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Fla.’s recent housing success? Thank baby boomers

 

NEW YORK – June 6, 2016 – Clear Capital's Home Data Index (HDI) Market Report releases recent and granular data each month. The HDI Market Report provides insights into housing price trends and other leading indices for the real estate market at the national and local levels.

Florida's markets continue to recover from the devastating lows of the housing market crash, and an increase in baby boomers provides key insight into the market's future, according to Clear Capital.

Survey results

  • Regionally, the West continues to dominate quarterly growth as it hovers around a 1.1 percent quarter-over-quarter price increase, though that's a downtick of 0.1 percent from last month. Growth rates in the South remain unchanged at 0.7 percent quarter-to-quarter growth, while Northeast and Midwest regional growth continues to lag behind the rest of the nation at 0.1 percent.
  • Nationally, quarterly market performance remains fixed at 0.6 percent with no change month-to-month.
  • The Seattle and Tampa MSAs tied for the top spot on the Highest Performing Major Metro Markets for June, each reporting a quarter-to-quarter price increase of 2.0 percent.
  • Tampa isn't the only Sunshine State metro area to make the high-performers list. It also includes Orlando (1.7 percent quarterly price growth), Jacksonville (1.7 percent quarterly price growth), and Miami (1.4 percent quarterly price growth).

The most recent quarterly growth figures for the Floridian markets fit into a longer-term pattern of growth and recovery for the state, according to Clear Capital, and each major MSA has "experienced incredible gains since the market lows of 2011, recovering at least 30 percent or more of the individual market value."

Jacksonville and Orlando home prices have increased 33 percent and 44 percent respectively; Tampa and Miami home prices have skyrocketed by almost 56 percent and 57 percent, respectively.

The baby boomer influence

Clear Capital compared Census Bureau data on baby boomer moves to the price increase from its index, calling the growth in both an "interesting phenomenon that may be contributing to the stellar price growth in the region."

The most recent data from the U.S. Census Bureau indicates that this segment of the market – homeowners aged 55 to 74 – has increased more than 2.5X the overall population of homeowners in each of the top four Florida markets since 2011. In Miami and Jacksonville, the increase in homeowners of this generation is more than 500 percent greater than the overall increase in the total population of homeowners.

"It's evident that the baby boomer demand for housing in the (price growth metro areas) is a significant contributing factor in the market's overall success," the report concludes. "In Orlando, the trend is quite similar as the ratio of baby boomer homeownership growth to overall homeownership growth is over 400 percent."

"Florida has traditionally been regarded as prime real estate by those retirees who may be looking to migrate from colder areas of the nation such as the Northeast to a warmer and sunnier alternative for their golden years," says Alex Villacorta, Ph.D., vice president of research and analytics at Clear Capital.

"As the top Floridian housing markets continue to grow and return impressive price gains – Tampa is currently reporting 12.2 percent annual price growth – it's no surprise that this generation continues to invest in real estate in the region," he adds. "The baby boomer share of homeowners is clearly on the rise here, and as more and more of this generation nears retirement age, Florida markets may be in for a boost in performance if tradition continues and retirees demand homes in the region."

© 2016 Florida Realtors®  

 

Baby boomer housing a hot market over next decade

 

NEW YORK– March 2, 2015 – Sixty-five percent of retirees say they're living in the best homes of their lives, according to a new Merrill Lynch study conducted in partnership with Age Wave.

But many retirees – free from work and family restrictions – will choose to move. The study, "Home in Retirement: More Freedom, New Choices," found that 64 percent of retirees are likely to move at least once during retirement, with 37 percent having already done so and 27 percent planning to relocate.

"How and where our nation's aging population chooses to live will have widespread implications on the way homes are designed, the resources people will need, and how communities and businesses nationwide should prepare," says Andy Sieg, head of Global Wealth and Retirement Solutions for Bank of America Merrill Lynch.

During the next decade, the number of age 65+ households in the U.S. will increase by nearly 11 million, while growth in the number of households across all other age groups will be less than 2 million. Powerful demographic forces, including the massive baby boomer generation now moving into their retirement years and increasing longevity leading to longer retirements, is driving the growth among older households.

The new research explores priorities and concerns of retirees and pre-retirees when choosing the type of homes and communities they hope to live in during retirement.

