Generation X: just about to outbuy baby boomers?

The recent RE/MAX report shows that the present Canadian market with recreational property has been taken over by Generation X, which replaced the previous main buying force formed by the baby boomer generation growing older.

Who are the people in Generation X?

Over the years, social scientists have developed the practice of giving fancy names to the generations of the 20th century. Dating of a particular generation depends on all the different political and cultural features of the time that influenced the upbringing of members of that generation. The baby boom generation, that are people born from mid 40's till late 50's, was the strongest buying force, or at least until only a couple of years ago. But now the majority of these people have retired or are preparing for it.

Now the children of baby boomers (known as Generation X) have grown up and in their 30 - 40's they are in a sufficient financial condition to purchase recreational property at almost any price.
You will see this change especially when we compare the results of the first half of this year with the ones from last year. The trend moving toward recreational property buyers in their 30's was observed by 74 percent of markets in this year's surveys. The recreational properties sold varied from waterfront cottages to resort condos. This compares with only 40 percent in 2008. From January till April 2009, the number of sold recreational properties declined - at least two thirds of all surveyed markets reported such trend. But now, the buyer activity has grown with the beginning of the new cottage season, as we can see from the results of many major centres.

The most important points of the report:

Supply is suitable in most markets, but heated activity in the lower-end has resulted in tight inventory levels for entry-level product in 18 per cent of markets. Older cottage owners, a lot of whom own their properties outright, are selling to younger buyers with families. Some American cottage owners in Canada are taking advantage of the stronger dollar to cash out of the market. There are some exceptions of course, but we can say that American purchasers have mostly disappeared. One of the known factors in the marketplace is pent-up demand. For instance some buyers who had intended to purchase recreational properties in the second half of 2008 decided to defer the transaction till the next year. Florida, Arizona, California, Nevada and other warmer parts of USA are the states where older Canadians still continue to demand secondary homes. Generation X buyers are ready to spend their hard-earned money on vacation homes, but at the end of the day, they want to know that they’ve negotiated the best deal possible.

Photo source: thinkpanama