Profit meets fun in world of investment.
As baby boomers look toward retirement , many are investing in real estate, often purchasing vacation properties.
According to an Angus Reid Stategies poll conducted in May, one in seven Canadians owns a vacation property and one in four would like to purchase recreational real estate in the future. Forty-one per cent of vacation property owners surveyed are over the age of 55, at the top end of the Baby boomer bracket.
Analysts anticipate that peak baby boomers will go on buying vacation homes until the end of the decade, while the next group of boomers is likely to continue the trend until 2014 or later.
"Luxury recreational property sales are set to soar as affluent baby boomers drive demand for upscale product from coast to coast," says the 2007 RE/MAX recreational property report.
The trend is similar in the US, notes the National Association of Realtors:"Baby boomers in their peak earning years are igniting demand for second homes near beaches, lakes, ski resorts and golf courses."
According to former association chief economist David Lereah, "We're seeing the Baby boomers nearing retirement age, and we're seeing real estate play a more prominent role in their investment planning because of their memories of the stock market declines."
Particularly for the most prosperous boomers looking to invest their wealth, concerns about stock market fluctuations are among the main reasons they choose real estate, says Ottawa-based ScotiaMcleod director and senior investment executive David Cork.
A boomer himself, Cork specializes in the impact of demographics on social and econmic life. Co-author of the bestselling The Pig and the Python: How to prosper from the Aging Baby Boom, he says, "The stock market blows ereal estate markets out of the waterover time, but doesn't work out for a lot of investors because they see its volatility and don't handle it very well. With real estate, it's out of sight, out of mind, and you get to hang out in it, too."
Other factors also steer the boomers toward the lakefront property or ski lodge. "It's a natural time for people to want to owm that cottage and they can afford it," says Cork. "It is also a time when boomers" parents are starting to pass away, That obviously has negative emotional implications, but it has positive implications from a financial perspective, in that they are starting to inherit.
"Significant amounts of wealth have been created in this country since the end of the Second World War and we are now seeing the results. A massive wealth transfer is taking place. So, there's the element of wealth storage. When you have excess wealth, what do you put your money into?"
He says the four main investment possibilities are cash, bonds, stocks and real estate.
"Obviously, some of your money goes into RRSPs, but that brings you no joy," says Cork. "I work in this business and I don't think people are able to build a family outing around their RRSPs."
But, with cottages in particular, "there is the element of building that generational place, where families stay connected and memories are retained. Ther is no doubt that boomers are puttingsignificant pressure on the market, especially given the common wisdomthat there is a limited supply of wonderful lakefront property."
RE/MAX realtor John Roberts, who specializes in properties in Constance Bay and other parts of Ottawa's far west, says many of his client are boomers. Often, they are seeking lakesidecottgaes with the intention of concerting them into high-end permanent homes when they retire.
"Then they sell their other home in the city," he says. "Their profit depends on the market at the time, but real estate is a very stable place to put money and their vacation property has given them plenty of enjoyment in the meantime."
RE/MAX Western Canada regional director Elton Ash says, "Baby Boomers are investing in the furture from both a lifestyle perspective and an economic standpoint.
"Tremendous equity gains have been realized in recent years as demand for recreational properties across the country swells. Given the aging of the population, this trend is expected to continue for at least the next five to 10 years as baby boomers move throught the cycle."
Tuesday, January 29, 2008
Monthly Statistics-December 2007 Red Deer Market.
Sales:
City Residential: 94 $27,028,669
City Residential Sales:
December-07 94 sales
December-06 130
Jan. 01/07 to 31/07 2.241
Jan. 01/06 to Dec 31/06 2.042
Decrease in city residential sales from:
December 2006 to December 2007 -27.69%
Increase in city residential sales from:
Jan-1 - Dec 31/06 to Jan 1-Dec 31/07 9.75%
City Residential: 94 $27,028,669
City Residential Sales:
December-07 94 sales
December-06 130
Jan. 01/07 to 31/07 2.241
Jan. 01/06 to Dec 31/06 2.042
Decrease in city residential sales from:
December 2006 to December 2007 -27.69%
Increase in city residential sales from:
Jan-1 - Dec 31/06 to Jan 1-Dec 31/07 9.75%
Wednesday, January 23, 2008
Real Estate boom eases but not done "by Harley Richards, Advocate Business editor"
Central Albertans looking for a financial home run probably won't find it in the residential real estate market this year.
