Despite national reports citing real estate frenzy is approaching freezing, there is a rising demographic that will continue to heat the market: Baby Boomers. As they continue their quest for the ideal vacation or retirement home, analysts suspect that it is capital-rich group of retirees will keep the momentum in the market at a steady pace.
historical components past 50 years has helped to shape the profile of Baby Boomer. Absorbent examples of their parents, who experienced a narrowing economic depression and rationing of World War II, boomers have traditionally been conservative spenders. Snapping up real estate, flipping properties and shops to the house at the time when the Boomers were having their children in the late 60's and early 70's was not common. Everything is changing Red Hot economy in the mid 90's. Riding a wave of rising economy, conservative spenders quickly became savvy investors. Although the sizzling stock market burned to the dot-com bust of the late 90's, low interest rates combined with amendments to tax laws spurred the housing boom in early 2000s. For children exiting college and retirement on the horizon, Boomers redirected their investments in real estate.
A new study shows that the number of second homes purchased between 2000 - 2004 has almost doubled. The value of homes doubled as well, with the average home rising 55% during these 4 years. Keunwon Chung, a statistical economist, National Association of Realtors, says Baby Boomers, especially those with incomes above the average in the first row are motivating other domestic markets. Chung said one reason these boomers are snapping up houses is to diversify your financial portfolio. Another reason is that the position for their golden years. Tax friendly retirement states such as Florida, Arizona, Nevada and has witnessed explosive growth in both home construction and appreciation. Florida experienced 25% increase in house prices last year, with one in five of those homes purchased as a second home or investment property. Nevada home prices have risen 17%, with comparable rates being bought as investments in nekretnine.US Census Bureau expects this rate constant to continue and predicts second home purchases by baby boomers will reach 6.4 million units by 2010.
Most Baby Boomers are looking for luxury in their second home purchase. According to the survey, Coldwell Banker, the Boomer generation "... wants luxurious homes and wants to stay active." Neil Howe, author and expert on generational theory, confirms that states, "Boomers want to live somewhere where they can remain active. They want to be close to cultural and spiritual hub that connected them with the community and culture." And this generation can not afford their desires. From the accumulation of wealth through the stock market, home equity, and inheritance, along with earning work during retirement years, boomers have more money than any previous generation of retirees. Research from Harvard, NAR and NAHB all agree that the boomers will likely use its cash resources and home equity to purchase multiple residences that focus on the prime location and amenities. While housing has traditionally filled this requirement, a growing number of boomers are now turning to Condo Hotels, Condotels, and various other resort style living options.
Condo hotels appeal to boomers because of the market for luxury and location, the two main ideas of these boomers are looking to maintain your dynamic lifestyle. "Why buy a condo in the city that is blank for you when you can own a hotel suite, with up to five stars, which are available to them, be centrally located in the top holiday destination, and receive rental income?" says Steven Roszell, owner and CondoHotels.com HotelsForSale.com.Najam condos, provided that the hotel management company, when the condo is unoccupied, is another major attraction of condo hotels for Boomers. Bob Waun, vacations, finance.com, says that while Boomers desire resort style living and luxury amenities, not all boomers can afford. Waun says, "Less than 20 million (26.5%) in the U.S. boomers will be rich enough to afford whole ownership second home without rental income." However, because of the potential rent, condo hotels offer "subsidized luxury to be a growing choice among savvy Boomers." Waun also believes clean Boomer demand will motivate the condo hotel market. He says, "If only 1% of this generation demands condo hotel as a second home option, 1.45 million units will be required. It 96,000 condo [hotel units] a year, every year ...." for the next fifteen years that boomers will be retiring. Given that currently the U.S. has only a few markets for Condo Hotel Resorts, it is likely that the demand will replace the bid.
78 million Baby Boomers retiring over the span of the next 15 years will undoubtedly affect the real estate market. With the oldest boomers turning 60 this year, the Realtors are getting reading to accommodate their request. "We will see a big market cycles in the suites on the market," says Roszell, "and CondoHotels.com is ready for it." Although explosive recognition and development is not expected, analysts agree that the boomers will help maintain the dynamic real estate market.
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