Episode 30:

Wealth & Real Estate: Empty Nesting & Downsizing Homes

Keith: Welcome to the Empowered Investor. My name is Keith Matthews and I’m joined by my co-host Marcelo Taboada. Marcelo, how are you today?

Marcelo: Keith, I’m great. I’m super excited for today’s episode. I cannot wait for what we have in store for us.

Keith: Likewise. This is episode two of Wealth and Real Estate. So what do we have in store for our listeners today?

Marcelo: So today we’re talking about a huge part of the market: people who are trying to downsize. As last episode, we explored how tough it is for new buyers. And right now we’re looking at the other side of the equation, which is people who have accumulated this huge amount of wealth in their primary homes. And they’re now in the stage of their life where they are thinking about downsizing. And this is huge because this has financial implications for people, but it also has emotional attachments. People have memories in their homes, and it’s usually the primary source of family gatherings and things like this. There’s a lot of moving parts, so I cannot wait for this episode. I think a lot of people will relate to what we’re going to talk about today.

Keith: Yeah, you are so right, Marcelo. It is an emotional time. And I think back over the years as an advisor in conversations with clients, we used to have these discussions around, you know what? I want to move. I want to downsize. I’ve got too much home. Too many rooms. My kids are gone. Ironically, we used to hear that often. We haven’t heard it a lot in the last 12 months during the pandemic. I think people are more willing to say, I’m not going anywhere, but it is a massive topic. It is a massive topic and it’s important.

Marcelo: So those are great points. Tell me more about the people we have today for the show.

Keith: We have Libby and Mark Brody. These are two extremely experienced real estate professionals. Libby got into the business 30-35 years ago, essentially having four young kids, thinking about university costs. And I think she said, okay, I’m going to go out and work in real estate, sell homes. She became so passionate about it and moved on to develop one of Canada’s biggest and best teams in residential real estate, Team Brody. Team Brody is ranked as one of the top 1 percent at Royal LePage in terms of transactions volumes, and her heart is really in working with downsizers and individuals who have raised their families and are now looking to sell. Mark is the young blood in the team now, joined the team 10 years ago, and is heavily involved in managing the business communications and spearheading the voice on social media for this team. What’s interesting about teams like this is they go to these national conferences and they learn from all sorts of different agents across the country about different regions and different trends and different issues. So we’re so fortunate to have them as guests today and in particular on this subject of downsizing.

Marcelo: Absolutely. I think people will appreciate hearing from somebody with so many years of experience and how tough it is to remain consistent in a market like real estate. So yeah, super excited.

Keith: You’re so right. So let’s jump right into the interview. Enjoy. Welcome Libby and Mark Brody to the Empowered Investor Podcast.

Libby: Thank you. Very nice of you to invite us.

Mark: Pleasure to be here.

Keith: Listen, guys, today is going to be a great show. Specifically, we are talking about downsizing. So this is the second part of a three-part real estate series, and we’re going to spend this whole time talking about downsizing and what that means and what are the pressure points and what are the issues that people need to think about. So thank you both so much for being on today’s show. And let’s start with giving us a definition of the two main types of downsizers that you see in the marketplace.

Libby: Okay, the two types are what we call the empty nesters, which is people who are still relatively young, their kids have now left home, and they’ve got empty bedrooms, and they feel the need to downsize to something a little bit smaller where they are not needing all that extra space in their homes.

Mark: They tend to be the sort of 50 to 70 age group, give or take.

Libby: And then the second category of downsizers would be your older seniors who would be more in the 70 plus age group who would now be looking to downsize to something more manageable, either a condo or an apartment, and then even into the 80 plus year old where they even looking at senior residences. So these are the two distinct types of downsizers.

Keith: That’s great. And I guess I would probably fit into that first category. I’m 57 and my kids are all in university. But my wife and I figured we’re going to keep our house at least another five to seven years. She wants the nest to be there when they come back from school and they want their dinners on a Sunday night.

