Sure, it’s a nice place. Most folks would be happy living in the coach house.

But is it $4.5 million nice?

The latest listing on my Old Town street (one block from the flip now on sale at $3.9 million) is part of a larger local story.

Niagara-on-the-Lake has always been a gentrified place, but now it’s in danger of going palatial.

And what happens then if rates rise, recession comes, credit dries or crazy U.S. election willies spread across the river? Will we run out of rich folk? The higher prices go, after all, the more they may correct.

Here’s an update on what I reported last month. Listings have swollen. Like a dead hippo. There are now 476 actives in all of NOTL.

Of those, 294 are houses. And of those, 224 (or 76 per cent) are listed for more than $1 million. Of those, 34 per cent (or 76) are on the market at $2 million and above.

Meanwhile the median household income is stuck around $98,000. To buy a “typical” nice house for $1.5 million would require $300,000 down (to avoid paying the CMHC levy) and a monthly of just under $11,000 (mortgage and taxes only).

If you factor lost investment of the downpayment (at 6 per cent), the true cost of owning is about $12,500. Yes, a month. Plus Cogeco, dog food, insurance, groceries, the car, retirement savings and, oh yeah, the kids.

An income of $98,000 doesn’t cut it. You need just shy of four hundred. Even then, you shop at Costco.

Price and mortgage costs are why real estate’s in trouble right now. Sales have been declining as listings rise. Days-on-market is growing. The sales-to-new-listings ratio is tanking. Prices are starting to wilt. No crash, but not what realtors expected after the Bank of Canada started to loosen rates.

Some people think things are getting out of control. A symbol of that could be the greenlighting of NOTL’s first five-star hotel. 

It’s a massive real estate play on the former public school site with 129 rooms, restaurants, conference centre, buried parking and a hulking four-storey presence. At least a hundred people will work there. 

Will it raise land values? Or devalue surrounding homes? Is yet another high-end hotel needed here? Or does this, along with current real estate prices, herald the forever-end of the small-town residential vibe?

David Jones is a hotel guy. His Q124 has expanded wildly along Queen Street in recent years, trying to make the most of the heritage theme people flock here to experience.

He and his partners have spent and borrowed millions, now owning a clutch of storefronts, about 80 guest suites, a lounge, bar, restaurant and even a high-tech garden sitting atop underground parking.

The thing is a success. But Jones is not happy.

The Parliament Oak hotel is too much, he says. “I feel bad for the neighbours. This is not the feel or look that should be brought to Niagara-on-the-Lake,” he told me.

“When we built, we had to match the average height of buildings in town. If we’d gone to 60-feet (like Parliament Oak) it would look stupid. It would look awful. And yet they approved that in a residential area. It’s also insulting that council would think we need more high-quality hotels. We’re not full. If we were full every night all summer, I’d say, sure, build. But we’re not.”

Local politicians, he adds, “are selling this town short.”

By the way, his hotel hosted wedding vows recently in the fancy high-tech roof garden. A neighbour purposefully ruined it, Jones says. “He cranked his stereo way up. I guess some people are never happy.”

A lot of them, actually.