But, says the president of the Red Deer and District Real Estate Board, homebuyers should still earn a good return on their property this year.
Randy Weind said on tuesday that he expects the residential real estae market to appreciate five to seven per cent in 2008. Those numbers aren't as attractive as the double-digit price jumps in recent years, but should represent a good balance for buyers and sellers.
"The days of the 40 per cent (encreases) are gone, but five to seven is very healthy and that's what I'm projecting, is healthy and stable."
Weins offered his outlook for 2008 after annoucing that home sales in the region last year narrowly set a new record.
His predictions were preceded by a review of a number of factors.
Weins expects oil prices to continue their upward trend and stimulate qctivity in the Alberta oilpatchand Central Alberta's service sector.
'The result should see additional movement of families into the area for good paying jobs. This translates into additional housing requirements."
He also thinks the local industrial and commercial sectors will enjoy a good year, further boosting employment and demand for housing. And Weins believes there will be a strong migration of medical professionals into the province, and lower interest rates.
But, says the president of the Red Deer and District Real Estate Board, homebuyers should still earn a good return on their property this year.
Randy Weind said on tuesday that he expects the residential real estae market to appreciate five to seven per cent in 2008. Those numbers aren't as attractive as the double-digit price jumps in recent years, but should represent a good balance for buyers and sellers.
"The days of the 40 per cent (encreases) are gone, but five to seven is very healthy and that's what I'm projecting, is healthy and stable."
Weins offered his outlook for 2008 after annoucing that home sales in the region last year narrowly set a new record.
His predictions were preceded by a review of a number of factors.
Weins expects oil prices to continue their upward trend and stimulate qctivity in the Alberta oilpatchand Central Alberta's service sector.
'The result should see additional movement of families into the area for good paying jobs. This translates into additional housing requirements."
He also thinks the local industrial and commercial sectors will enjoy a good year, further boosting employment and demand for housing. And Weins believes there will be a strong migration of medical professionals into the province, and lower interest rates.
Area real estate sales set record, By Harley Richards (Advocate business editor)
Real Estate Board says processed 2007 home sales best ever.
Despite a slowdown during the final months of the year, residential real estate sales in Central Alberta reached record levels in 2007.
Statistics issued by the Red Deer and Distric Real Estate Board on Tuesday revealed that home sales processed throught the board's Multiple Listing Service numbered 5.075 last year, up six from 2006, when the prvious record was set.
The combined dollar value of those sales reached $1.4 billion the preceding year.
In the city of Red Deer, 2.241 residential sales qccounting for $688.8 million were completed in 2007, up from 2.042 sales worth a combined $510.3 million in 2006.
Residential listings processed by the board during 2007 reached a record 8.594, a 32 per cent jump over 2006.
Randy Weins, president of the Red Deer and District Real Estate Board, said during a news conference on Tuesday the market was especially hot early in the year, with prices climbing rapidly, many people moving to Red Deer and inventory runing short.
But then the supply-demand balance started to shift.
"The foruth quarter of the year, compared to what we had been throught the previous two years, was very poor" said Weins.
One reason for this was a decline in the number of buyers in Alberta and this region.
"The oilpatch had a slow year in 2007, so a lot of people went home."
Weins said the slowdown did create a more balanced market, with both first time buyers and move-up buyers benefitting. It also brought some welcome relief to those working in the industry.
"We needed a bit of a breather." But, he added, statistics show that prices actually remained quite strong throughout the year.
A comparison of average and median prices for single-family homes in Red Deer indicate the quarterly figures for 2007 were higher than for the same periods in 2006 and 2005.
"Even thought the market relaxed in the fourth quarter, the median price of a single-detached dwelling in the city of Red Deer was up $19.000 over the fourth quarter of 2006," said Weins.