Libby: I’ve been through that myself, and I will mention I’m actually in the second category now. I’m in the 70 plus age group who is looking to downsize, but I went through the stage that you’re now facing. And I found that when my kids left home, they tended to come back. They would come back between traveling and living elsewhere. My daughter especially would come back between boyfriends that she moved in with. She’s going to kill me for mentioning that. And also after leaving university, where they were out of town, they would come home, then they would leave again, but they would come back again. And I found that they only permanently left home when they had their own house.

Mark: Once they settled down, they got married and settled down.

Keith: Tell me about it. I have my son who just got back from Queens, and he thinks that it’s normal to have three meals a day in front of the TV. And I’m like, this ain’t going to work here. All right. So listen, let’s jump into it. We have a lot of listeners, and I would assume that those that are in this either empty nesting or senior category are sitting on top of sort of prime real estate right now. They tend to be the bigger homes. They tend to be the homes that just about everybody wants right now. They’re seeing their prices go up, but obviously there’s some challenges in this because depending on what they might wish to move to, you’ve got to get both parts of that equation.

Mark: Yes, absolutely. We work right in this suburban market in the West Island of Montreal. So you’re absolutely right, Keith. These type of homes are high in demand. There’s a lot of young families looking to get into these bigger homes where they can grow and raise their families. But the sort of 50 plus crowd, if you want to call it, is very reluctant to leave. They’ve got it good right now, and they see no motivation to go out there and find something else. And like Libby is going to talk about in a few moments, that is one of their biggest fears is where am I going to go? And what’s that going to look like? And it’s very hard to imagine a downsize from let’s say a 2,500 to a 3,000 square foot home to something much smaller and in probably a much lesser or poorer location than they’re used to.

Keith: So we’re going to circle back to that exact topic. But before we go there, I’d like to ask you guys a few questions. Why traditionally have folks considered downsizing? What are the main advantages to the concept of downsizing?

Libby: Okay, I will mention that this has been going on for a long time. People have traditionally looked to downsize. There are many reasons, but the main ones are to reduce the maintenance and the financial upkeep of a home, to reduce the effort required to maintain a property. This is especially true as one gets older. And in many instances with older seniors, they’ve lost a spouse along the way who would have been very involved in the maintenance and the upkeep of a residence. In some instances, it’s to do with increasing the equity or the capital into their pockets to enjoy their retirement lifestyle that they may be looking for, traveling or something different, or maybe they have a need for the equity from their home for a retirement residence or medical expenses. So there are different reasons for people.

Keith: That’s really well said, Libby. When I see clients or individuals talk about this, often you hear things like, I just need to simplify my life. I’m tired of doing all sort of the complex maintenance that’s being required on my property, and I want to simplify it. And ultimately, for years we used to hear people say, I’m ready to move across the country. I’m ready to move from the suburb to maybe go downtown. Now, I know that’s probably not what people are maybe thinking of today, but it’s almost the reverse. You had a point you wanted to raise, Libby.

Libby: I just wanted to mention that I’m in the situation myself of having lost my husband and now having to manage the maintenance on my house, which he used to do all the leaf raking and be involved in a lot of the maintenance of the property and the garden, and now I have to hire people to do everything. So this again is another reason why I’m looking to downsize so that I don’t have that burden anymore.

Mark: It’s just interesting too because you are one of these people who’s gone through stage one of the downsize as an empty nester once the kids had left home, and now you’re going into the phase two. Not everybody does this. Some people wait until phase two. Some people don’t even downsize at all. They just wait until the very end, never leave their big home. But what were the reasons that you decided on the first downsizing? What were some of those key motivators for you?

