Do you have family members planning to downsize “sometime” but will likely be caught napping if the real estate market changes? Here are some likely reasons they are stuck and what you can do to help them.
Inertia
Human nature guides us through an increasingly complex world. One of our built-in responses to change is to do nothing and pretend it isn’t happening. It is so much easier to make no effort than it is to consider a response to changes around us, then come up with a plan and take action. This certainly applies to how we respond to shifts in the real estate market. If you have been following the market in the Greater Toronto Area (GTA) for some time, you will know that we have experienced the longest run-up in selling prices in history. Many economists state this is not sustainable. However, a large number of home-owners have become complacent about the increases, expecting them to continue or just level off. Underlying this approach is a belief that market increases will last until they choose to downsize and move. A market correction or even a drop is not “on their radar”. Such a sudden change could play havoc with their “sometime” plans. If you are concerned for your family member, here are some suggestions.
Strategy:
Do your own research into the market and collect solid facts to show what is going on. If you don’t have the time or expertise to do so, contact a financial planner or realtor to help you create a market overview. Be sure to consult with someone who demonstrates a realistic understanding of the current market. Meet with your family member to discover their view of the market then present your facts. Their response will give you a good indication of how receptive they are. You may need to call for additional help if your concerns “fall on deaf ears”.
Stuff
The amount of “stuff” we have in our homes has reached historic levels. One author calls this condition “Stuffocation“. Our materialism has caught up with us, making it very difficult for us to respond quickly to rapid or sudden changes in the real estate market. Anyone who has plans to sell and move in a short time must first deal with their excess stuff. This doesn’t happen overnight. For further thoughts on this topic, see Downsizing Resistance. What’s behind it? Section “E. Feeling Overwhelmed”.
Strategy:
1. Help your family member come up with a “stuff plan” . Start with one area in one room, such as a closet. Take one small step and build on it.
2. Deal with it like a project – i.e. help to schedule time each day for working on the goal, define major milestones and measure progress
3. Get help from other family members and/or professionals.
Aging in Place
Recent improvements in adapting homes for seniors have allowed many people to remain in their homes longer than they expected. Your family member may have an indefinite downsizing date in mind because they hope to modify their home to suit them as they age. One of my fellow realtors, Jeffrey Kerr, specializes in helping people through this process.
Strategy:
Have a frank discussion with your family member to learn about their plans for the home as they age. They may be able to remain in their home for many more years and defer downsizing.
Nowhere to go
Some home-owners who would otherwise take advantage of the appreciation of their home’s value, delay because they feel there are limited choices available for their next home. This could be out of a concern over the current price of homes or a limited supply of homes for downsizers. Experience shows this is because of a lack of knowledge and exposure to true availability.
Strategy:
Consult with a local Realtor who specializes in the area where your family member lives, for a review of options. Of course, any advice must be wrapped in the knowledge of what is important to your family member for their next home.
What are our thoughts on the current market in the GTA?
* You may notice some Canadian spelling in these posts. The words may look odd but that’s how we spell them. We’re used to it.
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Author:
Unless otherwise credited, all posts are happily authored with a quill pen …
Paul Ferri, Broker, ASA (Accredited Senior Agent)
RE/MAX Unique Inc. Brokerage*, Toronto, Canada
*Each office independently owned and operated.
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