The old adage that in real estate location, location, location are the only true valuable elements in buying a home. Years ago now, I was an owner of a house in Montreal, top of the mountain twenty yards from the vaunted "Westmount" -- the view from the house was spectacular and an anomaly in the neighborhood, insofar as every single house but ours, was a multi-million affaire -- everyday the street was full of painters, landscapers and general maintenance people, who were seining that every aspect of every house was at all time prefect...
Our house was less than that, we both worked for a living (granted so did a lot of my neighbors) but our house was ordinary in an extraordinary area. For me it was a house, yes a nice house, but it was just a house!
When time came to sell the house we had more than a 100 visits! Which is a lot I assure you, we had one "open house" event and more than 30 people came to see the house. The biggest complaint we got was the they didn't like the color of the walls -- I restrained myself from stating the obvious; its called paint!
Anyway, my point was the our house sold within a few weeks, and we even had a bidding war for the place at the last minute.
Now, all this is an intro to the housing market and how millennial view housing. They view housing the same way I do, it is important to live and work locally if at all possible, a smaller footprint is desirable -- less stuff.
The question become what happens to all these suburban homes when the baby-boomers -- retire and die? This is not a nothing question. While I was selling my house and getting dozens of visits and multiple offers a colleague was also in the process of selling his house. He lived in the burbs and he got few visits and even fewer offers -- If memory serves it took him more than 3 years to sell his house, and he got exactly what he paid for it 15 years earlier. Zero capital appreciation, if you take that in consideration he would have been better off renting all these years and investing his capital in the market.
This is an important question; what happens to all these homes that the baby-boomers are expecting to sell as they downsize their living space?
Unfortunately I have no easy answer to that question; my friends though I was a little crazy to buy such an expensive property when I could have had twice the space "only 30 minutes from downtown montreal" -- yeah a 3 am a Wednesday you can make it in 30 minutes, but a wet Monday morning its more like one hour -- if not more.
This is a question I raised a few years ago about Malls -- and how the world's shopping patterns were changing. Granted it took a few years to adjust -- its only now that the Mall market is facing "the end of the world" in terms of pricing.
However, its important to note that like Malls its a marginal thing. Malls are still being built in America -- as will suburban homes, the issue is at the margin. if the Millennials decide that even with children its better to live in the city, it doesn't have to be all of them, just an appreciable portion. It will impact the REIT business, especially that which is based in poorer and less well connected areas.
If the Millennials give up the car, or even if the car gives them up (thing self driving cars) then the image changes dramatically.
I am just saying that we are at the edge of a demographic change that will have an impact on residential real estate prices -- where would you buy real estate, where demand is high and about to go higher or in the burbs...
Our house was less than that, we both worked for a living (granted so did a lot of my neighbors) but our house was ordinary in an extraordinary area. For me it was a house, yes a nice house, but it was just a house!
When time came to sell the house we had more than a 100
Anyway, my point was the our house sold within a few weeks, and we even had a bidding war for the place at the last minute.
Now, all this is an intro to the housing market and how millennial view housing. They view housing the same way I do, it is important to live and work locally if at all possible, a smaller footprint is desirable -- less stuff.
The question become what happens to all these suburban homes when the baby-boomers -- retire and die? This is not a nothing question. While I was selling my house and getting dozens of visits and multiple offers a colleague was also in the process of selling his house. He lived in the burbs and he got few visits and even fewer offers -- If memory serves it took him more than 3 years to sell his house, and he got exactly what he paid for it 15 years earlier. Zero capital appreciation, if you take that in consideration he would have been better off renting all these years and investing his capital in the market.
This is an important question; what happens to all these homes that the baby-boomers are expecting to sell as they downsize their living space?
Unfortunately I have no easy answer to that question; my friends though I was a little crazy to buy such an expensive property when I could have had twice the space "only 30 minutes from downtown montreal" -- yeah a 3 am a Wednesday you can make it in 30 minutes, but a wet Monday morning its more like one hour -- if not more.
This is a question I raised a few years ago about Malls -- and how the world's shopping patterns were changing. Granted it took a few years to adjust -- its only now that the Mall market is facing "the end of the world" in terms of pricing.
However, its important to note that like Malls its a marginal thing. Malls are still being built in America -- as will suburban homes, the issue is at the margin. if the Millennials decide that even with children its better to live in the city, it doesn't have to be all of them, just an appreciable portion. It will impact the REIT business, especially that which is based in poorer and less well connected areas.
If the Millennials give up the car, or even if the car gives them up (thing self driving cars) then the image changes dramatically.
I am just saying that we are at the edge of a demographic change that will have an impact on residential real estate prices -- where would you buy real estate, where demand is high and about to go higher or in the burbs...
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