Hi:
Well, mining the primary asset, that is the family home, is what many people plan to do when they retire. With real estate prices rising world-wide, many are gleefully rubbing their hands and calculating how much they can get out of their family home.
I talked to one person last week who listed their home last year for $800,000. There were no takers, so they pulled it off the market. They sold it in a week this March for $1.1 million. This couple made $300,000 by sitting in their home for a year!
New-found wealth of comfortable proportions inspires many fantasies, and in truth, some of these dreams can now come true. There are many, many people in this same position. Especially in hot urban areas, prices move quickly. My realtor told me one west-side house had twenty offers, and eventually accepted the highest bid - a cool one-quarter million over their asking price.
I think this is quite a unique bubble, and if possible, we should take advantage of opportunities. Of course the doom-and-gloomers predict prices will drop stratispherically.
Real-estate does have it's bell-curve, and cycles exist. However, what long-term residents must consider is globalization. People live everywhere, and we must move beyond our local-yokel conceptions of high prices and what's fair. What's fair is what the market can bear.
We forget that poor people live in Paris, London and San Francisco. How and where they live might be challenging for them, just as it is now challenging for the average young person to buy in Vancouver.
Yet Vancouver is full of young people. People can and do adapt. Before we take a stance it's wise to look at the big picture and the winds of change: demographics, globalization, technology, environmental and industrial shifts. More tomorrow.
M.
retirement and money
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