Boomers and real estateAmey Stone
If you consider almost any major trend, you need look no further than the Baby Boom generation to figure out what's sparked it. The trend of note today is the huge number of second home sales that is fueling the real estate boom. According to the National Association of Realtors, more than one third of all homes sold last year were second homes -- bought either as vacation homes or investment properties (and often both, I'd guess).
Melanie Norden, a realtor writing from San Francisco, has an explanation.
"As a realtor here in San Francisco I witness demographic trends first hand everyday in our market. A significant trend now fueling purchasing of condos in new areas of density is that of recent empty-nesters in the 48-59 age group beginning to shift away from suburbs and second homes into luxury urban dwellings with walking distance conveniences and entertainment.
Boomers have witnessed their parents' difficulty with driving, and the subsequent isolating effects of such aging issues, they are shopping for new solutions for when those issues visit their generation. Desire for convenience, and ease is linked with a desire to explore City excitement and culture, empty-nesters are ready to graduate and attend national touring plays rather than school plays. Cities such as San Francisco offer condos with luxury amenities -- pools, jacuzzi, fitness rooms, within walking distance to world-class restaurants, museums, professional ball parks, shopping and services. Markets such as Phoenix represent boomers buying a test-run retirement home before quitting work all together.
Beyond the boomers are those in active retirement who enjoy easy access to amenities and conveniences that condo/hotel models offer while being in a location that's a great draw for children and grandchildren to visit; I have buyers in their 70's with this strategy."
That all makes sense. The only question is, what happens when the Boomers start to retire, sell their primary residences and settle into the second homes they are buying now? Where will that leave the real estate market?