Libby: Actually, that was quite interesting because after my kids had all finally left home, we had the two-story four-bedroom, and I took over one of the bedrooms as my office. But then I found I was constantly running up and down stairs to my office, back down, up and down the stairs all the time. And I was getting very fed up with running up and down the stairs. We were thinking about moving to a bungalow, a detached bungalow. But most of the bungalows on the market were what we call starter bungalows, which are the very small three-bedroom bungalows with a single car garage, whereas we had a 2,300 square foot home with a two-car garage. So for us, that was not going to work, moving to a small starter bungalow. But then I was called in to go and look at a house by a lady who was looking to sell. And I went and visited this bungalow that she was wanting to sell. And I literally walked in the front door and stood in the hallway and said, oh my goodness, this is exactly what I’m looking for. She had a beautiful, what I call executive bungalow, two-car garage, three bedrooms, but two full bathrooms. There was an en suite bathroom, which we’ve been used to, and perfect space. It was the same square footage of my house that I was leaving but all on one level. And it still had a back garden but a small one, just a very small backyard, very manageable but very private, and perfect for our needs at the time. So really it was luck that I just happened to walk into this place that suited us perfectly. And I moved there with my husband.

Keith: I know the home that you moved into, Libby, and it’s a beautiful spot, beautiful home. I think the reality of these moves, there aren’t enough of those homes.

Libby: Absolutely not. Because I have a number of friends who would love to find a place like mine, but they’re far between.

Keith: Yeah, exactly. And we’ll talk a little bit about that at the end of the show, the supply issue.

Libby: I had to talk to builders suggesting, why don’t they build more homes like mine? And they’ve always come back and told me that it’s a question of dollars per square foot. They get more bang for their bucks out of building a row of townhouses or an apartment building than to build single detached bungalows. The other thing though, there is in Ontario a concept which has not arrived in Quebec, sadly, and that is a community of attached bungalows, mostly perfect for seniors who are in that first stage of downsizing. The 50 plus age group. They have these in Ontario. I’ve been to visit such a community in Brockville actually, but they don’t have them here in Quebec and I wish they would build them.

Keith: I want you to park that on reserve for a sec, Libby and Mark, because we’re going to visit this topic at the end of the show, like what kind of real estate is needed in this country to help solve the supply issue. The question I have for both you guys right now would be, given the craziness of the current market, the sheer volume of bidding that’s going on per property, what are the trends? What are you guys seeing with regards to the downsizing market? What are the big issues? What are the big issues at stake here?

Mark: I think we find that with almost all the downsizers, the biggest question and the biggest fear they have, like I touched on earlier, is where will I go? And that hasn’t changed. It’s been the same concern since Libby started in the business 30 years ago. But as for pricing, it has serious implications whether or not someone is moving to another purchase, right? If they want to downsize and they want to go to this bungalow or another condo in some cases, then what we’re finding is the money that they’re going to get out of the sale of their big house isn’t much more than what they’re going to need to pay for the new property. So it’s really not a big cash out, if you will. And they’re often doing a lateral move in terms of their budget. And if they’re going to a senior residence, if you’ve seen the yearly annual expenses for especially a decent senior residence where the quality of living is somewhat high, it’s absolutely mind-boggling how much these things cost a year. So if you budget, hey, how long am I going to be alive in this place? And how many more years do I have to budget for this? You’re not getting a lot of retirement equity out of that house that you’re selling. So those are definite fears. And it definitely comes into play as to why people are hesitant to sell the big house.

Keith: Are you seeing that in the marketplace when you work with potential sellers, them saying, you know what, after I’ve done all my research, it doesn’t look like there’s great options for me. So I’m going to stay put. Are you seeing that happen?

Libby: I’ve been seeing that happening for a while actually, because I have quite a few clients and friends who have been thinking of doing this downsized move for a number of years but are waiting to figure out where they’re going to go. And they haven’t found the right place. So they’re still sitting on the fence.

Mark: So that’s like I said, probably the biggest concern is where am I going to go? And what is that going to look like? But number two, even the ones who get an idea of, okay, I’m ready for this psychologically. I know I need a smaller space. Like you said, Keith, I need to simplify my life. The second stage of the fear and the challenges is what am I going to do with all my stuff?

