The Boomers are coming!
The Boomers are coming!
By Howard Spiva
The housing market slow down has many people worried. Is this bad news the truth or just confusion based on misinformation?
Is the sky falling? No way, not in Savannah! Like in the fable, Chicken Little, people hear bad reports and panic. The news and rumors in turn, affects behavior; they hesitate to spend money.
The fear and resultant hesitation in spending has a trickle down negative impact on our economy. Mostly it is the spreading of this bad news and predictions of a bad economy which contributes to it coming true - a self-fulfilling prophecy.
Of course, the market and economy are affected by mortgage interest rates increasing. This results in folks with adjustable rates having higher payments. Then mortgage lenders become tougher and do not approve as many loans. However, in my humble opinion, the pull back in the housing market is caused more by the media’s continual news of doom and gloom and the consumer’s reaction to hearing it than by the reality of the market.
Why do many people often act as sheep and only buy in up times, panic, and sell in low times? Today’s real estate market is like the stock market; it is immediately effected by rumors and the media’s continual bad news. It makes people panic and make bad decisions.
There is no reason to panic or to get hysterical -economic disaster is not imminent. The sky is not falling. Yes, housing sales are down. But the market goes up and the market goes down; it always has and it always will. The simple laws of supply and demand apply. A wise investor rides it out.
Don’t be a part of the problem. Please don’t let anyone make you into a Chicken Little. Together we can refuse to spread the exaggerated bad news. Everything will be just fine. Here is a hint “buy low ~ sell high.”
Every part of the real estate market will eventually correct itself. For us in the Coastal Empire, we are lucky and the market is already improving. Mortgage interest rates are now the lowest since 2005. Savannah and the coastal Georgia areas the market is correcting itself with the migration and arrival of the Baby Boomers. As that happens, properties will continue to appreciate and prices will rise.
Who are these Boomers? From Tom Cruise, Michael Jordon, Oprah, Bill Gates, and Donald Trump, they are our United States economy. They have the money. The Baby Boomers are everyone born between 1946 and 1964. They are the largest population group in the United States - ever. In 2007, they are ages 43 to 61. Starting in 2007, three hundred and thirty of them turned age 60 every hour.
Here is some interesting data from a study by the National Association of Realtors on Baby Boomers and Real Estate:
· Boomers own more homes than any other age group.
· Eight out of ten own their own home.
· One out of 4 own more than one property, this includes 2nd homes, rentals and vacation properties.
· Boomers own 57% of all vacation homes and 58% of all rental properties in the USA.
· Surveys indicate that Boomers are in their peak earning years and they are optimistic about the future.
· Many Boomers plan to sell their homes, take the money tax free (under 121 capital gains tax exclusion), and then convert their vacation home to their residence for a nest egg and additional future tax free money. (Guess where many of these folks like to own vacation homes? On our coast! The Coastal Empire is set to have the largest influx of Boomers over any other part of the country).
· Twenty five percent aren’t satisfied with their current home as a retirement location and plan to move within the next five years (Maybe some place with a nice climate?).
· Forty three percent of Boomers feel that they are already financially comfortable but most have the desire and need to keep working (thus contributing to the economy and work force wherever they move).
· Access to “health care” is more important to Boomers than being near golf courses (We have three nationally ranked hospitals in Savannah and over twenty within a 100 mile radius. Think that may help them in their decision to move here?).
· Boomers plan to invest a major part of their retirement money in real estate. (Savannah’s real estate prices are lower than most areas of the country.)
The Boomers are an active group. They are not content to sit in rocking chairs. According to Retirement Living Magazine, most Boomers consider retirement to be a midlife event.
Americans are living longer and quitting work earlier. That will mean decades of retirement time. In their retirement, most boomers plan to participate in activities from yoga and golf to college classes. Savannah area has 60 golf courses and 14 colleges and universities. The Coastal Empire is positioned and waiting on them!
Baby Boomers are seeking retirement destinations that offer culture and sports and active lifestyles. When they want to go swimming, boating, fishing, crabbing, and kayaking, Savannah will be ready with our 420 miles of navigable waters, ocean, and beach.
Yes, baby boomers are the type of people who will love Savannah’s temperate weather, which allows year round outdoor activities.
The baby boomers made pet rocks, cell phones, personal computers, the stock market and the Internet, all successful. The boomers will do the same for Savannah.
Today there are 78 million Boomers and they have 70% of America’s net worth and wealth; and they are coming.
Even birds know which direction to fly when they retire every winter; I mean nobody retires and moves north! Except maybe people in Florida.
Starting by 2010 and for the next 20 years, until 2030, the boomers will populate our six coastal counties and the boarding four inland counties, raising our population by 50% to over 840,000 people. This is according to a Georgia Tech report commissioned by the Coastal Georgia Regional Development Center.
In 2030, it is estimated by the US census that there will still be 57.8 million boomers alive. That year the boomers ages will be between ages 66 and 84. In 2031, all surviving boomers will be over age 65.
The influence and powerful spending power of the baby boomers is often illustrated by many popular publications and online forums dedicated exclusively to boomers; some of which are dedicated to specific issues that the boomers generation currently face and will eventually face in the future.
Savannah has:
· Great restaurants
· The second largest historic district in the US
· Wonderful architecture
· Art galleries
· 14 Colleges and Universities
· A world renowned art museum
· Manufacturing
· Growing port
· International airport
· Amtrak train line
· Access to interstates
· A strong economy
· Military bases
· Golf
· Beaches
· Rivers
· Movie Festivals
· Music Festivals
· Tourism
· No Snow
As everyone knows, real estate is about location, location, location. Savannah and the Coastal Empire has plenty of all three!
Make it a great day!
Howard Spiva is a Savannah personal injury trial lawyer (www.spivalaw.com). He is a real estate broker, investor and professional seminar speaker. He is certified for Instructing continuing education classes by the Georgia Real Estate Board. Howard is also the host of The “NEVER SETTLE FOR LESS” Show on WTKS 1290 am Radio. (www.neversettleforless.net). NSL is a motivational and self-improvement “call in” talk show, where the topics are intended to make you ...healthy, wealthy and wise.