Generation X: finally revealing their purchasing power in the real estate market

The recent RE/MAX report found out that Generation X became the strongest buying force on the Canadian market with recreational property, replacing the ageing baby boomer generation.

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 certain generation depends on all the various political and cultural attributes of the time that influenced the upbringing of members of that generation. While baby boomers (those born in the period of mid 40’s late 50’s) were the most active commercial force until only a few years ago, most of them have entered or are just about to enter retirement.

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 situation to buy recreational property at almost any price.
You will see this change particularly when we compare the results of the first half of this year with the ones from last year. Waterfront cottages, resort condos and all other kinds of recreational property products are now really popular among thirty-something buyers. This has been reported by 74 percent of markets surveyed this year. This compares with only 40 percent in 2008. Out of all the surveyed markets with recreational property, two thirds reported a decrease in the number of units sold in the period from January till April 2009. But now, since the start of the new cottage season, many major centres are now reporting an intensive buyer activity.

The most important points of the report:

While the general supply seems to be adequate in most markets, the most limited inventory levels are what concerns entry-level products (18 percent of markets report this), as most of the buyer activity was taking place in the lower-end. Younger buyers with families are now buying properties from older cottage owners, who in many cases own their properties outright. Many 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 in most cases disappeared. One of the known factors in the marketplace is pent-up demand. For example some buyers who had intended to buy recreational properties in the second half of 2008 decided to defer the transaction till the next year. Older Canadians continue to seek secondary homes in warmer parts of the U.S. such as Florida, Arizona, California, and Nevada. Buyers from the X Generation are now mainly ready to spend their hard-earned cash on vacation homes. But at the end of the whole transaction, they want to be sure they've gotten the best possible result out of it.