Libby: That is daunting for most people looking to downsize. It can be absolutely incredible. Scary, overwhelming.

Mark: It can be overwhelming. So that’s a whole other psychological and emotional hurdle that we have to help people with.

Keith: All right, guys, it’s a perfect segue into your recommendations, your best recommendations and suggestions for those individuals considering downsizing. What are the recommendations?

Libby: The most important thing is to plan ahead. They need to plan probably even years ahead of making the actual move. The first part of the planning is, as we’ve mentioned, trying to figure out where they want to move to and doing their research, whether it be visiting a number of different homes with their realtor to see what the options out there are, visiting different senior residences to see what each of them is like in their neighborhood, and exploring those options of where they would move to. The second thing is getting rid of all of their accumulated belongings that they are not going to move with them. What I call the junk that’s sitting in their basement probably and has been there for years. They need help with that.

Keith: And how are people doing that? I remember when my dad sold his property, and he was living on a 35,000 square foot piece of land, small home. Doing the garage sale was torture for him because he watched all his possessions that him and my mom had purchased over the years. Having to deal with garage sale buyers coming in and saying, I’ll give you 50 cents for that. I’ll give you $2 for that. And it was heartbreaking. What suggestions or recommendations do you have for folks that need to get rid of their belongings or some of their cherished items?

Mark: You touched on something very important, Keith, and that’s how emotionally attached people become to their belongings. What we sometimes refer to as their junk, right? So whether you’re in stage one of the downsize where, if you remember Libby’s experience, most of the junk she had to get rid of were the kids.

Keith: Mark, you are not junk.

Libby: I told them each to come and get their boxes of stuff. And if they didn’t come and get it, it was going in the garbage.

Mark: But phase two, it’s often stuff that’s personal. And again, maybe it’s a lost spouse that they’ve lost along the way and some of their belongings. So it’s very emotional stuff that they’re attached to, and it’s tough to get rid of. And to watch it sell for a dollar at a garage sale can be heartbreaking. So we usually recommend, and that’s why this process takes years, is that they get help in doing it. And sometimes there are services that can organize, let’s say, a garage sale. We sometimes market it as an estate sale. Even though the person’s not dead, it’s not an estate, but it’s a great way to attract those sort of garage sale buyers and really get rid of a lot of stuff when they’re not there. You don’t want the homeowner to witness this sale process or this garage sale or estate sale taking place.

Libby: There are also groups with the church that will take over doing this. I know the local churches in our area, they have groups of ladies who do these sales. We call them estate sales. They will go into the home and organize fairly good quality items that the senior doesn’t want anymore, like dinner sets and cutlery and dishes and vases, things like this. And they will hold a sale in the house organized through the church group.

Mark: And again, what we find is that we’re often a hub sort of service. So when people come to us to talk about selling their house, there’s so much more involved than just that, the selling process. There’s all this getting rid of belongings and the planning of it all. And there’s so many different resources available to people. So we’re often just connecting people with the right resources that they had no idea existed. So this is what we’re saying: plan ahead, start the decluttering and getting rid of stuff, but also you need to realize what resources are out there to help you. And in a lot of cases, you need to rely on family members. But in some of our experiences, we found where there are seniors with no family around to help, and therefore you’ve got to find someone who can be of assistance, like a trusted advisor. I’m sure you see this in your business, Keith.

Keith: Yeah, absolutely. So family’s critical for sure. What about agencies? What kind of agencies? You referred to that. Are there specific agencies that can help in that process?

Libby: There are different organizations that will be involved with taking items. It depends whether the items that you’re wanting to say get rid of, but a lot of people have things they want to sell, which have value. They maybe need to have an appraiser from an antique store tell them if there’s any value to some of these items, and they can sell them to an antique dealer. Then there are places where they can give away items such as Nova here in the West Island or we have a place called Renaissance where they will take just about anything that can have any value for recycled use. And then there are companies that will come in and completely help with the whole process, and they will literally take over. We work with one called Entourage. They charge for their services, but for somebody who needs this, they are absolutely phenomenal.

