Real Talk!

The Canadian Real Estate Association says that the rebound in home sales and prices this spring is much better than expected. It seems the recession has not stalled the demand or reduced prices for property.

Sure, sales to “baby-boomers” have decreased… but Generation X-ers (those born between 1965 and 1980) is on the climb!

Executive Vice-President and regional director for Ontario-Atlantic Canada, Michael Polzler, calls Gen X-ers the next wave of recreational owners in Canada. In a recent interview, Polzler said, “After being priced out of most markets for the better half of the last decade, Gen X purchasers now have the financial wherewithal to buy recreational product at virtually every price point. Gen X is ideally positioned to pick up any slack in recreational-property markets caused by softer demand from baby boomers and retirees. They are driving the market right now, and that's not something we've seen in the past”.

The 2009 RE/MAX Recreational Property Report highlighting sales, pricing, trends and developments in 50 Canadian markets noted a generational shift in 74 per cent of markets surveyed. Gen-Xers are snapping up affordably priced properties in high-demand areas such as Bancroft, Honey Harbour, Orillia and the West Kawarthas.

There's no question that it's a buyers market right now,” Mr. Polzler said “Sellers have to be more realistic in pricing their properties than in previous years. But in no way are we seeing fire sales. Prices were down in January, as they traditionally are. But right now, we are seeing improvement in most places.”

The report found demand from Generation X has nearly doubled over one year ago. Seventy-four per cent of markets surveyed this year reported a marked trend toward thirty-something buyers.

While the combination of inclement weather and a global recession clearly dampened sales activity at the start of the year, now many areas are experiencing a definite upswing as traditional “cottage season” gets underway.

"Much of the activity in the marketplace today has to do with the mindset of this particular generation," according to Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "More important than the investment aspect is the commitment to lifestyle. The purchase of a waterfront home or a condominium is more than a simple transaction to Gen X purchasers - owning a recreational property underscores their dedication to family and balance."

"While buyer's market conditions exist virtually across the board, sellers of recreational properties from coast-to-coast are clearly content to wait out the storm," says Polzler. "They are in no hurry to unload their product. Many have held on to their properties for generations - they're fully-owned yet underutilized, which has prompted some aging owners to list them for sale."

The report also found that while low-ball offers are on the rise, very few meet with success. Through tough negotiations with multiple sign backs, Buyers who are serious tend to find out the hard way that Sellers are serious too. As a result, the sales-to-list ratio remains relatively high in most recreational property markets across the country.

"The prospect of greater stability down the road is creating cautious optimism in the marketplace," says Ash. "Purchasers are seeking to buy quality product, whether it be situated on lakes, rivers, or ponds, before values start to once-again edge up.

Demand for recreational property will always be more volatile, because it's a luxury… but residential sales in our market area remain brisk. Lower interest rates and comfortable prices have brought first-time Buyers into buying mode and there are signs of a broader recovery beginning & experienced Realtors are effective at finding innovative means of structuring offers in order to comfortably accommodate both Buyers and Sellers.

A record-breaking number of homes were sold in Ottawa last month, up 3.9 per cent from May 2008, and for more money. The Ottawa Real Estate Board said 1,969 residential properties were sold in May, compared to 1,896 a year ago. The May figure is a 19-per-cent increase from a month ago. There are more sales reported across the greater Toronto area, as well. The Toronto Real Estate Board reports their market is hot again… & many of these folks are selling their digs in the city and heading for our beautiful hills.

There’s some conjecture that this is, in part, due to the steady publicity being given to the “Revitalization” plan for Bancroft’s town core. (see: http://www.downtownbancroft.com/wp-content/uploads/januaryhandout.pdf or http://www.downtownbancroft.com/wp-content/uploads/revitalization.pdf for an overview.)

Some believe that people are seeking a quieter, cleaner life style and others point to the increasing demographic of retirees…

The Buyers that I’ve recently met are an eclectic group. All very nice, interesting people who I’d be pleased to have as neighbours… and they all comment that our area is as beautiful as any they’ve visited AND less congested.

Most of them think that property in the area is priced more attractively, too.