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The baby boomers are a group of people in the United States, who were born between 1946 and 1964. Baby boomers comprise the largest population group in the history of the United States. The size of the cohort gives it immense influence over America's popular culture, politics and real estate both locally and internationally. According to a study conducted in 2006 by the National Association of Realtors, evaluating the influence of the baby boomers on the future of real estate revealed that the baby boomers had an immense influence over real estate.
As regards home ownership, about 78% of the baby boomers own a home, which is actually higher than the national rate of home ownership, which is currently at the rate of 69%. According to surveys carried out on the investment trends of baby boomers, about 95% of baby boomers are of the belief that home ownership is a worthwhile financial investment. Within a period of one year, about 10% of all baby boomers said that their future investment plans would be to venture in additional real estate property. Out of these potential buyers, 28% were planning on buying a house, 24% wanted to purchase land, 19% wanted to deal in rental property, 15% preferred a vacation home while 14% opted for commercial property investments .
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Most baby boomers frequently consult the services of real estate agents before making their investment decisions regarding real estate transactions, both when buying and selling real estate property. Roughly 80% of home sellers and 60% of homebuyers consulted a real estate agent in their transactions in the past one year.
Observing the general trend, baby boomers have had and are expected to continue having a considerably significant impact on the real estate market. As the boomers approach retirement, they tend to value real estate more and will continue investing in land and properties even after retirement. Real estate agents need to understand the real estate investment needs of the boomers to serve them better, by design strategies that target the specific needs of this enormous population cohort. Generally, the majority of baby boomers would prefer to relocate to the rural areas as opposed to living in urban centres after retirement (Jonathan Boehman, 2009).
Melanie Norden, a realtor from San Francisco, has an explanation as to why the boomers are majorly interested in real estate. She argues that she witnesses how people change their investment trends in the market. The significant trend that has fuelled the purchasing of condominiums in new areas of density is as a result of general loneliness among parents and guardians in the 50-60 years age group who prefer to shift away from second homes and suburbs into opulent city dwellings-with walking distance services and entertainment centres. The empty nest condition is the general feeling of loneliness that parents and guardians experience when their children leave home or get married, with the position and control of the parents often becoming less important; commonly in women.
The baby boom generation has experienced their parents' difficulty, having to drive long distances in order to access luxury amenities and the subsequent empty nest isolating effects from aging issues. In a bid to avoid similar effects, the boomers have opted to shop for new solutions to handle those issues when they visit their generation. A desire for ease and convenience is concurrent with a craving to explore culture and city excitement centres; these empty nesters would prefer going to cities like San Francisco which offer condominiums which are fitted with luxury facilities-fitness rooms, Jacuzzi, pools, museums, shopping malls and walking distance restaurants and entertainment centres. A reason why the boomers have opted to invest in real estate properties like residential condos, islands and lavish city dwellings all in the effort of ensuring that they enjoy life even after retirement.
Most boomers especially those in active retirement enjoy easy and unlimited access to conveniences and amenities that hotels/condos offer in a place that is a far away from their children and grandchildren. It is uncertain what will happen in the future, more so to the future of the real estates industry. In that it is unpredictable on what will happen when the boomers retire, whether they will sell off their main residences and settle into their vacation homes which they are purchasing now or whether they will maintain both homes. If they decide to dispose off their primary homes, this may send the real estates market into a disarray-by affecting the existing market prices of apartments and condominiums.
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As homeowners advance in age, they tend to require lesser space and a warm atmosphere, a reason why they prefer to move to warmer climates. Even in instances where parents choose to stay in their current home, when the children move out of the house and it becomes increasingly demanding to take care of their multi-bedroom house, many seniors opt to downsize to a smaller house that is easier to maintain. The lifestyle of condominiums fits these seniors well. The boomers should consider real estate as an excellent retirement investment. Not considering the initial cost of the property, once purchased, real estate property can provide a steady flow of income annually to the owner. Hiring a management firm to manage and rent the property causes very little stress on owners as landlords providing them with a reliable source of cash inflow. Most adult seniors receive multiple lump sum pay-outs upon retirement, but they lack clear financial advice and directions on how to invest that money. Real estate provides a suitable and secure way to manage ones annual cash flow (Jonathan Boehman, 2009).
Baby Boomers have changed the real estate industry's landscape considerably. Real estate Sellers should customize these properties to fit the needs of the specific groups of buyers and also design marketing strategies that tap the potential of this specific category of seniors while still fulfilling their needs. Real estate traders need to pay close attention to the needs of the new class of buyers. As real estate consumers become older, their needs in real estate have changed significantly. There is need for supplementary senior friendly construction to the more complex and sophisticated multi-generational housing to cater for the requirements of this group of people.