Survey Says The Real Estate Boomer Generation Baby Boomers and Purchasing Power
Baby boomers might as well be called “The real estate generation.” The 78 million Americans born between 1946 and 1964 have a passion for owning real estate unlike any in the nation’s history. Nearly eight in 10 own their own home, and for those earning six figures or more, the homeownership rate jumps to 90 percent.
A comprehensive new demographic study commissioned by the National Association of Realtors® (NAR) reveals that most boomers live in two-income households, with a 2005 median income of $64,700, which is 31 percent higher than the median for all households. This generation makes up 37.5 percent of U.S. households, but receives nearly half of all aggregate household income. “This translates into a lot of purchasing power and helps to explain why eight out of 10 boomers are homeowners,” says David Lereah, chief economist for NAR.
For baby boomers earning $100,000 or more, the study shows, more than 9 in 10 are homeowners. Among middle-income boomer homeowners, home equity accounts for half of their net worth. Even so, 19 percent are renters, 37 percent say they have just enough to make ends meet and 17 percent report having financial difficulty.
A quarter of baby boomers own one or more kinds of real estate in addition to their primary residence: 13 percent own land, 8 percent own rental property, 7 percent a vacation home, 2 percent commercial real estate and 3 percent another kind of real estate. Baby Boomers Hesitate to Leave Workforce
Most baby boomers are unsure of their financial future, with 75 percent saying they’re not financially prepared for retirement and many expressing anxiety about their ability to retire. Some boomers might even withdraw retirement funds for housing or real estate expenses.
Peter Francese, an independent demographic trends analyst and founder of American Demographics magazine, consulted on the findings for the National Association of Realtors® (NAR). “For the vast majority of baby boomers, retirement is somewhere off in the future,” he says. “Considering that boomers are healthier than their predecessors, and are more likely to work in an office setting, many may work five or 10 years beyond the age of 65,” he says.
Half of boomers who live in an urban area would like to retire in a small town or rural area. Their ideal retirement location characteristics include a lower cost of living, proximity to family, quality health care, a better climate and proximity to a body of water.
More than a third want to retire in an urban or suburban setting, motivated by quality health care and cultural activities. Half of the boomers surveyed say they would consider living in an age-restricted community.
To order the study, call (800) 874-6500 or go to www.realtor.org/babyboomerstudy
Cost: $50 for NAR members; $125 for nonmembers. Survey Says
Home Sweet Home
Americans remain confident about the nation’s housing market—more than four out of five homeowners expect the value of their home to appreciate over the next five years, and nearly seven out of 10 consider it their most valuable investment, according to results from a recent nationwide survey commissioned by the National Association of Home Builders (NAHB).
“The poll clearly debunks media reports speculating on the demise of the housing market,” says David Pressly, 2006 NAHB president. “Despite the current housing market downturn, Americans resoundingly believe that buying a home is the best investment they can ever make.”
RT Strategies conducted the survey of 2,000 households in October 2006.
The poll found that 81 percent of homeowners believe that the value of their homes will rise over the next five years. Only 13 percent felt their home would fall in value, while 4 percent expected no change and 3 percent were unsure.
In addition, 69 percent of respondents listed their home as their most valuable investment. By contrast, this was followed by 401(k) and other retirement accounts, with just 11 percent of those polled citing their retirement account as their top investment. Survey Says
Satisfaction with Real Estate Professionals is Very High
It’s true that buyers and sellers use technology in many aspects of the real estate transaction process. But the most important factors are purely human, according to the National Association of Realtors® (NAR) 2006 Profile of Home Buyers and Sellers.
David Lereah, NAR’s chief economist, says that for the first time NAR is able to quantify the popularity of different kinds of brokerage services. “We find that competition is alive and well, fueled by growth in technology, and that consumers largely prefer more traditional methods of buying and selling homes,” he says. “In finding a home, most homebuyers begin the process online. But they’re still purchasing through an agent—they value the skills professionals bring to the table.”
Based on more than 7,500 responses to a questionnaire mailed to a large national sample of consumers located through county deed records, the profile is the latest in a series of surveys evaluating demographics, marketing and other characteristics of home buyers and sellers.
When asked about the benefits provided by a sales associate, 55 percent of buyers said their sales associate had helped them understand the process, 40 percent said the associate had pointed out unnoticed features or faults with the property, 37 percent indicated the associate had improved their knowledge of the area, 36 percent said the associate had negotiated better contract terms, 35 percent reported a shortened search process and 29 percent said their associate negotiated a better price.
Satisfaction with real estate professionals is very high, with 85 percent of all buyers saying they were likely to use the associate again or recommend him or her to others.
To order the 2006 Profile of Home Buyers and Sellers, call (800) 874-6500, or go to www.realtor.org/newresearch
. The cost is $50 for NAR members and $125 for nonmembers. Survey Says
A Good Place to Do Business
Small-business owners consider local institutions and attitudes toward enterprise key factors that contribute to a small firm’s success, according to a recent National Federation of Independent Business (NFIB) Small-Business Poll on Local Business Climate.
Nearly 65 percent of the owners surveyed think their local community has a favorable business climate, while 20 percent find it unfavorable. Characteristics most valued are community support, a strong customer base, constant growth in the area, a close-knit community, little government interference, opportunity, diversity and quality of life.
Nearly 25 percent of those surveyed say they’ll consider expanding their business, and 59 percent say they’ll do so within their own community.
Of those looking to move, half say business imperatives are pulling them away, while one-fourth say the local business climate is pushing them out.
More than 75 percent have kept the same residence ever since they occupied their current business address. More than half of those who did relocate moved closer to the firm.