Mark: We’ve worked with seniors who are living here, and let’s say their kids or their nearest family is living in Vancouver. So there’s no one there to help, but at least the kids are involved. They’re helping to maybe pay for some of the costs of these resources, and it makes a huge difference. The other services that a lot of people don’t realize are there is there are services that help determine what’s the best fit if you’re looking at a senior’s residence. So a lot of people don’t know if I should go to this one or should I go to this one? Do I have a special care need? And there are service providers that can help you determine what’s the best senior residence for you.

Libby: So we can help people with the whole process, as Mark said, putting them in touch with the right resource depending on their need.

Keith: So I guess what I’m hearing, the overall theme is plan ahead. I know when myself or our other advisors at our firm have conversations, especially with the seniors, typically we encourage them to start thinking even five years ahead. They have to come to terms with the idea first that they may not continue to live there. And just coming to terms with that might take a few years. And then the next issue is the planning. Okay, once you’ve come to terms with it, then you need to start planning, which is what you guys were talking about, which still takes two years. Now, obviously, this is for the senior empty nesting or downsizing. The younger empty nester, the 55 to 60-year-old, that person or couple has different challenges, mostly around supply and where the heck do I move to? So Libby, do you have any other ideas about options for empty nesters?

Libby: Actually, yes. The one thing that I hadn’t mentioned, which is very much in people’s thoughts, is intergenerational or granny flat options for a senior to move in with a family member. The intergenerational would often be an accommodation for having a parent living with a younger family where they would have their own space, whether it be in the basement where they maybe even have their own kitchenette as well as their bedroom and bathroom, or maybe a room upstairs and maybe separate wing even. Ideally for senior something on the main level.

Mark: I just want to interject that I’m working with clients right now who are looking at multifamily buildings, things like duplexes, exactly for that reason, because they can’t find necessarily the intergenerational home that’s built with an in-law suite in the basement or things like that. So they’re now looking at properties that would typically be for an investor who just wants to have rental tenants, and they’re looking to occupy the upstairs and have their parents on the main floor where there’s no stair access. So again, now we’re just getting creative on how we can solve the problem of senior housing.

Libby: So the idea of what we would call a granny flat where there may be an addition to their home, which would be like almost a separate living area for the parent, or even if they have a very large property that they could even build a small single unit for a parent to live so that they would be close by. So there is definitely a lot of interest in this type of accommodation for a senior parent or parents. It’s especially acceptable to a lot of families with European backgrounds like Italians and people who are used to this type of living from where they have come, where they’re accommodating a senior parent to live with them. But this is an option that a lot of people are looking for and looking to find.

Keith: It’s a great idea. I know my dad, who’s 85 right now and has the financial means to live pretty much where he would wish to live for all sorts of reasons, he’s living at my sister’s place. And my sister has been amazing bringing him in, but it’s been a great partnership and she’s got kids and everyone’s extremely comfortable. And at the end of the day, when you think about baby boomers and that entire age group that has to sort of transition in the next 20 to 30 years, we have to get creative in these ideas. And that’s a great idea.

Libby: Yeah, for sure. And especially if there’s a parent who’s lost their spouse and they’re now alone, then this is often a very nice solution. It gives them some companionship as well.

Keith: So it’s another option. So guys, thank you so much for your policy suggestions on supply. Ultimately, it is a big issue, and we’ll be looking for some leadership and guidance, everybody from politicians to municipalities to real estate agents, and to just general citizens at large trying to figure out how to solve this supply issue. So let’s switch gears a little bit here. Let’s move into the state of the market. Is the market balanced?

Mark: Absolutely not. Far from it.

