Wednesday, April 04, 2007

New Trend?

I'm seeing a new trend amoung those that retire from my company and I thought it was interesting. The trend is to send their kids out of state to where they can afford to buy (ok, not a new trend). But what is new is that families are coordinating their moves in such a way that multigenerational moves are being planned as a package!

Multiple of my coworkers were discussing this today. Its not something I had heard much about. Ok, I've heard of a son or daughter moving out of state and then parents following to see the grandkids a few years later. But this time, its part of a planned muti-household move all within 2007!

The pattern is all the same. The adult kids pick a city where they have good employment prospects; the soon to be grandparents anounce their retirement and buy a large property on the outskirts of that affordable city. In all cases the oldest generation is buying a nice size lot (say 5 acres) near a lake and so far invariably in horse country. Due to the huge California home sale windfalls, the grandparents make out like a bandit (offen $1M+) and are retiring 5 to 10 years earlier than plan. Ponnies are being bought (for grandkids) as well as boats, RV's, and other "toys" for the grandparents to spoil the grandkids with.

As best I can tell, this one of two reasons my company is being hit with a rash of early retirements. (Cashing out). Reason #2 is a pension change that is relatively minor but has freaked out some old timers.

Before, people were retiring where they felt like it and flying the grandkids to them. Again, its the multifamily coordinated moves that I find interesting and new. (Usually both sets of grandparents and siblings too!)

One move is 5 families together. (Two sets of grandparents and three sets of adult children all pursuing a higher standard of living. Its resulting in three homes for sale in California (one sold, one pending, one on the market) and five being purchased in the new location. One additional set of grandparents is on the fence, but will probably move in a year or two (if they can afford to then).

Another move is just two families with a sibling promising to move in the Fall.

Another case has the grandparent finally winning a battle to pressure the adult kids to move out of state (so they can stop subsidizing their adult kids). Both sets of grandparents are preparing their homes for sale to follow. Another sibling might or might not follow.

Are you seeing anything similar? Did I miss this last year? (It is the right season to begin hearing about this for school break moves.)

Got popcorn?
Neil

6 comments:

Westside Bubble said...

Very interesting! Given the huge difference in prices, I can see why. A college student we know says that a lot of kids from her high school class in Santa Clarita are moving to places like North Carolina. (BTW, you really don't want to commute from Santa Clarita to LAX!)

I just found you (via you comments on Bubble Tracking Graphs). Great to see another Westside-South Bay blogger!

And a useful hint, cleaner than tiny urls. Type in links like this (substitute "<" and ">" for "[" and "]"):

Here is [a href="http://westside-bubble.blogspot.com"]Westside Bubble[/a].

becomes

Here is Westside Bubble.

Anonymous said...

I'm from Redondo Beach originally, I noticed when I went to my ten year high school reunion that a lot of people had moved to other states. My grandmother sold her house in North Redondo for $250K ten years ago and moved to a retirement village in Torrance - I didn't get a pony! P.S. her old house was recently listed for sale at $769K - I guess you never can go home again.

TJ & The Bear said...

The first ones out will make out like bandits, that's for certain. Those holding on to cash out later may find that there's no cash available later.

Once it's clear to people that prices are going nowhere but down for the foreseeable future, I expect the cash out trend to accelerate... further exacerbating the crash.

That's okay... you & your friends are ready to step in and buy those $1M digs for $800K in a year or so, right??? ;-)

wannabuy said...


Once it's clear to people that prices are going nowhere but down for the foreseeable future, I expect the cash out trend to accelerate... further exacerbating the crash.

Good point. You don't know how many coworkers are nervous about their home value as retirement approaches.

you & your friends are ready to step in and buy those $1M digs for $800K in a year or so, right??? ;-)

$800k? I'm cheaper than that! ;) Seriously, once this market really starts to lose value retirees will panic and list their home to sell. Too many have a poor retirement without the home equity extraction. (And we have an OK pension and a great 401k plan!).

Westside, I'll take your advice on urls. Welcome!

March was interesting. April will be a faster March. May...

We'll... the month of my wedding should be interesting. Let's put it this way, the month of the "fire horse" in the year of the "fire pig" is supposed to be a great month for relationships. But for some reason, its also supposed to be a bad month for unrest and business... hmmm...

Got popcorn?
Neil

Anonymous said...

I'm giving SoCal two to three years. If prices haven't CRASHED, we will be moving out of state. I will stop at the state line and take a dump.

wannabuy said...

I'm giving SoCal two to three years. If prices haven't CRASHED, we will be moving out of state.

Some of my friends said that three years ago. Now they are acting on it. :( Everyone has their own timeline.

Got popcorn?
Neil