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Two Massive Demographic Groups Who Will Drive the Markets in 2017
Who is my buyer? This is the number one question I get asked when talking to homeowners who are considering selling. We go over a lot, but this is the first question. Then the next question is typical, what do you think my home is worth? Again followed by, who is my buyer and how will we attract them?
In 2017, the U.S. real estate market will be in the middle of two massive demographic waves that will power demand for at least the next 10 years.
If you are thinking about selling a home in 2017 look to the millennials or boomers to be your likely buyer.
The millennials and the boomers are the largest groups of individuals in history. Many experts predict millennials will make up 33% of buyers in 2017. Millennials are individuals born between 1980 and the late 1990s. The boomers are individuals born between 1946 and 1964.
While millennials are expected to enter the housing market for the first time in 2017, boomers will be looking to downsize, retire, and relocate for various reasons. Some of those reasons may be to get closer to children and grandchildren or retire in their dream location.
The Millennials and Boomers Are on the Move!
Many of the millennial buyers have saved enough money to purchase larger homes than typical first-time homebuyers in the past have done. Generally, a first-time home buyer would purchase properties less expensive, condo units and starter homes. Due to the fact millennials have waited, saved money, paid down debt and prepared for these purchases, may mean they will be in a position to buy larger homes.
Boomers, short for baby boomers, will have an impact on real estate markets as well. There is a mixed consensus among the experts on what direction the boomers will go. Some are investing millions of dollars in developing properties that cater directly to boomers, such as the Kolter Group. The Florida developer has been luring boomers to condo units that are considerably smaller than their former homes, in tall towers in Sarasota, St. Petersburg, and north Palm Beach.
On the other hand, some experts are saying the boomers are staying put in their homes and not downsizing. Due to the economic crisis of 2008 boomers have lost wealth, are having to work longer than planned, and want to stay put. For those that are moving, smaller more affordable housing seems to be the preferred choice.
Florida’s Boomerang Buyers Come Back Strong – Home Prices Increased 7%
Boomerang buyers are homebuyers returning to the market after losing a foreclosed home. These individuals have slowly but surely made their way back into the real estate market.
CoreLogic reports the year is nearing seven years from the foreclosure crisis peak in 2010. This means that the ‘black mark’ of foreclosure will be officially erased from consumer credit reports.
Florida’s boomerang buyers came back pretty strongly between 2007 and 2013, according to a CoreLogic report. These home buyers came in strong at about 20%. Looking ahead to 2017, the return of boomerang buyers has the potential to be strong.
In the year 2016, the housing industry enjoyed some strong increases in values. This is due to economic factors that stirred the economy. Interest rates remained low, fuel costs were down, low inventory drove home prices up across the nation. In addition, overall consumer confidence was high.
Fortunately, consumer confidence remains high for 2017. With the millennials, boomers and boomerang buyers entering the market the forecast for buyer activity positive, in spite of mortgage interest rate increases.
I hope you found this information interesting and as always I’m here to help. Give me a call anytime if you have questions. I look forward to an opportunity to assist you will all your real estate related needs.