Keith: Okay. So Libby, you’ve been in the business for quite a while. First of all, what year did you sell your first home?

Libby: Oh, 1972 I think when I sold my …

Mark: No, I think he means as a real estate broker.

Keith: Oh, sorry.

Libby: 1988.

Keith: So 1988. Okay. So 33 years now. Have you ever seen a market like this?

Libby: No, never. Nothing like this. I have seen markets where there have been a shortage of listings, but nothing like this. And I have seen markets where prices have been going up, but nothing like the way they’re going up right now.

Keith: Mark, how about you?

Mark: No, I haven’t been in the business as long as Libby, but for the past 10 or 11 years that I’ve been doing this, nothing, not even close.

Keith: Libby, the fact that you’ve been so successful at doing this and you can’t see another time that it’s been this crazy is quite telling. So with regards to this specific subject that we’re discussing today, the downsizing, it’s clear that the person, the group, the family that’s selling is going to have an easy time, not so clear that they’re going to have an easy time doing part two of the equation, which is finding the next place.

Libby: Absolutely. They absolutely need to be working with a realtor for finding that next place if they’re looking to buy because otherwise, wow, good luck.

Keith: So what does the supply look like? So let’s say you’re an individual and you’re in your late fifties and you’re looking to downsize, like what in God’s name does supply look like for that couple right now? Where can they go and are they finding anything? What is the experience that you guys have seen working with that type of an individual?

Mark: In our market anyways, they’re frustrated by the lack of options. So let’s say they’re interested in a condo. Most of the condos that are being built are geared towards first-time home buyers. They tend to be smaller, and they tend to be in not the greatest locations. So that doesn’t appeal to someone downsizing as an empty nester. They want to remain in the good locations in the neighborhoods they’re used to. And they still want to have a little bit more space and they don’t want to be competing with the millennials to buy these things. And then for the seniors, again, their options are either we’re going into a senior’s residence or we’re looking for something like another bungalow to look in or a condo. And it’s just, there aren’t that many. And then for the empty nesters as well, what the condos there are out there that maybe have the size are very expensive. And like we touched on before, they’re making a lateral move. So the money they get out of selling their big home, they won’t have much left after they buy one of these more high-end condos.

Keith: So is it just a matter of waiting it out? What does it look like? So you’re 55 to 60, anywhere in Canada. Hey, your family’s grown. You’re looking for the next move. What are the options?

Mark: For those who are prepared, they have to just accept the reality of the market. They have to go for it and just downsize based on the space knowing that they’re not going to be taking out a whole lot of equity from the sale.

Libby: And again, it depends what they’re looking for. If they’re looking for, there are very few on the market. So when one comes on the market that isn’t backing on the highway that maybe is looking out on the water and is in a good location, there’s going to be a lot of activity and multiple offers and the same with houses.

Mark: It’s interesting, Keith, because Libby has two clients right now that are both considering selling their homes, and they’re interested in a condo in Pointe-Claire, and it’s near the water. And we’ve heard about this condo that will be coming up for sale. It’s an estate sale, I believe. So they’re waiting for all the transmission and the legal paperwork to get worked through before it’s available. And apparently, this broker who’s handling the sale of this condo has a waiting list, 20 people deep, waiting to get in and visit this property before it goes on the market.

Libby: So you know it’s going to be a multiple offer situation when it does hit the market.

Mark: And these are all downsizers that are going to be looking to hopefully score this one condo that’s going to be available for potentially 20 different buyers who are interested in it.

Keith: Thank you for those comments. What’s amazing to me is when I think about it, when you guys think about it, all of a sudden we’re hearing about sales with 20 offers or 10 offers. This was unheard of 10 years ago, five years ago, three years ago. Where is all this demand coming from? Is it individuals who are leaving some of Canada’s major cities and flocking to suburbs? What’s your sense?

Libby: The problem is the lack of supply. There just aren’t enough properties for sale.

