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Originally Posted by monkey brewery
Are seniors downsizing going to put even more pressure on younger, first time home buyers? I've been thinking about this recently.
Up until about last year we've talked about eventually downsizing (we're 60's), and central to these plans are moving into a condo or something a little easier to manage as we get older, and/or a place we'd feel comfortable leaving locked up while we head south. It's not a financial retirement issue per se.
in 2020-21 we were looking at condos for 250-350k on the low end and 500-600k for something a bigger. Today we're looking at 400k at the bottom. It's of course all relative to where you want to live and how you want to live, so your mileage will vary.
Today we're looking at what I would categorize as a first time buyer's condo. Another idea is an active senior living facility down the line (I for one would rather just go ahead and die at this point in my life, my wife thinks they'd be great for us).
This all has me thinking where do first time buyers go? As seniors start to sell-off, downsize, die-off and what have you, I think there's this expectation that the market will suddenly be flooded with all these prime houses in established areas. But what I don't hear a lot of commentary about is how those selling are going to put a lot of pressure on younger buyers, in all quadrants.
Our property tax assessment came in at an astonishing number, and houses in our neighborhood sell well above that even after interest rates cooled the market. It's frankly insane, and there's a reason there are hardly any kids in this neighborhood as it it. Who's going to be buying these houses? The next generation of seniors?
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No, I don't think so. At least not a significant level. But I could be completely wrong. The biggest issue in Calgary/Edmonton over the last few years were young families cashing out their homes in Vancouver/Toronto and coming here + willing to put up $50-100K+ in premium to avoid coming over to a weird and awkward scenario.
Then I presume condos spiked due to rent affordability and some people buying condos by cashing out investments to avoid rental supply issues and fighting the masses in grabbing whatever lower rents were available. This pool of demand was basically both locals and people new to the city.
Retirees suddenly flooding the market with non-reno'd homes should not be another huge shock. Movement trends, sure. But not shock. I think much of the supply will be horizontal with some families fighting to get into certain communities to address certain children school scenarios (that's its own separate issue) or people upsizing from condos to address growing family sizes etc. With the initial stream of families coming over from Vancouver/Toronto/immigration slowing down a lot and implementation of recent property flipping tax rules in 2023, I also think this will keep property flippers from excessively adding to the frenzy.
I'm seeing quite a few million dollar reno'd homes stuck on the market recently. I think we might start circling back down to the types of pricing demands and homes that people wanted about 5-10 years ago soon. But honestly, who knows. We thought that would happen because interest rates and it blew up instead (TBH, likely lots of those Vancouver/Toronto people cashing out to come here because those interest rate burdens of several percentage points up in the first place). Maybe it will indeed cool down? I know some people that weren't happy with the pricing in the city already migrated outwards to the bedroom communities if they were lucky enough to get WFH heavy schedules and I don't really anticipate many of them suddenly deciding they need to rush back to Calgary city limits in large numbers.
What I'm also curious though is whether we will start seeing more multi-generational households in Calgary. I heard of very few in the last few decades and many were typically for reasons of doing it temporarily getting out of a rough financial situation. With zoning bylaw changes also changing rapidly, I could also potentially see support this shift of gentrifying single tenant properties with large square footage to multi tenant (rental/multi generational) occupation. The "mother in law suite" might actually start be predominantly lived in by mother in laws vs renters going forward.
But again, who knows?