Will snowbirds chase the bears away?

I’ve got to admit that the recent sluggish housing market in Vancouver has started to get me a bit worried.. Its not really that bad yet, but we’ve definately lost the excitement of last year, where buyers would overbid asking prices by $150k with no subjects and leaky condos on the ground floor facing major streets would sell at the first open house.

With the winter blahs this market has been experiencing since the end of last summer, even yours truly (a faithful real estate cheerleader) has started to wonder: is there something to the bears argument? Do ‘fundamentals’ matter? Is ‘affordability’ really that big of a deal? I mean, here we are with a robust economy, super low interest rates and an almost world-class city and yet condo’s just aren’t selling like they used to.

And then it occurred to me: We’ve got a bunch of baby-boomers just a few years off from retirement, and who likes condo’s better than retirees? We just need a whole bunch of them to move here to boost our prices again. I think if we can reach out to old folks from across Canada and the world and convince them that Vancouver is the right spot to retire we can keep those prices chugging uphill.

Economically it just makes sense: An undesirable four bedroom home in a quiet neighborhood in most parts of Canada could be traded nearly straight across for a convenient 420 square foot condo in a vibrant and active downtown east-side Vancouver neighborhood with easy access to ‘medication’ and ‘massage’ services.

All we’ve got to do is convince them that Florida and Arizona are totally lame, and this is where they want to spend their time:
vancouver snow
Just think of the therapeutic effect of all that cold damp air on tired joints! Spread the word: Vancouver is a retirement wonderland!

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d_oush
d_oush
13 years ago

Patriotz said: "No net change in supply, demand, or ownership."Unless they retain ownership on the house and rent it out.. That would reduce the amount of supply available for sale and keep pressure on prices rising.

patriotz
patriotz
13 years ago

Don't you think that downsizing would have a positive effect on the condo market here thoughNo. Because the people buying the condos are also selling their houses. And who is going to buy the houses? People selling their condos.No net change in supply, demand, or ownership.

d_oush
d_oush
13 years ago

Don't you think that downsizing would have a positive effect on the condo market here though? I think most retirees want to remain close to major infrastructure and not move out into the woods just to save a bit of money.Even if some do move away, there will be many many people that will be interested in downsizing but staying in Vancouver. Any one who has enough money in a house here could sell it and buy a condo outright with some money left over for living expenses.

4wheeler
4wheeler
13 years ago

Anecdotaly all the boomers I know (parents, friends parents, etc) have most all of their wealth in their homes.. In fact I know that I’m as prepared as some of them for retirement an I’m in my early 30s. If I wasn’t working here there’s no reason I would stay in Vancouver. If my goal was to save money I’d probably consider moving to the island or a smaller town.

patriotz
patriotz
13 years ago

Spot on about boomers and wealth – it’s all in their houses. And if they downsize on retiring the net effect on RE is… you figure it out.

And no they won’t be moving to Arizona, etc. Little hangups like immigration and medicare. Nor will they, if they choose to sell the executive house in Winnipeg, be moving to a Yaletown closet. Try Courtenay or Vernon. So yes there may be some local upside to RE in these places – but I think it’s more than priced in already.

Oh and another thing that should go without saying – since Vancouver has the highest RE prices in Canada, it should see the biggest outflow of boomer retirees.

wannaget2calgary
wannaget2calgary
13 years ago

solipsist described the best-seller "The Mountain Effect – why people lose their senses in the proximity of mountains."Poignant, and funny. Thanks for the giggle.

Anonymous
Anonymous
13 years ago

Retiree,new genration,or new comer all people have desire to live in best place who ever got money will buy best place…….regardless 450sqf.or 630sqf.Those only two choices? I take 630 as have 2 child and some chicken.Real estate, me love it long time.

solipsist
solipsist
13 years ago

You think they could have shoveled the sidewalk.But no one lives there. Those three properties probably "belong" to the same flipper.BTW – great shot pope. Very cool lighting.Anybody got any data to back up the notion of "rich boomers"? I think that is in But They're Not Making Land Any More, and The Olympics and the Weather – a study of why all rich foreigners are moving to Vancouver. Maybe it was in the study – The Mountain Effect – why people lose their senses in the proximity of mountains.It's gotta be out there somewhere.

wannaget2calgary
wannaget2calgary
13 years ago

I don't think we're going to see much action in the Vancouver real estate market until 2010. Expect things to be really slow until all the boomers in the world come here for the Winter Olympics. They will surely get excited when they experience our rainy days or the grey, overcast skies typical of Vancouver in February. They will probably get into bidding wars over umbrellas, and maybe even condos … providing that the price of a condo includes "free umbrellas for life".And what's this about "a lot of money passed down to the younger generation"? Dream on, my kids aren't getting a nickel, because I plan to live until I'm 80. By then I won't have a nickel left, because I'll have spent it all. I will be so poor, as they say, that I won't "have a pot… Read more »

Anonymous
Anonymous
13 years ago

BACK OFFwhats happening now a day people are involved doing day to day arguments about real estate future.Real estate's takes time to grow up still from last 2 year its 200% up and that progress is awesome.Now we all have to wait for a year if not atleast till jan,2007.that will bring another kick start for next round.Retiree,new genration,or new comer all people have desire to live in best place who ever got money will buy best place…….regardless 450sqf.or 630sqf.

digi
digi
13 years ago

I just found this article in yesterdays financial post about this topic:"While it's admirable that bankers want to remove the stress from the life-planning process, perhaps they, too, are stressed by the findings of a Bank of Montreal study showing that 70% of Boomers don't think they have saved enough for retirement.I, too, would be stressed if my biggest client base was contemplating selling their cars, downsizing their home and off-loading a second property in order to pay the bills.That does not bode well for mortgage and loan profits."So if anything it looks like without a whole lot of strong demand, a large group of boomers looking to downsize at the same time could put serious downward pressure on prices and end up letting people cash out for a lot less than they had counted on.

digi
digi
13 years ago

there will be a lot of money passed down to the younger generation.A lot of money, or a lot of property? I'm not sure where I read it, but I seem to recall seeing somewhere that the majority of boomer wealth is in their homes. This can be good if its all paid off at retirement, but other than the reduced cost of living its not money you can really get at easily. Do you rent out part of the house to a boarder? sell and buy something cheaper? rent?Either way I dont think it would push up the price of our already overpriced real estate. All the potential upsides are already priced in, but none of the risk is. This is not a good thing in an imperfect world.

d_oush
d_oush
13 years ago

I think boomers will tend to work for longer than previous generations, and there will be a lot of money passed down to the younger generation. I don't see how this wouldn't have a positive effect on realestate markets all over.

stucco-slushy
stucco-slushy
13 years ago

I would think that a very large retiree population would not be all that great for Vancouver considering the costs to the medical system.

Anonymous
Anonymous
13 years ago

Is that 3 for sale signs I see in that snowy picture?You think they could have shoveled the sidewalk.