Further to yesterday's blog post about downsizing, a related theme to that is the theme of deleveraging. Given the economic impact and hardships being created by Covid-19, it is likely that some homeowners are re-evaluating their financial situation. Some homeowners who bought in recent years may have overextended themselves in terms of how much money they borrowed (i.e. taking on big mortgages) to get into the Vancouver area housing market. As such, I believe that we may be on the dawn of a new era in the Metro Vancouver real estate market: deleveraging.
It may be the case that once we come out of this pandemic, that there will be overextended and financially vulnerable homeowners that will be looking to reduce their debt load. This may mean selling their existing home to downsize or rightsize into a property or house that is more affordable for them. It may be the case that we see some people sell out of their relatively expensive homes in the core cities of Metro Vancouver and head East to relatively more affordable markets.
Indeed, it might make sense for someone to cash out of say Vancouver, Richmond or Burnaby and buy a more affordable home in nearby Surrey or Langley. In fact, they might be able to secure a bigger, better and newer home, for less money. Whatever price difference they can save in the move, could be pocketed and maintained as liquid cash in the bank or used for other financial investments. This liquidity could help fund lifestyle expenses or a more comfortable retirement. This scenario is one that I think an increasing number of people will be looking at and considering in the months and years ahead. In a future blog post, I will also talk about yet another potential advantage of making this move to the Fraser Valley from the Vancouver area proper; social distancing.
If you are weighing your options around cashing out of a market like Vancouver, Burnaby or Richmond and moving to the Fraser Valley, please get in touch with me. I can outline many of the housing options available in places like Surrey, Langley and Abbostford. This could include a detached house, townhouse or apartment condo.
Sometimes, there is an inertia in leaving your existing home. But it could mean a far more financially secure and comfortable lifestyle, if you can reduce your debt load and/or have more liquid cash in the bank. I may be able to help you out with this.