Monday, April 23, 2007

From Away's


If you've ever been out East, no not TO east, but Halifax or St. John's, you know, the real East, you are likely familiar with the saying, From Aways. It's not derogatory or a put-down, it is simply a descriptor that local people use to describe someone who is not born in the Maritimes.

One of the biggest myths of the local RE market here is that our prices won't ever go down because all of these "from aways" keep coming here driving our prices up. I had the pleasure of having breakfast this morning with four quickly-retiring "from aways" that are here on a whirl-wind tour of the RE town looking at moving here, to get away from the harsh winter climes of Edmonton.

One couple was my aunt and uncle, the other couple are their friends. My aunt and uncle have been talking about moving here forever; like most people that come here, they want to stay, and because they have family here, one would think it would be an easy transition. Yet they talk about it at least twice a year and still do not come.

Their friends, who are far more serious and are the drivers of this short little "drive-by, look see" trip are serious. They have seen a massive increase of their own home market value in Edmonton in one-year. If you aren't following the RE market outside of Victoria, theirs is far hotter than ours ever has been or ever was. They see this year as their opportunity to realize a dream.

Then they came here. While they may be looking in the wrong areas of town, their dream of a character house with 3-4 bedrooms and 2-3 bathrooms on a tree-lined street with a nice Garry Oak in their backyard has grown a little lost. They've driven through Gordon Head, View Royal, Langford, James Bay and Fairfield. They've been through Uplands, Cordova Bay, Mt. Doug and Estevan. They've even looked out in Sooke, Cobble Hill and Shawnigan.

They came armed with MLS numbers and addresses. They have been let down by the experience of driving past a home that doesn't match the mental picture they created when dreaming online. They'll keep looking today and will return this fall to look some more. They want to come here by 2009.

I doubt their experience is unique. If they are having reservations now, before even looking at the math of purchasing a home, I wonder how they'd feel then? If the boomer generation is riding as large a gravy train as the 'experts' say they are, then no worries. But will a $300K mortgage on a $700K home, that may not be quite as nice as the one they had in Edmonton, really be that appealing for retiree's?

7 comments:

greg said...

Come on, everyone knows retirees who want to come here are not subject to the same economics as the rest of us.

They're all loaded, they sold up for big dough, and Victoria is cheap.....

...Oh, sorry, these retirees are not from California, London or New York? Never mind, we still have the welcome mat out for well heeled "refugees" from select RE hotspots.

Vicguy said...

"They have been let down by the experience of driving past a home that doesn't match the mental picture they created when dreaming online."


If you are going by the advertisments that were discussed on another thread then this is another sign of the end of the boom,when the reality does not live up to the hype. Same goes for online advertising and looking at houses on MLS unless you are into the million dollar plus places.

"They're all loaded, they sold up for big dough, and Victoria is cheap....."

It's easy for us to say, I met alot of retirees from Alberta when I lived in the Okanogan and they are hesitant to move here cause of the increase prices and this was back in the 90's. They may in our eyes be loaded but they may live for an extra 20 years plus past retirement and may need that cash for health care the way the system is going and are not going to waste it on some half assed overpriced house in rainy Victoria.

Anonymous said...

There IS a solution for your aunt's and uncle's friends. I often hear that many folks who retire to the Hawaii of Canada (good ole Victoria), end up going back to their original provinces because they miss their kids, grandkids and friends.

That being said, you should advise them to UNLOAD their overpriced Edmonton home NOW while the going's good, and rent until they're ready to actually move to the island. In 1-2 years, they'll be laughing.

Imagine pocketing all that extra cash, then waiting it out in a rental. As retirees, they could well downsize into a TH or condo when they get here, by which time the pickins will be delightful. They will LOVE you for that advice.

hhv said...

Two things: it is often hard to convince owners to quit the market to rent. It is an emotional attachment and reason and rationality don't often trump. There is no sign of slowing down in the Edmonton market right now... but in Victoria? Depends who you talk to.

greg said...

Year over Year, single family house prices were down from last March according to CREA.....

Vicguy said...

Time to Raise Rates ?

http://www.thestar.com/article/205299

Anonymous said...

HHV, it's me, anon, again....

Good point about not being able to convince homeowners to quit while ahead. Do you know why? Fear and greed combo. BOTH caused by the thought that ..."oh no, the market could not possibly turn on us!!!! If we hang in there, our house will be worth even more...."

But, I took at this situation as the perfect opportunity to see if one can 'do with' a smaller home. If the Edmontonians sell at PEAK prices, then rent a condo or TH in Edmonton BEFORE retiring to Victoria, they'll learn several lessons.

We (empty-nesters) sold a 4-bdrm in another province. Neither of us had ever lived in anything but a SFD ALL our lives, so we could not adjust to the thought of sharing a garden with neighbours, or even, heaven forbid, NOT stepping outside onto terra firma, (that is, living in an apt or condo).

Anyway, we rented a TH for 2 years, were miserable and felt closed in, then just moved into a SFD a few months ago. We had not gardened in over 2 years, so THOUGHT we missed it...

SO, guess what? Now that we HAVE our own garden, we don't really WANT it anymore, and realize that when we DO buy, it'll be a condo or something small! NOT a house with all that extra work. Good lesson!