Meanwhile, the number of single-family homes sold in Red Deer during 2007 topped the corresponding numbers for 2006 and 2005 in every quarter but the foruth. In that quarter, 2007 sales were 243, compared with 290 in 2006 and 243 in 2005.
"A quartely picture using single-family dwellings really gives you an idea of what's happening in the marketplace, because everything else is relative to it," said Weins.
In the final month of 2007, the median price for a single-family home in Red Deer was $314.900, down from $312.000 in December 2006.
In the surrounding region, the median price for a single-family dwelling last month was $267.500, slightly more than the $267.000 recorded in November and well ahead of the $246.900 for December 2006.
For townhouses and condominium townhouses, the median price in Red Deer last month was $210.000, as compared with $204.500 12 months earlier.
Elsewhere in the board region, townhouses and condominium townhouses sold for a median price of $220.000 in December, while its November median was $230.500 and the December 2006 figure was $215.000.
The Real Estate Board cautions that average price information does not indicate actual prices for houses in the area.
Despite a slowdown during the final months of the year, residential real estate sales in Central Alberta reached record levels in 2007.
Statistics issued by the Red Deer and Distric Real Estate Board on Tuesday revealed that home sales processed throught the board's Multiple Listing Service numbered 5.075 last year, up six from 2006, when the prvious record was set.
The combined dollar value of those sales reached $1.4 billion the preceding year.
In the city of Red Deer, 2.241 residential sales qccounting for $688.8 million were completed in 2007, up from 2.042 sales worth a combined $510.3 million in 2006.
Residential listings processed by the board during 2007 reached a record 8.594, a 32 per cent jump over 2006.
Randy Weins, president of the Red Deer and District Real Estate Board, said during a news conference on Tuesday the market was especially hot early in the year, with prices climbing rapidly, many people moving to Red Deer and inventory runing short.
But then the supply-demand balance started to shift.
"The foruth quarter of the year, compared to what we had been throught the previous two years, was very poor" said Weins.
One reason for this was a decline in the number of buyers in Alberta and this region.
"The oilpatch had a slow year in 2007, so a lot of people went home."
Weins said the slowdown did create a more balanced market, with both first time buyers and move-up buyers benefitting. It also brought some welcome relief to those working in the industry.
"We needed a bit of a breather." But, he added, statistics show that prices actually remained quite strong throughout the year.
A comparison of average and median prices for single-family homes in Red Deer indicate the quarterly figures for 2007 were higher than for the same periods in 2006 and 2005.
"Even thought the market relaxed in the fourth quarter, the median price of a single-detached dwelling in the city of Red Deer was up $19.000 over the fourth quarter of 2006," said Weins.
Meanwhile, the number of single-family homes sold in Red Deer during 2007 topped the corresponding numbers for 2006 and 2005 in every quarter but the foruth. In that quarter, 2007 sales were 243, compared with 290 in 2006 and 243 in 2005.
"A quartely picture using single-family dwellings really gives you an idea of what's happening in the marketplace, because everything else is relative to it," said Weins.
In the final month of 2007, the median price for a single-family home in Red Deer was $314.900, down from $312.000 in December 2006.
In the surrounding region, the median price for a single-family dwelling last month was $267.500, slightly more than the $267.000 recorded in November and well ahead of the $246.900 for December 2006.
For townhouses and condominium townhouses, the median price in Red Deer last month was $210.000, as compared with $204.500 12 months earlier.
Elsewhere in the board region, townhouses and condominium townhouses sold for a median price of $220.000 in December, while its November median was $230.500 and the December 2006 figure was $215.000.
The Real Estate Board cautions that average price information does not indicate actual prices for houses in the area.
Monday, January 21, 2008
Region's Housing Market will boom in 2008, " Newspaper: Red Deer Express"
Red Deer's real estate market is undervalued compared to other Canadian regions and will continue to boom in 2008, says Randy Weins, the president of the Red Deer & District Real Estate Board.
In a state of the region address yesterday to Red Deer media, Weins said despite the pause during the second half of 2007 from earlier dramatic and record setting levels in the market, the Red Deer region will experience overall gains in 2008 of between 5% to 7%.
