BC Sunshine Coast real estate by Menno at Royal lePage Real estate on the BC Sunshine Coast

Has time stood still on the Sunshine Coast? One might think so, looking at the quaint villages and rustic hamlet-like settings. Still,  we live in a community of active, steady growth. It’s rustic yet quite dynamic, what an interesting combination.

An island? It's got to be if the only way over is by ferry or float plane. Many people believe that the Sunshine Coast is an island - we'll see that this isn't quite true.

On the Sunshine Coast, we see a form of controlled development with decisions being made at the local level on the basis of private investment initiatives. The face of the world is changing, even on the beautiful and peaceful Sunshine Coast. In our case, the change goes rather slowly. Changing demographics are noticeable everywhere – although on the Sunshine Coast we see a somewhat extremer example of representation of baby boomers (1946 – 1966) approaching their retirement ages. How is that going to affect us? As we’re viewing today’s retirement trend, we know that this generation’s housing requirements are going to change.

The baby boom generation, while growing up, also started an economic boom, as large numbers of consumers went through the various phases of life with much financial prowess. The baby boom generation has always liked “stuff” and often large quantities of “stuff”. In terms of wealth, they have put much equity in real estate. Typically, boomers would purchase or build larger homes. In their early retirement or possibly even only later on, the boomers may want to sell off these large homes – which may have an impact on home values in certain price categories, for decades to come.

Some things change briskly, other things very gradually. Just looking around on the Sunshine Coast, you’ll see examples of rapid change as well as virtually no-change.

A nice house in a great neighbourhood with all amenities nearby. Better yet, it may have an ocean view or if you really want, it could even be ocean frontage.

HOW TO FINANCE RETIREMENT

Some say that aging baby boomers may drive down house values for the next two decades as they sell their homes to finance retirement. While some boomers have excellent retirement plans awaiting them, others will need to overcome certain financial struggles, particularly if they have no pension in the works, no retirement nest-egg or no other sources of income.

House prices have always been closely tied to demographic trends. Large homes are more expensive than small homes – but the land they’d be sitting on would be of comparable value. This in itself may lead to the oddity that the prices of large homes and small homes will be drawn together even further, since demand for larger homes will diminish (boomers selling) and demand for smaller homes will increase (boomers buying). This, in conjunction with a general continuing trend towards smaller families in the following generations, could mean that larger homes will see their values reduced, in relation to other properties on the market (such as smaller homes).

What we tend to say is that when things are good in Vancouver, they’re usually also quite okay on the Sunshine Coast – this due to the close geographical proximity.

It's only human to fight change, particularly when things are going well. Things are indeed pretty good on the Sunshine Coast so why would we want to change anything?

CHANGES NEARBY AND FAR AWAY

Of course, our local market is not the only one that’s going to change. In fact, much of the Western world is seeing an advancing baby boom generation – meaning that similar developments (let’s not quite call them problems) will be evident elsewhere.

Demand for British Columbia homes by people moving into the area might help mitigate the effect of a baby-boomers’ sell-off, assuming that the influx of buyers to BC may continue. Obviously, bringing in Thousands, if not Ten Thousands of new residents each year will have an impact on our housing market: it creates a shortage. Most newcomers to British Columbia go straight to the Vancouver area. The mushrooming market, however, also affects communities at a certain distance. This is why even Victoria, the Okanagan and particularly the Sunshine Coast feel the effect, albeit mostly indirectly, from the migration to this part of the world.

However, extrapolation of past and current occurrences into the future may not work at all. What we do know is a simple certainty: those that are 55 now will be 65 in ten years. What we don’t know is where they’ll live, what their life preferences may be or what our real estate market is going to do. We think it’s going to go up – as it usually does. But we can’t be certain of that.

Next, we are going to speculate HOW things may change, if indeed they have to. In life, some change is inevitable so we better see if an adjustment process is required.

WHAT MAY HAPPEN OR NOT

A lot of other things can happen in the world. Those events may soften the impact from retiring baby boomers or even enhance it. Market developments are impossible to predict correctly. The list of impossible-to-predict factors is endless. How the economy is going to behave here or elsewhere remains guesswork. How climate change is going to affect us or others remains a mystery. How political developments are going to affect us is a sure unknown. It’s also developments in far-away places that may have an impact. For instance, how about if China were to disallow foreign investment, all of a sudden? Or how about the opposite: if more of the economic growth of India and China were targeted this way, how would that affect our markets?

Even personal finances tend to change. For instance, a certain savings pattern worked well for your grand-parents, they got almost 20% interest at the bank. This doesn’t necessarily work for today’s generation, we may get 1%, these days. Things will change again and nobody knows how, when and where. Is the stock market going to be “the place to be”? Are commodities a smart place to put one’s money? Well, real estate then? Nobody knows these things.

What we all know for certain is that we’ll have to live somewhere. Perhaps a home for the future isn’t such a bad investment after all. The Sunshine Coast, as such, is a pretty special place to come home to.

The global village is an assortment of islands, say some. Others may insist that there are no real islands left in the world - we're all connected, somehow.

OKAY, WE’RE NOT AN ISLAND

After coming over to the Sunshine Coast by ferry, one might assume that you’re on an island. Looking at the regional map, it’s easy to see that we’re not at all an island, just not connected by road to Vancouver. It does give us a bit of a feel of isolation, just like one might experience on an actual island. Every day, there’s a “last ferry” and that fact alone creates a special atmosphere.

The Sunshine Coast is relatively small, when viewed in the bigger picture. Our market develops – actually with much similarity to other markets. When the Vancouver real estate market is booming, we see increased activity here too. When Vancouver prices sky-rocket, we can expect prices to go up as well. This is why I keep having this discussion with people: that we’re not an island (not spiritually and not even geographically).

There's no harm in checking local marketing wisdom before entering the world of real estate. See here for yourself what goes on in our "world".

MORE reading on market-related topics here in the library of real-estate related topics:

Diversity on the Sunshine Coast: http://www.mennorealty.ca/Blog.php/its-diversity

Procuring mortgage money: http://www.mennorealty.ca/Blog.php/equals-free-money

Market statistics for December 2012: http://www.menno.ca/?p=19325

Internet marketing explained: http://www.mennorealty.ca/Blog.php/over-the-internet-1

The real estate buying process explained: http://www.menno.ca/?p=19392

Becoming a Sunshine Coast home owner: http://www.mennorealty.ca/Blog.php/ownership-benefits