Good News for Downsizing Baby Boomers
BY DEB ABBEY, VANCOUVER COURIER
AUGUST 24, 2011
My husband and I downsized a few years ago. We'd just sold our business and were planning to take a couple of years off as a sort of retirement installment. We sold our house in Kitsilano and full of naïve enthusiasm, came very close to buying a 400 square foot studio apartment with a Murphy bed. It had a dining table that cleverly dropped down when you raised the bed. We ended up buying a one bedroom and den in Yaletown. Crisis, narrowly averted.
We spent weeks ruthlessly culling our prized possessions. Family and friends came empty-handed and left with wing chairs and toaster ovens and macramé wall-hangings. Okay--we didn't have any macramé wall hangings, but they left with everything that wouldn't fit in our new apartment.
Even my treasured shoe collection wasn't safe from our moving zeal. After about a hundred trips to the local Sally Ann and a weekend garage sale we were done. My husband pored over the floor plan wondering if we could fit a baby grand in the corner of our new living room.
And then it was moving day. After the movers had come and gone, the boxes were piled to the ceiling of our new digs, covering almost every square inch of floor space. My daughter and my best friend laughed hysterically (and cruelly in my opinion!) when they realized that I'd packed up five dozen Ikea wine glasses that we'd used for charity fundraisers. I cried.
Needless to say, we did a lot more sorting, invited our friends back for seconds, and made another dozen trips to the Sally Ann before we finally got settled. Sadly, no baby grand or charity fundraisers in our future.
In spite of the short-term pain, it was a good decision for us. We've travelled a lot and it's been wonderful to just close the blinds, lock the door and go.
In the end, we decided to downsize because we weren't interested in financially or physically maintaining a house any more. Our kids were grown up, our family cat had died of old age and we just didn't need the space. And, of course, the value of our house had increased a lot since we'd built it in the early '80s.
Still, it's not an easy decision and there are a lot of things to consider, especially if you've lived in your family home and neighbourhood for decades.
Is keeping your house financially viable or is your retirement income being eaten up by increasing property taxes, insurance, maintenance and repairs? Can you live without your neighbours, your garden or your baby grand?
Is your house going to need major repairs or renovation work in the next few years? Will you be able to live there if your health deteriorates or you have mobility issues? Are there adequate healthcare and other facilities close to where you live?
Are you debt free or would you like to free up some home equity to become debt-free or travel or help the kids buy a home?
Recent surveys have shown that only 40 per cent of baby-boomers in B.C. intend to stay in their current homes when they retire. That's more than 10 per cent below the national average.
High levels of mortgage debt and our buoyant real estate market may have a lot to do with that trend. For many families, it's simply not feasible to stay in a home that has appreciated so much in value that the annual taxes and maintenance costs are more than the value of some homes in the U.S.
People considering downsizing in many other parts of North America have the added challenge of having to sell their home for a fraction of what it was worth a few years ago. Fortunately, Vancouverites don't have that problem in this market.
The influx of real estate investment dollars from mainland China and other foreign climes (like Alberta) looking for a safe haven has been driving single family house prices higher for the past couple of years.
That's good news if you decide to sell your house and downsize to a townhouse or condo. The marginally slower pace of those markets just might give you some breathing room while you search for a new home.