Home free in retirement

Through most people's lives, where they reside is determined in large part by work and family. However, as people enter their late-50s and 60s, they approach and begin to cross what the study calls the "Freedom Threshold," with retirement representing a gateway to unprecedented freedom to choose where to live:

  • By age 61, most people feel free to choose where they most want to live.
  • Retirees (67 percent) are more than twice as likely to say they're free to choose where they want to live compared to pre-retirees (30 percent).
  • Four out of five (81 percent) Americans age 65+ are homeowners, and among them, 72 percent have fully paid off their mortgage.

Retirees on the move: The "downsize surprise"

Retirees' top motivations for moving include being closer to family (29 percent), reducing home expenses (26 percent), and changes in health (17 percent) or marital status (12 percent):

  • Many people assume they'll downsize once retired. However, the study found that half (49 percent) of retirees didn't downsize in their last move – and, in fact, 30 percent moved into larger homes.
  • Retirees' top reasons for upsizing were to have a home large and comfortable enough for family members to visit (33 percent) or even live with them (20 percent). According to the study, one out of six retirees (16 percent) today has a "boomerang" child who moved back in with them.
  • Retirees who did downsize (51 percent) cite greater freedom from the financial (64 percent) and maintenance (44 percent) burdens of a larger home among their top reasons.

Among retirees who do not plan to move during retirement, the top reasons include a deep emotional connection to their home (54 percent), close proximity to family (48 percent) and friends (31 percent), a desire to remain independent (44 percent), or because they simply can't afford to move (28 percent).

Prior to age 55, more homeowners say the financial value of their home outweighs its emotional value. As people age, however, they become far more likely to say their home's emotional value is more important – a reason cited by nearly two out of three people (63 percent) age 75 and older.

Retirement hotspots

Among people age 65+ who moved last year, most (83 percent) chose to remain in the same state; however, roughly one out of six (17 percent) relocated to a different state:

  • Sixty percent of pre-retirees anticipate staying in the same state or region, while the remaining 40 percent see retirement as a chance to try living in a new part of the country.
  • To a large degree, where pre-retirees say they want to stay or move to in retirement mirrors where today's retirees say they are the happiest. For instance, roughly four out of five pre-retirees living in both the South Atlantic (80 percent) and Pacific (77 percent) regions say they want to continue living there in retirement – two of the top three regions where current retirees give the highest marks among ideal places to live.
  • Among pre-retirees who want to move to a different region once retired, the South Atlantic is the clear winner – with 39 percent saying they would most want to move to that region, followed by the Mountain (25 percent) and Pacific (16 percent) regions.

© 2015 Florida Realtors®

____________________________________________________________________________________________

 

Study: Baby Boomers, Empty Nesters Lead in Vacation Ownership

 

The study of 938 recent timeshare buyers was conducted by Ragatz Associates and will be officially released in August

RISMEDIA, July 20, 2006—The American Resort Development Association (ARDA) International Foundation has released preliminary results of the new 2006 Timeshare Resort Owners: Who They Are Why They Buy study. The study of 938 recent timeshare buyers was conducted by Ragatz Associates and will be officially released in August.

Of recent buyers, only 18.5 percent are under 40, whereas 30.4 percent are 60 and over (and 8.8 percent are 70 and over), according to the study. Another 23.0 percent are in their 40’s, and 28.1 percent are in their 50’s. By comparison, among all owners, 9.3 percent are under 40, 40.2 percent are 60 or over (15.5 percent are 70 or over), 21.0 percent are in their 40’s, and 29.5 percent are in their 50’s.

Only 31.4 percent of recent buyers have children under 18 years of age living at home. For all owners, this proportion is even lower at 24.9 percent. This figure is down from 36.4 percent for those purchasing in 1996 and 34.3 percent of those purchasing in 2002, in accord with the aging baby boom generation.

The study showed a dramatic increase in the number of single females as recent buyers with the proportion of single females increasing from 8 percent in 1996 to 12.7 percent in 2005, a 58.5% increase. At the same time, the percentage of single male buyers has remained fairly consistent, with 4.1 comprising new buyers in 1996 compared with 4.3 percent in 2005. Overall, nearly one in five new buyers is single (17%).

 

The study also showed:

83.0 percent are couples, whereas 17.0 percent are singles;

31.4 percent have children under 18 living at home; and,

41.5 percent are in their 40’s or younger, whereas 30.4 percent are in their 60’s or over.

