Ease in Second Home Market Likely to be Only Temporary
The following text is part of a larger article titled “Will Boomers Retire Like Their Parents Did?” by Ralph Smith and published in its entirety at:
The key excerpt is about the future real estate investments that will likely be made by baby boomers who are retiring in large numbers from federal government jobs. While the rest of the article may not interest you much the following portion likely will:
Boomers have changed society. Not necessarily by design but by large numbers. The crush in elementary school continued through college. The real estate market boomed and prices exploded as boomers reached an age for getting married and buying a house. Unemployment was relatively high for a number of years and getting a job was a challenge with the competition from the multiple millions of the same age.Why should retirement be different? One of the biggest markets in real estate now is the second home market. Anyone who reads any news knows there is currently a real estate slump. Chances are, it won’t last and areas which are highly desirable for retirees are likely to find growing crowds as more of the boomers head for retirement.Boomers are already buying second homes at a younger age than their parents did and they visit the second homes more frequently than their parents. According to the National Association of Realtors, 7 percent of baby boomers already own a vacation home. That number may go as high as 20 percent in a decade. With real estate prices currently lower than they have been, watch for the explosion as the boomer mentality suddenly leads to a lemming-like conclusion that now is the time to pick up that retirement home because the prices are as low as they are likely to be. The trend toward a second home is likely to be accelerated by the shortage of skilled employees and the changing technology. Many companies and agencies have doubts about telecommuting. Those doubts can be overcome by the need to hire qualified people. And, throw into the mix the availability of the internet, cell phones, Federal Express service and the ever present Blackberry, and there may be a marriage of convenience for everyone. It may be that a good engineer, consultant, writer or analyst may be able to stare out at the ocean from a beach front condo while continuing to work part-time and bring in some extra money.And, with a large concentration of federal employees in metropolitan areas like Washington, DC, Houston, San Francisco and Atlanta, many federal employees have accumulated a large nest egg in a home that has become very expensive. Why not sell it and move to the mountains or the beach or a small town with a house you can buy for cash with more amenities and lower property taxes?Many boomers will opt for these alternatives because they can do it and because employers will need their services.In short, OPM may be right that a “retirement tsunami” is coming. But it may not be as sudden or as bad as many fear. We are living in a time of cultural and technological change that opens new alternatives. The generation that saw the rise of communes and the crowning of the VW Beetle as the “hot car” of a decade, may not be adverse to spending a few months–or the rest of their lives–surrounded by the sounds of ocean waves or wind in the pine trees. Of course, having lived through the boomer tsunami, we can also reasonably expect the sounds of nature will also be punctuated by the sounds of millions of people all havng the same idea at about the same time.
You can beat the rush! There is a real opportunity presently available for buying prime second homes in the Smoky Mountains at prices more attractive than those of a year ago. Although prices won’t likely move up immediately the long term forecast does look extremely favorable. If you’ve been considering a second home purchase now is a great time to be a buyer! Please contact us for some excellent properties you may wish to consider.