I am fascinated at the effect Boomers will have on our housing market (and our job market and our economy in general). About 1 in 3 adults are Boomers. The oldest Boomers are turning 60 (at the rate of one every 11 seconds) and the youngest are turning 42. Nearly half are in their 40s so retirement isn't imminent for most Boomers.
If you've been paying attention, you've heard a lot of speculation about what Boomers plan to do in regards to their housing. It's one of my favorite past times-speculation. (You'll see me pull out my crystal ball from time to time to make my predictions. It will be fun to read them later to see how I do). There was a LOT of speculation about Boomers-primarily empty nesters- moving back down town. There was a condo-craze the last two years in down town Minneapolis. You can't shake a stick without hitting one of the new developments. They are beautiful inside and out. They have all of the latest amenities to appeal to the image-conscious Boomer. When I first heard this I thought--wait a minute. I have a very large family and all of my aunts and uncles are Boomers. All are empty nesters. None are moving downtown. The Boomers I know that migrated to the suburbs are staying put. No wonder there are so many empty condos sitting on the market in Minneapolis. A serious case of mis-calculation. Too bad those developers didn't ask me (OK, I'm kidding. Sort of.)
There are a number of Realtors gearing up to become specialists in the resort and lakeshore properties. They seriously believe that Boomers are going to be buying up these properties in droves. Today, 3 out of 4 Boomers have no investment properties. Today, 54% of Boomers say they will have trouble making ends meet once they retire. Most Boomers plan to work well past 70 years of age.
Brace yourself, here it comes, the crystal Ball
If Boomers don't see themselves having the cash flow to retire while they only own one property, things would have to drastically change for them to be able to purchase a second home. If you live in Minnesota, are a Boomer, want to retire and own one home, WHY would you buy a home in Northern Minnesota were it's COLDER!?! I can see moving to a warmer climate, but not buying a resort property for retirement. Again. looking at my little micro-cosm of the world I have one aunt and uncle that purchased a home in Arizona, two that purchased time shares. The rest might be thinking of downsizing, but likely won't move more than 15 miles away from where they are currently located (the same way our elders tend to stay put). The sale of resort properties may increase, but I predict the driving force will not be our Boomers wanting a second property for retirement.
Source: National Association of Realtors Presentation on Baby Boomers
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