“With the profile of the average timeshare buyer becoming increasingly diverse across population segments, this study underscores the flexibility and value of vacation ownership products for a broad range of consumers and lifestyles,” said Howard C. Nusbaum, ARDA’s president and CEO. “This study will be of great interest to those in the industry in terms of how timeshare is marketed and to whom. The owner base is shifting in accordance with the general population with an increasing number of empty nest couples and single women.”

Findings are based on two surveys conducted of resort timeshare consumers, including:

Consumers who purchased timeshare during 2005, or “recent buyers:” This survey involved mailing and e-mailing 10,000 questionnaires to a random sample of recent buyers who purchased in the U.S. in 2005, with names and addresses being obtained from RCI. A total of 938 responses were obtained for a response rate of 9.4 percent. This provides a 95 percent confidence interval of +3.2 percent for results overall.

Consumers who purchased their timeshare prior to 2005, or “all owners:” This survey involved mailing and e-mailing 10,000 questionnaires to a random sample of RCI members who have owned their timeshare in the U.S. for at least one year. A total of 1,547 responses were obtained for an overall response rate of 15.5 percent. This provides a 95 percent confidence interval of + 2.5 percent for results overall.

The American Resort Development Association is the Washington D.C.-based professional association representing the vacation ownership and resort development industries. Established in 1969, ARDA today has nearly 1,000 members ranging from privately held firms to publicly traded companies and international corporations with expertise in shared ownership interests in leisure real estate. The membership also includes timeshare owner associations (HOAs), resort management companies, and owners through the ARDA Resort Owners Coalition (ARDA-ROC).

The ARDA International Foundation (AIF) conducts research and develops education programming for the timeshare industry. The Foundation’s mission is to “support, conduct, and disseminate research and technical studies that will enhance and improve knowledge for the public and the industry, and develop educational resources that will optimize value, operations, acceptance, and service for the industry and the public.”

 

Boomers' New Retirement Option: Condo Hotels

 

Despite national reports citing the real estate frenzy is approaching a freeze, Baby Boomers will continue to heat the market

RISMEDIA, July 21, 2006—Despite national reports citing the real estate frenzy is approaching a freeze, there is a rising demographic that will continue to heat the market: The Baby Boomers. As they pursue their ideal vacation or retirement home, analysts suspect that this equity-rich group of retirees will keep the momentum of the market at a steady pace.

Research indicates the number of second homes purchased between 2000 – 2004 has nearly doubled. The value of homes doubled as well, with the average home rising 55% during these 4 years. Keunwon Chung, a statistical economist at the National Association of Realtors, says the Baby Boomers, especially those with above-average incomes, are primarily motivating the second home market.

Tax-friendly retirement states such as Florida, Arizona, and Nevada have witnessed an explosive growth in both home construction and appreciation. Florida experienced a 25% increase in home prices last year, with one in five of those homes being a second home purchase. The U.S. Census Bureau expects this rate to steadily continue and predicts second home purchases from Baby Boomers will reach 6.4 million units by 2010.

Most Baby Boomers are seeking luxury in their second homes. According to a Coldwell Banker survey, the Boomer generation "...wants luxurious homes and wants to remain active." And this generation can afford their desires. From the accumulation of wealth through the stock market, home equity, and inheritance, Boomers have more money than any previous retiree generation. Studies from Harvard, NAR, and NAHB agree that Boomers will most likely use their resources to purchase multiple residences that focus on location and amenities.

While condos traditionally filled this requirement, a growing number of Boomers are now turning to condo hotels.

Condo hotels appeal to Boomers because it markets luxury and location. "Why buy a condo in town that sits empty for 3/4 of a year when they can own a condo hotel, have five-star amenities available to them, be centrally located in a top vacation destination, and receive rental income?" says Steven Roszell, owner of CondoHotels.com and HotelsForSale.com.

The rental of the condos, provided by the hotel management company when the condo is unoccupied, is another main attraction of condo hotels for Boomers. Bob Waun, of Vacation- Finance.com , says condo hotels offer "subsidized luxury" for Boomers. Waun also believes sheer Boomer demand will motivate the condo hotel market. He cites, "if only 1% of this generation demands condo hotel as a second home option, 1.45 million units will be needed. That's 96,000 condo [hotel units] per year, every year..." for the next fifteen years that Boomers will be retiring. Considering that currently the U.S. has only a handful of markets for condo hotel resorts, it is probable that that demand will supersede supply.

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©2004-2014 Carol Erwin
Broker-Owner
Forgotten Coast Realty of NW Florida
850.648.3000 Office
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