I hope that this message finds you well. Admittedly, it’s been far far too long since I’ve last written a monthly e-newsletter, so long, in fact, that I may even need to re-introduce myself to some of you who are receiving this. I do apologize for the absence.
My return to newsletter writing stems from two main reasons: 1) a number of people have indicated to me in the time since I last delivered an e-newsletter that they miss reading it and would like to see it return, and 2) given the tremendous turmoil of today and the seemingly daily curve-balls of uncertainty the political world is throwing at us, and the impacts these decisions will or may have on markets and life in general, I thought I’d begin this mail-out again to keep you up-to-date on decisions that may affect real estate in BC, so that you can make the most informed decisions possible.
A quick and important reminder that if you do not want to receive this newsletter, you may opt out at any time. That said, I do hope that you decide that there is value in staying engaged with it and with me and that we can re-build that connection. As always, this newsletter will be emailed out once per month, and I’m easy to reach if you have any personal real estate related questions that aren’t discussed in this newsletter or if there’s newsletter content that you’d like to discuss in more detail.
Before I get to the market matters, first, a quick update on me and the family. Things have been going well. The boys have grown up a lot, and our oldest will be graduating highschool this spring. Crazy how fast time flies. Many hours have been shared shuttling the boys to various activities and cheering them on in their pursuits and performances. In short, life is busy, but good.
What hasn’t been as good, of late, is the real estate market… depending on one’s objectives and perspective, of course. Interest rates rose at historical levels over the past two years putting substantial financial strain on many homeowners, individuals, and families, especially those with variable rate mortgages.
We’ve seen some interest rate reprieve over the last several months as rates have started to come back down, which is welcome news for many, but there was expectation that the market, because of these interest rate drops, and the expansion of the mortgage cap to $1.5 million would re-stimulate the market, but a change of US president and tariff and annexation threats, various wars, and many other factors, have put a wrench in those expectations… at least for now.
At present, housing inventory levels throughout the Fraser Valley remain high and sales low, so conditions certainly favour buyers. Wink wink nod nod if you’re in the market to buy.
With so many different political promises regarding housing including rapidly increasing housing supply, eliminating certain housing related taxes, increasing incentives for developers to build more multi-family units, tariff impacts that may negatively impact construction costs, changes to immigration policy, etc… there are a lot of question marks out there. This amount of uncertainty typically has buyers and investors hitting the pause button, and that’s what we seem to have right now. People, in general, may, understandably, lack the confidence to make a move given the ever-shifting landscape.
That said, I stand by what I always say to people with whom I meet when they are deciding whether or not to move, and that is to ask yourself this one simple question: “does your current home meet the needs of you and your family?”
If the answer is “no,” then a further conversation about future housing needs may be needed.
And this conversation about future housing needs is happening in my own home too.
If you have the time and interest, I want to share with you an interesting article I recently read in MacLean’s magazine on this very topic.
The article, titled “Why Gen Z Will Never Move Out,” discusses housing affordability and the financial challenges related to home ownership especially for today’s youth. Through a series of interviews with families across Canada, the article describes the growing dependency adult children have on their parents caused, in part, by a lack of affordability and the multi-generational living arrangements that have resulted.
As a Dad of four boys, the question of where my children will be able to afford to live has been on my mind for years.
In June, my wife Kim and I anticipate celebrating the high-school graduation of one of our four boys. It’s a reminder, as if my rapidly graying hair and declining athleticism weren’t sign enough, that life continues to move along at too fast a pace.
Like many young people, he has some important life decisions to make. No longer is life prescribed such as it has been through elementary and secondary school. The doors of possibility are now wide open, and his next steps on his future path are yet to be determined. And while his future story is yet written, what is for certain is that he, and most young people his age, will require assistance.
The idea of multi-generational households is not new for certain regions and cultures in the world, but I would suggest that in Canada, for generations, the typical milestones for youth post formal education has been to seek employment, partnership, and the raising of a family in their own home… independent, in many ways of course, from their parents.
However, today, as the article explains, the financial landscape is much different. Young people, well into their twenties and beyond, are now dependent on their parents for much longer and parents, as a result, are now shouldering greater financial responsibility and replacing the empty nest with a full one. This added financial responsibility and shared living arrangement not only impacts parents’ day-to-day lives but also their ability to save for their own retirement down the road.
In my role as a real estate agent, I have experienced first-hand the conversations and challenges individuals and families face as they make difficult decisions around housing. In this province, there is a growing popularity, often out of necessity, for property that can accommodate multigenerational families.
I have seen the metaphorical writing on the wall for some time now. In fact, I foresaw this trend emerging years ago when I offered those connected to my business and e-newsletter the opportunity to join me in a free workshop I was hosting on future family planning called “Legacy Investing.”
In that workshop, I outlined the rising costs of housing and the strong likelihood that these costs would mean that many young people would struggle mightily to purchase a home in the future. In some cases, this lack of affordability would mean these young people would be unable to afford to leave the family home or would have to leave the community in which they grew up not out of choice but out of necessity.
My suggestion at that time, when interest rates were very low, was to borrow on equity from one’s principal residence to invest in a second property that could be rented and held long term. That second (investment) property would serve as a savings mechanism from which future equity could be drawn to pay for things like post-secondary education or their children’s future down-payment on their own home, or it could be a property that could be sold for such aforementioned purposes, or the children could move into it later in life.
I rightly assumed that house values, as they have historically done, would increase in value over that time and so it would be less expensive in the long term for parents to assist their children with their future home needs sooner than later.
At the same time that I was advocating for this investment strategy and talking the talk, I was also walking the walk. My wife and I took many proactive steps at that time to secure housing that would work as a legacy investment for our family. These decisions are ones that I’m glad we made.
It’s been years since those workshops were offered and the housing and investment and rental landscape has changed significantly since then. Far less landlord favourable legislation now exists, interest rates have risen, and so too has the seemingly astronomical costs of living. What remains the same, however, or perhaps even more prevalent is that housing remains out of reach for many.
My wife and I want our boys to be able to live in the lower mainland if they so choose. We don’t want them to move away because of necessity. We want to be able to assist them with a down-payment for their own home one day – should they need it, or have a home that can accommodate the family now, but also provides flexibility for adult aged children that choose to live at home. We want a home in which we can safely grow old as mobility for us or our aging parents diminishes.
I believe that it is important for families to have conversation about their housing needs that extend beyond the here and now, and I believe that the sooner these discussions can happen, the more can be done to proactively plan for a better future.
If, like me, your family’s future housing needs is on your mind, I would love the opportunity to sit down with you and your family and have an open and honest dialogue about what those future needs may be.
I’d like to chat with you about your current housing needs and what you foresee may be the housing needs of your family moving forward. I can share with you some of the plans that my family has been making and other families with whom I have worked have made to ensure that actionable steps are taken now for tomorrow’s benefit.
If you have interest in getting together for this reason, or for no other reason than to catch up or for me to provide you with an update on your property’s current market value, please reach out. I’d love to hear from you, to re-connect, and to assist any way I can in helping you and your family plan for the future.
If this is not a conversation for you at this time, no problem. The invitation remains open for a time when you feel it may be more applicable. In the interim, if you know someone who may benefit from this conversation, please feel free to forward my contact information along to them or let me know who they are and I’d be happy to reach out and connect with them.
I look forward to those conversations and staying connected with you in the months ahead!
Casey
