The recent RE/MAX report shows that the current Canadian market with recreational property has been taken over by Generation X, which replaced the previous main buying force formed by the baby boomer generation growing older.
Who are the people in Generation X?
Giving interesting names to the generations of the 20th century is a funny habit of social scientists. The members of a certain generation have been influenced by all the different political and cultural aspects of their time period which gives us the dating. The baby boom generation, that are people born from mid 40’s till late 50’s, was the most important buying force, or at least until just a few years ago. But now most of these people have retired or are preparing for it.
At the same time, the children of baby boomers known as Generation X, now in their 30’s or 40’s, have finally acquired the financial ability to purchase recreational property at almost any price.
You will see this change mainly when we compare the results of the first half of this year with the ones from last year. 74 percent of markets surveyed this year reported a trend towards thirty-something buyers buying a wide selection of recreational property products ranging from waterfront cottages to resort condos. This compares with just 40 percent in 2008. From January till April 2009, the number of sold recreational properties decreased – at least two thirds of all surveyed markets showed such trend. However, a lot of major centers are now reporting an increase in buyer activity since the cottage season began.
Highlights of the report:
While the overall supply seems to be reasonable in most markets, the most tight inventory levels are what concerns entry-level products (18 percent of markets report this), as most of the buyer activity was taking place in the lower-end. Older cottage owners, a lot of whom own their properties outright, are selling to younger purchasers with families. As the Canadian dollar is now stronger, some American cottage owners in Canada are trying to take advantage of this situation to cash out of the market. American purchasers have mostly fallen off the radar, with some exceptions. One of the known factors in the marketplace is pent-up demand. For example some buyers who had intended to buy recreational properties in the second half of 2008 decided to defer the transaction till the next year. Older Canadians continue to seek secondary houses in warmer parts of the U.S. such as Florida, Arizona, California, and Nevada. Purchasers from the X Generation are now usually prepared to spend their hard-earned dollars on recreational properties. But at the end of the whole transaction, they want to be sure they’ve gotten the best possible result out of it.
