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Retirees Figure into the High-End Real Estate Market
Purchase In TexasThe state of Texas seems to have its own reputation that's developed over the past few decades. When the primetime soap opera "Dallas" emerged in the 1980s, ... A baby boomer is a person born between 1945 and 1965 in the United Kingdom, the United States, Canada, or Australia. Following World War II, these countries experienced an unusual spike in birth rates, a phenomenon commonly known as the baby boom. The term is iconic and more properly capitalized as Baby Boomers.
In October of 2007, the first person designated as a Baby Boomer applied for Social Security - which means that there is soon to be an onslaught of Baby Boomers retiring in the next few years.
What does this have to do with real estate? Specifically, as persons retire, they often reconsider their real estate needs. With the so-called "empty nest," meaning a home without children, retirees typically sell their homes in order to downsize to a condo, townhouse, apartment, or retirement community.
And many retirees have invested quite a bit of funds into upgrading and maintaining their homes, especially in strong economic areas. These couples have money to put into their homes, and so that is exactly what they do, especially if they're preparing to sell their home for its equity.
Note what real estate columnist Broderick Perkins, a writer for Realty Times, had to say about Santa Clara County, California, (the heart of Silicon Valley, as it were):
"Based on closed sales, the median price of single-family detached homes and condos in Santa Clara County both rose $41,000 in February, according to the Bay Area Real Estate Market Newsletter compiled by Richard Calhoun, broker/owner of Creekside Realty in San Jose, CA.
Florida's High-End Real Estate Goes LimpOnce upon a time, the warm and sunny weather of Florida beckoned all who would hear its call. From retirees wanting the perfect environment in which to stay active, to water ... Single-family detached home prices breezed past the $700,000 mark with a $5,000 tail wind. The new record $705,000 median is almost $140,000 more than it was a year ago.
Fifty-percent of the condos that sold in February were on the market for only seven days.
The Almaden Valley area in South San Jose saw a $55,000 increase in the median price - from $855,000 in January to $910,000 February - positioning the market as the region's next million-dollar home enclave.
During the current trend, since January 2004, prices have moved up by $150,000. With two months remaining in the current period, home prices need jump only $25,000 during each of the next two months to match the $200,000 increase.
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In two months that would leave the median single-family detached home price at $755,000."
The reasons for this boom, when so many others are going bust?
Much of it has to do with the economy around this area and the population shift that followed. It was noted that in this area in particular, many retirees were cashing in on their equity and selling their homes to those with young families, as many of the schools around their homes are considered "blue ribbon." And because the retirees had no reason to keep larger homes with several bedrooms and big yards, it only made sense for them to move on after cashing in.
This factor of retirees selling their homes and shopping for more manageable living arrangements is an important one when considering the area of real estate investing. Some investors have pulled away, preferring to sink their dollars into an area of investing that's more "secure," but this may be shortsighted. There are obviously many areas of the country with desirable real estate that are still enticing to those with money to spend - including retirees from the Baby Boomer generation.
How Is Buying Property In Spain Done?One of the best places in Europe to buy a property is without a doubt, Spain. The weather is great and the lifestyle is better than most places in this region. But for those ... Having equity in their home and a reasonable amount of savings and investment means that these retirees can afford high-end condos and apartments when they are ready to trade in their family home. Luxury sells, and this generation of retirees has appreciate luxury like never before.
Investing in property for the Baby Boomer generation is largely dependant on location. For example, the relatively low property taxes - and incredibly luxurious standard of living - have made Hawaii one of the prime areas for retirees. In some areas of Oahu, condo prices are up 46% since last year. The average Oahu condo is on the market only 40 days, making it difficult for some buyers to find a decent property. The median price of condos in Oahu was $321,000 in March.
But the most telling data is the inventory. With inventory down for 10 months straight many sellers are seeing their properties appreciate very quickly, and some have even increased list prices. Hawaii real estate may be one of the only seller's markets in the country - due largely to the Baby Boomers and other retirees snapping up these properties.
"If even 1/10 of 1% of the boomers moved to Hawaii to retire, it would create a massive boom in Hawaii real estate. It's a small island state and we only have about 1700 single family homes for sale right now in Oahu, so even a few hundred buyers a year makes a massive difference in our market," says Tony Kawaguchi of ReMax Realty in Hawaii.
The retiring boomers will be changing and driving many areas of the U.S. economy and desirable areas like Hawaii are likely to see a huge influx of them over the next several years. For those looking for the next big opportunity, an investment in Hawaii real estate may be a great long term option.
Of course, marketing to this generation of retirees is no small affair. Again, they are used to luxury unlike any generation before them. Many grew up in homes with parents who lived through the Great Depression, and so may have gone through some deprivations during their childhood - an experience they don't wish to duplicate. Even in retirement, most Boomers want the best of the best when it comes to their home, they have the money to pay for it - and this is the best news for high-end real estate developers.
Paying attention to this generation and their shifting needs in the upcoming years is going to be a smart move for investors and developers alike. While many on the lower end of the real estate market struggle to avoid foreclosure, this generation is one with money in their pocket. They want a retirement home that offers them every amenity, and often will settle for nothing less.
So it is a wise investor who understands this and who shifts his or her attention - and dollars - toward the real estate investments that will continue to generate buyers as this influx of retirees continues as well.
It is time to explore our information site about Hamakua Hilo Hawaii Real Estate and Consultant Facilitator Real Estate Agent. It's now your job to take this enclosed Hamakua Hilo Hawaii Real Estate information and do something with it. Good luck and thanks for visiting.
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