Mark: Yeah, it’s hard to put our finger on it, Keith, but it definitely is an inventory problem because we literally have half as many homes for sale this year than we had even last year. And compared to the previous year, probably even less than that, 60 percent fewer homes for sale.

Libby: Supply and demand is what’s driving the crazy market.

Keith: We’re going to switch gears soon, and we’re going to talk about supply before we get there. I read in the Wall Street Journal about a week or two ago that because of the shortage of listings, and I believe that’s obviously the same in Canada, there were more real estate professionals in the United States than there were actual listings. It’s not because there’s a surge of new real estate agents. It’s because there’s just no listings in the United States. And that same phenomenon I think is even worse in Canada right now.

Mark: Yeah, you’re absolutely right. There’s a huge listing shortage, not only in this market but across Canada, just about every city.

Keith: So how do we fix that? What does that mean to you? Because you read about that all the time in the newspaper right now. There’s a variety of sort of different policy suggestions that economists and financial folks put out there with regards to things that we must do to try to cool down the housing market. But I believe that there’s a lot of individuals that also say things like those will not really generate effects that will have material longstanding positive outcomes. And the real issue is supply. So how do we fix supply? Because when you talk about it, municipalities say things like I don’t really want to change, and their citizens inside of the municipalities don’t really want to accept, and then we deal with the NIMBY, the not-in-my-backyard issue. How do we solve this?

Mark: You brought up a great point, Keith, because it’s sometimes mind-boggling when we see the contradiction in these two problems, right? On one hand, we have what could be considered a housing shortage, and on the other hand, like you pointed out, not in my backyard, you have the local residents who are absolutely against new developments in their area. I have a perfect example of it because we’re representing the sale of a new development in Pointe-Claire, which is in Montreal’s West Island suburban community. And we’re partnering with a developer called Mondev Construction. And they originally proposed to knock down this old shopping plaza that was absolutely dilapidated, vacant, all the businesses had gone out of business long ago, and it was just sitting there empty, and it was an eyesore. And the residents, when it was there, they just complained about what an eyesore this old plaza was. This developer came in, bought the land, knocked down the building, and proposed to build 24 brand new townhouses, single-family but semi-detached and attached row townhouses. And the residents around there absolutely rejected it. And they went to the city council meetings, and they complained, and they picketed, and they signed petitions, and they forced the developer to go back and resubmit new plans to change from 24 townhouses to 12 single-family detached homes. Now under the townhouse proposal, these houses would have been a little more in line with the cost of a home in that area, let’s say $600,000 to $700,000. Now that they’ve gone from 24 to 12 detached homes, our team was brought in to partner to sell these properties. They’re starting at $1 million each, and they’re sitting on a 4,500 square foot lot with a single garage. So these are small, tiny little houses selling for far above what the average home in that area sells for. And the residents, I guess they got what they wanted, and now instead of 24 homes for young families moving into the area, we have half as many available. So what did we achieve there? Did we solve the problem?

Keith: Man, that’s a great example. How are we going to solve this? Because it would strike me that within our society, we want to have homes that the younger generation can afford to buy. We should be having homes that downsizers, and that’s what today’s show is about, the downsizers, would love to get into. And people shouldn’t necessarily feel like they have to be two hours outside of a city if they would prefer to be closer to a city. So what has to change here? Is it Canadians’ attitudes? Do we have to change our mindset and be more flexible around society or what? How does it work? What do you think?

Mark: If we’re really committed to solving this problem and creating more appropriate housing to fulfill the demand that’s out there, then yes, I think the city municipal sort of governments are going to have to be a little more willing to enforce the fact that, sorry, despite the residents’ complaints, we have to modify the landscape here and create and provide appropriate housing to fulfill this demand. Otherwise, people aren’t going to be able to afford to live here anymore, and we’re just going to continue with this scarcity market where prices continue to go up and up.

