In the 1980s baby boomers didn’t save money. Instead, they bought expensive items, such as luxury cars, and took extravagant long-distance vacations. But for the last decade, because of consumer satiation and the responsibilities of raising a family, these couples are starting to play it more carefully. They’re investing–rather than just spending–their income. And one logical step, is to invest in a second home in .
Households that are headed by someone who’s between the ages of 45 and 54 own the largest share of investment homes (households that are headed by someone between the ages of 55 and 64 years of age own the second-largest share). This suggests that the baby-boom generation is just entering the prime years for ownership.
Nationwide, 22.8 million households that don’t own investment property say that there’s some likelihood they’ll purchase such property in the next 10 years, and 13.5 million of those households indicate that there’s “a 50-50 chance or better” that they’ll buy investment property in the 1990s.
The recession in 1973 and 1974 was a harbinger of the upsurge in the primary house market during the late 1970s. That was the result of baby boomers going from one life stage to another, buying their first home. The recession of 1982 and 1983 preceded the surge in demand for upscale housing in the late 1980s, as baby boomers traded up.
When the boom hits, market within 100 miles or so of a major urban area such as are likely to be the biggest beneficiaries. Middle-aged baby boomers with children aren’t interested in long trips anymore, even when the trips are taken in Volvo station wagons and BMWs.
Many of the baby boomers are buying second homes in anticipation of retirement. Some of them are financing their second homes by borrowing against or cashing in securities and taking out five-year balloon mortgages. Such buyers plan to sell their investment homes someday and use the proceeds to pay off the mortgages on their primary homes–thus retiring without debt. This type of money management is likely to have a large appeal in these uncertain economic times.
Now is definitely the time to buy. So, you can still beat the crowds into the second-home market–before the baby boomers’ boom hits.
There is a lot of free information available to you about buying, selling or investing in real estate. For complete information about the real estate market including current homes for sale, property values and more please visit the most complete website online dedicated to everything real estate at www.pauldingandpolk.com. So please feel free to contact me with any of your mortgage questions and I will me more than glad to answer you queries. Call me on my cell at 404 374 1620 or email me at email@example.com
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