If you want to take your real estate investing career where the money is at, you need to stay knowledgeable about what the baby boomer generation is doing. About 77 million people fall into the baby boomer generation. It has long been the most influential demographic group of people whether it comes to finances, politics, or what they are buying at the grocery store. Now they are moving into retirement in the hordes. Often that means a change in residence whether it is across town or across the country. And there are some surprising trends developing.
Why is this group so important when it comes to real estate? On average, they own more real estate than any other group. Eight out of ten own their home. Four out of ten own another property as a vacation home or investment house. In contrast, U.S. Census numbers show only about six out of ten Americans own their homes.
77 Million Baby Boomers Don’t All Want the Same Thing
Coldwell Bank Real Estate recently studied these trends and here I explain what they found. For clarity, they divided the baby boomer generation into two subcategories, the younger boomers (age 47 to 55) and the older boomers (age 56 to 64). There are major differences between the groups. The first thing uncovered is the older group (those in or close to retirement) are not looking to upgrade their home. Only 6% say that is their plan in retirement. On the flip side, 31% of the younger group are looking for more living space.
Many baby boomers are financially secure and looking to take advantage of the lower real estate prices as they edge towards retirement. However, the two age groups are looking at very different investments. Of the older group, eight out of ten are looking for a smaller and easier to maintain living space. It’s not about money; it’s about a simpler lifestyle. Only about half of the younger group wants this lifestyle change. Of those looking for an easier lifestyle, about half are no longer interested in a single family home. Instead, they are looking for a condo or townhouse.
What Baby Boomers In or Near Retirement are Looking for
There are somewhat conflicting reports about exactly what retiring baby boomers are looking for. Some reports say they plan to move into metropolitan areas rich with the amenities they want. Others say they want to move to smaller communities. What does seem to be consistent are the amenities they want wherever they live. These include:
- Quality health care with easy access.
- A secure community environment.
- A good quality of life comparable to what they enjoy today.
- Easy access to shopping.
- The ability to travel without much trouble or time getting to major travel hubs.
- Stable real estate values.
- A moderate climate free from weather extremes.
- A surrounding environment of natural beauty.
There may be serious implications from older baby boomers seeking a simpler lifestyle. Only one out of ten is planning to buy investment property coming out of the recent down market cycle. However, as a whole, baby boomers own 57% of all vacation homes and 58% of rental properties in the country. The fact they plan to buy smaller and easier to maintain personal residences implies they’ll be divesting of these other properties as they continue to move into retirement.
Author bio: Brian Kline has been investing in real estate for more than 30 years and writing about real estate investing for seven years. He also draws upon 25 plus years of business experience including 12 years as a manager at Boeing Aircraft Company. Brian currently lives at Lake Cushman, Washington. A vacation destination, a few short miles from a national forest in the Olympic Mountains with the Pacific Ocean a couple of miles in the opposite direction.