Libby: One type of housing that exists in Ontario and in other places in Canada, but not here in Quebec, that I would really like to see, because it’s the type of housing that I was actually looking at when I did my first downsize in the 55 plus age group, and that is a community of attached bungalows. And they exist in Ontario, and they’re absolutely amazing. They have these sort of 55 plus age group communities where the bungalows are all attached, not with big gardens, but there is a whole community setting within the complex. There may be even a clubhouse for activities within the group. And they don’t exist in Quebec, which I tried to push for the builders to build these types of communities 20 years ago, and they told me that they were not financially feasible because of the cost per square foot as opposed to building an apartment building or townhouses.

Keith: That’s a great point, Libby. But one of the things I would say is even in Ontario and the rest of the country, they’re still struggling with the same real estate issue. This is a national problem now. And the challenge is, it’s difficult for the younger generation to move in. It’s difficult for the empty nesters to figure out where to move to. And everybody’s talking about lack of supply. Some major changes I think have to occur. I just don’t know what they are. And it’s always great to hear your opinions on this.

Mark: Even to come back to Libby’s proposal about these, let’s say, semi-detached or attached bungalow communities geared towards seniors or people 50-60 plus, in the densely populated cities, where’s the land to build those, right? So you’re almost forced to go outside the city, where again, the seniors tend to have a little bit of reluctance to go too far out of the neighborhoods they’re used to. And even if the government was incentivizing developers and builders to build these types of communities, you’re still going to get resistance, or at least initially, to having to drive out 45 minutes outside the city to get to these communities. But I think it is a good solution, and I think the acceptance of that will eventually come. You build it, they will come, right? We all know that.

Keith: So as we wrap up the show, what would you suggest are your takeaways for the listeners with regards to the downsizing options? What are the main takeaways you want to share with the listeners?

Mark: Keith, I think if anyone out there listening is considering or just thinking about or planning ahead for a downsize, whether it’s now or in 5 to 10 years from now, the best piece of advice we can give is start planning now. The sooner you think about it, the easier it will be. And I think what we’ve found in our experience is the longer you wait, the harder it becomes, especially for seniors because the older they get, the more their health deteriorates, and the more difficult all these overwhelming challenges become for them, and the greater a burden it becomes on their other family members. So we’ve often worked with seniors who’ve waited too long, and it’s almost a grueling experience. It really makes it hard. So we often are very proud of and happy to see the ones who take our advice and who get started on the process early, who engage the right people, and who see it through to success. And so naturally, number two on that is, number one being plan ahead, and number two is get help and make sure you engage and involve others in the process. You’re not alone. You have hopefully some family members or friends around that can help you. Talk to your local realtor if you have someone you trust and can give you some advice. And like we said, we often are introducing them and plugging them into the right resources out there. And engage any type of advisors you have in your circle. So someone like you, Keith, who’s a retirement planner or a wealth advisor, these are people that could be a very valuable resource to someone considering a downsize, or your accountant or anyone like that, a professional advisor.

Keith: Those are two awesome takeaways. Those are really critical. On behalf of our listeners, Libby and Mark Brody from Team Brody, I want to thank you so much for taking the time out of your busy schedules. I know it’s very busy for you folks, and you guys were wonderful today. Thank you so much for sharing all your knowledge and your expertise with our listeners. And we wish you all the luck for 2021.

Libby: It was a pleasure.

Mark: Thank you very much, Keith.

Keith: All right, guys. Thank you so much. And to our listeners, we’ll see you at our next episode. Thanks, and see you soon.

Announcer: You’ve been listening to the Empowered Investor Podcast hosted by Keith Matthews. Please visit TMA-invest.com to subscribe to this podcast, learn more about how his firm helps Canadian investors, or to request a complimentary copy of The Empowered Investor. Investments and investing strategies should be evaluated based on your own objectives. Listeners of this podcast should use their best judgment and consult a financial expert prior to making any investment decisions based on the information found in this podcast.