penthouse, dear reader. It was a basement suite in a house. And the view? Well, that was what realtors like to call a peek-a-boo, though I'm not sure you could even call it that. To get your $1.25-million ocean view, you would have to gaze through a ground-level basement window, peek under a thick grove of rhododendron bushes, then across the street -- hopefully nobody parks by the sidewalk here -- look past Kitsilano Park and then, oooh-la-la! A tantalizing glimpse of English Bay, about two football fields away.

I don't raise this particular listing as a comment on the value of real estate in this town. When a condo atop the Hotel Georgia goes for $18 million, I guess even a million-dollar basement suite in Kits Point is easily within the realm of possibility.

But, yikes. Wasn't it only a few years ago you could actually get a penthouse, or something at least above the garden, for a million? Now it's the entry level for a Kits Point basement.

Stories of ever-increasing real estate prices have dominated dinner parties in this city for years, of course. It always makes for delicious cocktail banter, though you enjoy it a lot more if you're in the market, not out of it.

But people are starting to wonder if it's gone a little crazy.

With the housing market melting so spectacularly to the south of us, you can detect a frisson of unease these days when the subject of real estate comes up: Are we, too, sitting atop a massive real-estate bubble ready to burst or are we truly living in a unique market that might soar faster, higher and stronger as the 2010 Olympics approach? And if it does burst, or at least deflate, how many of our neighbours are going to find the friendly banker suddenly isn't so keen on extending those home-equity loans used to put in a hot-tub or perhaps play the market?

Only the real estate gods know for sure.

What's really notable -- and worrying -- about this Kitsilano basement, though, isn't just the price tag. It's emblematic of a larger social squeeze now changing the social fabric of this city.

Who, in the real world, can afford to live here anymore? New immigrants? The working class? The middle class? Students? Your own kids?

Affordability -- or more accurately the lack of it -- is becoming a national lament. In its latest quarterly survey, the Royal Bank of Canada reports that in every province and city it tracks, the cost of owning a house is eating up more and more of family incomes.

But it is here in Metro Vancouver where the numbers have become scariest: In the second quarter of 2007, the average owner of a two-storey home spends 73 per cent of the family's pre-tax income on financing and maintaining that home. In Toronto, it is 52 per cent of family income.

What it means is this city's real estate boom is squeezing out not just the middle class but also those starting out, the lifeblood of any city. If you're young, you can pretty well forget about buying in unless you have parents who will take out a reverse mortgage and pony up a whopping down payment.

Alternatively, you go so deep into debt you will be eating soba noodles and shopping at thrift shops into your middle age.

Of course, the banks are willing to help. As the RBC notes in its survey, a Vancouverite's average mortgage payment of $3,230 a month on a two-storey house could be reduced by $400. The catch? You need to sign up for one of the new, 40-year term mortgages, instead of the 25-year term your parents got.

So, take out a mortgage at 25 and at 65, you can retire a homeowner. What a deal.

(prepared by Miro Cernetig/Vancouver Sun)