If you’re a mother-in-law, don’t read this. You’re the enemy. Or a helicopter father. Buzz off. The last people who should be giving financial advice are Boomers.
This blog posting may be my last. I expect to be beaten to death with soggy Depends on the way to the Hummer outside my Toronto office Wednesday morning. Some will seek to finish me off with half-sucked oxygen canisters, while others aim the pointy ends of their walkers at my orifices. Fluids will flow.
But some things must be said. Most Boomers have seriously screwed up their financial lives, and seem determined to bring their adult children down with them into house-horny hell. Just in time for the official end of the Canadian real estate bubble – that giant gush from the throbbing property gasbag – rivers of bad advice are flowing through the lives of their offspring. Call it what it is. Child abuse.
Here’s Josef, in Etobicoke. After chaining his wife to an iPad cruelly bookmarked to this blog, she finally relented, and they listed the house two months ago.
“After about 4 weeks of random showings, open houses, constant questions about adding a separate entrance to the basement and zero offers, I finally got the call. By dumb luck, I got two offers in one day, which sparked a bit of a sellers edge that got us a full listing price of $540k (bought for $330k just 8 years ago). Our closing date is March 30th and we already found a rental house in Oakville. My wife couldn’t be happier, as it is a much nicer area to raise our kids with endless parks and walking trails.”
Isn’t that beautiful? They get a nicer house, with the $525,000 cleared from the sale generating enough cash flow to pay the $2,250 monthly rent. Live for free. No property tax. No debt. No stuff to fix. No exposure to a wobbly market. Freedom, mobility – and half a million in the bank. All the stuff Boomer parents apparently hate.
“They practically disowned me for making such a `stupid` decision and `ruining the future of my kids`; can’t help to laugh at that. Just to feed your twisted humour Garth, these are some of the quotes from my dad. Feel free to use them, I’m sure he won’t mind. “You will end up with no money and no house in few years”, “People line up all night to buy new houses (Mississauga) for over $700k”, “I’ll buy your house for $540k right now”, “Renting is like throwing money in the dirt”, and my favourite (can’t believe he actually used that), “Canada is different…”. Needless to say, I stopped arguing with him.”
I wish these were the rantings of a single demented father. But it seems real estate DNA was somehow smuggled into the toke pipes and reefers of an entire generation.
Phil in Edmonton tells me that he and Barb were ecstatic when, after six months and 47 showings, they finally got an offer on their townhouse. “Then she mentioned to her mom (damn MIL’s), about about our plan to sit out of the housing market and invest our $250,000 for a few years until prices come back to earth.”
And what happened, Phil?
“Her mom lost it on her.”
And Janine in Calgary (with her new husband) just doesn’t want to buy a house, especially since she’s exiting med school with $234,000 in student debt. “Until I found your pathetic blog it seemed so wrong to be flying in the face of conventional wisdom by not buying a house, especially when all of our peers are buying and all my husband’s relatives were telling us to.
“But I need harder numbers to throw at my in-laws when they try to convince us that Calgary prices are reasonable (“…since we have oil here, we’re different!”) and bug us incessantly that if we don’t buy now, we’ll be shut out of the market. Regardless, we’re not going to buy until prices deflate somewhat and we have 20% down, but how do I prove them wrong and deal with it, Garth?”
Janine, babe, many ways. Lose their number. Move to a real city, like Toronto. Threaten never to do surgery on them. Change your email addy. But whatever you do, don’t argue. It’s pointless. Boomers are as open to change as Syria.
Like Oliver’s mom.
“She just purchased a 400k bungalow in Oakville,” he says. “She hasn’t sold her McMansion yet (and still owes about 250k on the mortgage). Did I mention she’s 65 and retiring?
“She doesn’t seem to think there’s anything wrong with a) buying a new house before having sold the first one, or b) taking less time to decide on buying this house than she did deciding what plays she wanted to see for her yearly Mirvish Productions Theatre Package.
“Honestly, Garth, I’m frustrated. I have been reading your blog, and spreading the word, but even my mother won’t believe me.”
Of course not. Especially mom. So stop trying. Just be thankful she has not infected you. And I sure hope she has a pile of money somewhere to finance the next two and a half decades of her life – because that $400,000 bung could languish for years, costing her while paying nothing. In fact, this is the Boomer curse – house lust. It’s been known to eclipse even the feelings cougars have for Bon Jovi.
I’m here to tell you there is no cure. It will be there until the last key is pried from their cold, dead fingers. Then, ye shall be free.