I am very excited to be taking over as Chairman of the Board for the Vista Chamber of Commerce this year. We have a great Board and a great leadership team for the future. For my first article, I thought I would address a topic from my line of business that is being asked of me frequently: is this the right time for Boomers to downsize?
The Baby Boomer generation is typically classified as those individuals born between 1946 and 1964. As a group, they were the wealthiest, most active, and physically fit generation up to that time. Currently the Baby Boomer generation holds approximately 80% of the country’s financial assets and is attributed to more than 50% of consumer spending. They are amongst the first generation to grow up genuinely expecting the world to improve, and are classified as a generation that received peak levels of income, allowing them to reap the benefits of abundant levels of food, apparel, and housing.
Approximately 8,000 to 10,000 baby boomers reach the age of retirement every day in the United States. This generation’s largest asset is typically their home, as the Real Estate Boom of the 80’s and 90’s rewarded them well. The vision of larger, more luxurious homes was not just a dream, but a reality. Census Data illustrates decade to decade increases in the average home sizes. The average home size in 1970 was 1,400 square feet in comparison to 2,521 square feet in 2007.
What happens when the Baby Boomer generation become empty nesters? Their children are grown up and moved into their own homes. Two thousand five hundred and twenty one (2,521) square feet sometimes situated on fairly large lots becomes more than one desires to maintain. Perhaps the Baby Boomer is ready to travel the world, enjoy life a bit more, or simply have less to clean.
The vast majority of the Baby Boomer Generation are looking at downsizing or retirement living. So, is now a good time to sell?
The economic forecast is based on five primary factors; Inflation, Interest Rates, Unemployment, Supply and Demand, and Foreign Exchange Policy. The American people saw interest rates in the 1980’s as high as 15% compared to today’s interest rates which have been teetering between 3%-6% over the past few years. The cost of borrowing capital and leveraging assets is impeccably low in comparison to years past. According to the Bureau of Labor Statistics, the national unemployment rate in 1983 was 10.8% compared to our national unemployment rate today of 6.2%. Two primary economic factors are positioned favorably for buyers in today’s market. According to the North San Diego County Association of Realtors 29% of individuals in North San Diego County can currently afford to purchase a home in comparison to 41% in Non-North San Diego County.
Detached homes in North County jumped 8.8% to $612,000 in June 2014 (the highest median price reported since September of 2007), compared to $562,500 in May 2014. The year over median price for single family dwelling homes in North San Diego County increased 8.32%, the 23rd consecutive month of year over median price increases.
(Information taken from HomeDex™ Copyright © 2014 by the North San Diego County Association of Realtors (NSDCAR). Used by permission.)
With home prices still on the rise, interest and unemployment rates low, and the affordability index, now just might be the right time to sell your home.
Owner/Broker, Re/Max Regal
Chairman of the Board