We’ve been right where many of you are right now. You’d love to begin owning instead of renting. We struggled with the question of when the right time to buy was – and were determined to get it right. We’ll show you what is important to consider and why.
The right time to buy your Snowbird dream home is now. The conditions are great and by considering the investment by being fully informed you’ll be sure. Follow these 3 steps:
- know when you are ready to buy
- understand 2 key home market and timing measures
- think about currency exchange correctly
Buying a Snowbird property is an important purchase. You simply won’t go wrong if you consider the following and put your purchase in perspective:
AN INVESTMENT IN LIVING LIFE FULL, ACTIVE, AND ENJOYING IT!
It’s very right to think about buying your snowbird home as an investment. It is a big investment in your future. But don’t simply think in terms of money. You’d be missing the biggest return of all.
Be sure to also think about your return on your investment (ROI) in terms of the softer side of the benefits. We’ve bought and sold houses for many years and know the memories they bring are worth far more than the monetary return achieved.
HOW DO YOU KNOW WHEN YOU ARE READY TO BUY?
Some Snowbirds begin by renting and may move around from time to time. But, most are drawn to a park by a friend or group of friends that they follow.
While some love to rent, many others may be drawn into purchasing for different reasons. Perhaps the place they’ve been renting the last 2-5 years is going up for sale. Maybe they see a neighbor’s park model for sale and that prompted a purchase. Sometimes renters just come to the conclusion they would like to buy.
Others enter Snowbird life with a clear desire to own. We did. So many others see that buying is such a very small investment in their future.
WHEN MY MIND TELLS ME SO
Like many others, a few years before we joined snowbird life we had stronger and stronger feelings like being somewhere warm for much of the winter. Travel is inexpensive to and from and technology enables us, more than ever before, to stay in close touch with friends and family no matter where we are. The desire to spend our winters where we could be more active kept getting stronger and stronger in the years leading up to our decision. Our minds were emotionally ready.
WHEN MY BODY TELLS ME SO
A tee shirt we recently saw said “I Already Want to Take a Nap Tomorrow”. We enjoy keeping busy doing things we love to do and then relaxing when we want to. But the cold and snowy winter of the north complicates matters. So many want to be active and our bodies don’t do so well in cold, snowy, and slippery conditions. The realization that being healthy and active is so much safer and easier in warm climates where we can continue our summer time pursuits all winter long is a logical decision.
TWO HOUSING MARKET MEASURES – AND WHY THEY’RE SO IMPORTANT
There are two measures we’d like to introduce you to. We hope to also put them in perspective so you can use the relevant points in your decision making. The first is a measure of housing prices over time. The second is our thoughts on the seasonal variances of purchase timing.
First let’s talk briefly about home price trends and the Case-Shiller Home Price Index.
The index published by Standards and Poors / CoreLogic to monitor repeat sales house prices in the United States and has been used by realtors, mortgage firms, and governments since 1987. While the details of the information is less important we draw your attention to the upward trend of housing prices in warm winter regions and across the nation (see below).
Housing prices have consistently risen for decades and continue to. This won’t be a surprise to anyone reading this. Sure, in 2008 through 2012 was a difficult time as the Global Economic Crisis hit home prices hard for a few years but they soon rebounded and the trend continued upward. If you were planning to buy a snowbird park home and resell it a year later pay close attention to the home price index and get out your crystal ball. (We’d like to borrow that crystal ball if it works!) But if you intend to spend a few years or more living the snowbird life (as most do) recognize the upward trend of housing prices over time and rest easy with your purchase decision.
A second important measure of whether it is the right time to buy is less statistical and more practical.
You see, many that wish to sell don’t really want to. So often we hear stories of community members that, due to a life changing event, cannot continue to winter in the south. Often health and family are at the top of this list.
We’ve NEVER heard anyone ever say “we’re selling and moving back north because we miss shoveling snow!”
When many sell their park model trailer or manufactured home in a 55+ community they may be motivated to sell at different times. Be ready for micro-timing opportunities. Understanding the desired timing of their sale is most important to getting a good deal. Consider that the following:
- the seller may wish to remain in the home until Spring (if this works for you a favourable deal can surely be made)
- the seller may wish to sell before the next park pad fees are due (often paid Spring and Fall – so keep in mind that this motivation could be significant if the date is fast approaching)
- the seller may want to sell in the summer and may not be returning in the fall (perhaps offering some assistance or time in the fall for personal items to be removed by them, you, or a neighbour can be added to the offer)
- the seller may want to sell immediately (a great purchase price should be expected in this case)
- if it is now fall, the start of the snowbirding season (prices could be higher given a move in ready home allows a prospective buy to simply move in)
“Be ready for micro-timing opportunities.”
CURRENCY EXCHANGE – WHY DO SO MANY OVERANALYZE THE TOPIC?
Since 1990 the Canadian US dollar exchange rate has averaged about $0.80 Canadian dollar for every $1 US dollar. In 1995 the Star reported that “average over the last 25 years is 81.46 cents U.S.”. According to industry foreign exchange site OFX reports an average 80.53 cents U.S. between 1990-2019. Annual averages in 1998-2002 were as low as 62cents. Highs 1997-2001 were 97-101 cents. Note that CDN/USD exchange rates average about 80cents long term and the outliers (highs and lows) are infrequent.
So, what are we saying about currency exchange rates? Well, first and foremost don’t fret about it too much. For two quick reasons. First, if your around average exchange rates (as is often the case, then it shouldn’t phase you if you are a few pennies this way or that. And, more importantly, park model trailers and manufactured homes in snowbird parks often sell to Canadians. This means that the buying power of the Canadian dollar often determines the selling price. We’ve heard so often that swings in the Canada/US dollar exchange rate just swings the selling price the other way to offset.
NOTE: It often is a zero-sum game – the value of the Canadian dollar goes down so then the price goes down.
BONUS THOUGHT: WEATHER AND ITS IMPACT ON PURCHASES
Weather can have an interesting impact on Snowbird home sales. When it is very cold in the northern US and in Canada sales can spike upward. Sometimes warmer temperatures in the Snowbird regions of the US and Mexico spark increased interest. AZCentral, a part of the USA Today network linked warming weather in the South to rising number of Snowbirds.
You may want to avoid the rush!
CONCLUSION
We’ve all seen home and currency markets come and go. We’ve seen ups and downs. Dollar cost averaging, market timing, and indexed investing are concepts that are debated in investment circles. There’s no value in doing that here.
But remember that time you bought your first house? Perhaps newly married you needed somewhere to start a family. You searched the market and found something you could afford in a neighbourhood you loved. Buying your Snowbird life home is much the same. Find that great park, make good friends, buy what you can afford, and begin your warm winter life in the park model or manufactured home of your choosing. Don’t get all hung up on timing the housing market and exchange rate. Just buy the place and come and join us!