And even thought the average price of a single family dwelling in Red Deer in the last quarter of 2007 was $337,000 it is still a bargain when compared to other markets, said Weins.
"I believe we are still undervalued. Based on our economy, and what the province of Alberta has, it is still a bargain," said Weins.
He noted the average price of a single family dwelling in Vancouver is now hovering around $1 million while in Toronto it is about $700.000, and in the $400.000 range in both Calgary and Edmonton.
The average MLS house price in the Red Deer region in December was $258.993. By comparison, the provincial average residential MLS price for the same month was just over $321.000.
Weins told members of the media the slowdown in the market during the second half of 2007, which included dramatically higher inventory levels, was due to a continued slowdown in the oil and gas industry, speculation buying no longer appearing as lucrative, and a steady increase in the number of citizens moving to other markets outside Alberta.
However, while there was a slowdown in home sales in the fourth quarter of 2007 the average and median prices finished just ahead of those for the same period of 2006.
Weins said that althought the market encountered a "restless" fourth quarter in 2007, the Red Deer area still ended up setting another annual record for listings, sales and prices.
"The market sustained a bit of a turndown adjustment, and lived throught it just fine," said Weins, noting inventory levels have now started to move back to a more healthy and balanced state.
Weins said he expects a slight improvement for the Red Deer market in the first quarter of 2008 compared to 2007 fourth quarter results.
"When things turn downward, it shakes people's confidence a bit,' said Weins. "It will take a few months to get things going again."
He predicted the market would start to boom in the third quarter with an improved performance from the oil and gas industry and commercial and industrial projects moving ahead.
"I think this will be the strongest quarter of the year, setting new records in most every range of the housing market," said Weins. "I am expecting average prices will increase by five and six per cent, to set the new records and again beat inflation."
Weins predicted 2008 fourth quarter results will be better than those in 2007, and 2008 will end on an "optimistic note - healthy and strong"
In a state of the region address yesterday to Red Deer media, Weins said despite the pause during the second half of 2007 from earlier dramatic and record setting levels in the market, the Red Deer region will experience overall gains in 2008 of between 5% to 7%.
And even thought the average price of a single family dwelling in Red Deer in the last quarter of 2007 was $337,000 it is still a bargain when compared to other markets, said Weins.
"I believe we are still undervalued. Based on our economy, and what the province of Alberta has, it is still a bargain," said Weins.
He noted the average price of a single family dwelling in Vancouver is now hovering around $1 million while in Toronto it is about $700.000, and in the $400.000 range in both Calgary and Edmonton.
The average MLS house price in the Red Deer region in December was $258.993. By comparison, the provincial average residential MLS price for the same month was just over $321.000.
Weins told members of the media the slowdown in the market during the second half of 2007, which included dramatically higher inventory levels, was due to a continued slowdown in the oil and gas industry, speculation buying no longer appearing as lucrative, and a steady increase in the number of citizens moving to other markets outside Alberta.
However, while there was a slowdown in home sales in the fourth quarter of 2007 the average and median prices finished just ahead of those for the same period of 2006.
Weins said that althought the market encountered a "restless" fourth quarter in 2007, the Red Deer area still ended up setting another annual record for listings, sales and prices.
"The market sustained a bit of a turndown adjustment, and lived throught it just fine," said Weins, noting inventory levels have now started to move back to a more healthy and balanced state.
Weins said he expects a slight improvement for the Red Deer market in the first quarter of 2008 compared to 2007 fourth quarter results.
"When things turn downward, it shakes people's confidence a bit,' said Weins. "It will take a few months to get things going again."
He predicted the market would start to boom in the third quarter with an improved performance from the oil and gas industry and commercial and industrial projects moving ahead.
"I think this will be the strongest quarter of the year, setting new records in most every range of the housing market," said Weins. "I am expecting average prices will increase by five and six per cent, to set the new records and again beat inflation."
Weins predicted 2008 fourth quarter results will be better than those in 2007, and 2008 will end on an "optimistic note - healthy and strong"
Subscribe to:
Posts (Atom)
