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April 7, 2009 
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Baby Boomers Will Drive Real Estate Growth
Baby boomers, baby boomers, baby boomers; we all hear this term over and over again. So who are the baby boomers? Baby boomers are people in the United States who were born between 1946 and 1964. Approximately 78.2 million people fall into this category.
As a group, baby boomers comprise the largest population cohort in the history of the United States. The size of the group gives it vast influence over American politics, popular cultural, and of course, real estate. To evaluate the influence of the baby boomers on the future of real estate, the National Association of Realtors (NAR) conducted a study in 2006. The findings of the research were published in report entitled Baby Boomers and Real Estate: Today and Tomorrow. Below are some highlights from the NAR study.
AGE DISTRBUTION
According to the NAR report, baby boomers now range in age from 42 to 60 years old. The typical baby boomer is 50 years old, and the oldest of the baby boomers turned 60 in 2006. About 46% of baby boomers are in their 40s, and about 25% are at least 55 years old.
HOUSEHOLD INCOME
As a group, baby boomers are in their peak earning years. In 2005, baby boomers had a household income of $64,700, and about 25% them had a household income of at least $100,000 per year.
HOME OWNERSHIP
About 78% of baby boomers own a home, which is higher than the national ownership rate of 69%. About 96% of baby boomers believe that home ownership is a good financial investment.
FUTURE REAL ESTATE PURCHASES
About 10%, or 7.8 million of all baby boomers, said they were likely to purchase additional real estate in the next 12 months. Of these potential buyers, two-thirds were planning on buying a primary residence, 26% want to buy land, 19% want rental property, 15% want a vacation home or seasonal home, and 14% want a commercial property.
WHAT FEATURES ATTRACT BOOMERS
When baby boomers were asked about what features are most important to them, 38% wanted a lower cost of living, 38% wanted to be near family, 38% wanted easy access to quality health care, 37% wanted a better climate, and 36% wanted to be near a body of water.
PREFERRED COMMUNITY AMENITIES
When baby boomers were asked about the type of community amenities that interest them most, about 18% wanted to be near cultural offerings, 9% wanted to be closer to their family, 4% wanted to be on a golf course, and 3% wanted easy access to educational facilities.
WHERE DO BOOMERS WANT TO RETIRE
When baby boomers were asked about where they want to retire, 33% of them want to retire in a rural area, 30% in a small town, 25% in a suburban area, and only 12% in an urban community.
BOOMERS AND THEIR REAL ESTATE AGENTS
Baby boomers consistently use the services of a real estate agent. Approximately 60% of homebuyers and 79% of home sellers used a real estate agent in their last transaction.
SUMMARY
The baby boomers have had and will continue to have a significant impact on the real estate market. As the boomers near retirement, they continue to value real estate and will continue to invest in properties and land. Real estate agents would be well served to understand what baby boomers want in terms of their real estate investments, and design strategies that target the needs of this enormous population cohort. For more information, read the NAR report entitled, Baby Boomers and Real Estate: Today and Tomorrow
About the Author
San Diego Homes
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