I’m a baby boomer! For most of us, our home is the most valuable asset, an important part of financing retirement plans. In the last year alone, I have helped many of my clients and friends navigate through this life changing process. The situation is that the sheer numbers of us downsizing and selling Real Estate assets could cause a baby boomer housing bubble.
The Real Estate headlines in our newspapers and media these days is all about the threat of house price corrections due to possible interest rates hikes, spikes in House Prices and the effects of foreign buyers on our homes value. Not much attention has been given to the trend that Baby Boomers are on the move.
Our generation were born between the late 1940’s and mid 1960’s and have similar likes, dislikes and attributes. We made a huge demographic bubble for almost everything all our lives… We filled up rooms everywhere. The reality is looming that some have already retired and one day in the next 10-15 years we will all be commencing into retirement. How will this affect house prices in our Mississauga Real Estate market?
We used to have big families – The demographics are changing. Boomers are now aged between 51 and 70 years old and our economy is in transition. The trend is towards fewer working age people in Canada. When I was growing up in Guelph Ontario, our family has 6 kids. Yes – it was a busy family with a stay at home Mom. In fact most kids in our neighbourhood had many siblings. The norm these days is perhaps two kids and one or two parent households.
Don Pittis, CBC News – Canada’s housing market faces a looming demographic bubble
First time Buyers can’t buy in the Neighbourhoods they grew up in – While I do not have a Crystal ball to predict the future Real Estate Market – I can tell you as a Real Estate broker, a few of my own experiences this year:
- First time buyers are now competing with their parents for housing. What used to be starter homes for young families are now fetching high prices as boomers are downsizing – unbelievable but true – The boomers are starting to sell off their bigger family homes and looking for smaller homes, detached, semi-detached ,Town-Homesor Condo Apartments in convenient Neighbourhoods close to all the amenities – over the last year alone average prices are up over 17% across the GTA which is making housing unaffordable for first time buyers in the neighbourhoods they grew up in. Mississauga House Trends Report – September 2016
- I’ve helped several baby boomer clients this year downsizing. Everyone is different of course – but – the commonality is that they have been selling their principle residence to get equity out to buy a lower cost home and invest the profit for retirement. Boomers are moving out – moving up – moving to right size;
- Moving up! In one case; my clients still in their early 50’s decided to downsize and move up to the 15th floor of an older Condo Apartment building in Etobicoke. They purchased a large three bedroom renovated apartment with a great view of Centennial Park. – Ahead of the game – they liked the amenities of the Neighbourhood and being close the Kipling subway for easy access into downtown Toronto. Not an easy search as we encountered multiple offers on every attempt to buy.
- Moving Out! In another case; my clients had reached retirement age. They decided to downsize, move out of the GTA and sell their family home. Their home search took them to Stratford, where they purchased a large town home backing onto the Grand River. – Ahead of the game and happy with a different lifestyle out of Mississauga.
- Moving to right size! In a third case, my clients were four sisters, Boomer aged and tasked with moving to right size their Mom and selling the family home. It took some work to prepare for sale as the gardens had overgrown and needed staging. Years of family treasures had to be distributed. I’m happy to report Mom is doing well!
Downsizers benefit in a hot housing market – in a hot housing market like the one we are experiencing in Mississauga and the entire Greater Toronto Area this year, downsizers’ benefit. The profits from selling their principle residence fund retirement. While a baby Boomer Housing Bubble is not likely to happen overnight – the question is as more baby boomers reach the retirement age and more homes are for sale on the market, what will happen to the price of homes? What type of homes will be in demand?
I’ve successfully help many clients relocate and navigate the challenges, emotions and financial decisions that go with the life changing process of downsizing to smaller homes. It’s important to plan for the future. I invite you to contact me or email me at firstname.lastname@example.org to discuss your Real Estate needs. I’m standing by to be of assistance!
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