Florida real estate has cooled after several years of sizzling sales and property values soaring. The long-term forecast is looking pretty sunny, however. Some analysts point to the positive long-term demographics for Florida with the looming baby boom generation approaching retirement age. Boomers are those who were born during 1946 to 1964. Reportedly, about 78 million American baby boomers are expected to retire in the next 20 years. Often, those retiring desire warmer climates.
THE BOOMERS ARE COMING! THE BOOMERS ARE COMING!
So in 2006, the earliest-born boomers (i.e. the ones born immediately after World War II), are starting turning 60. Thus, it’s only the beginning of this demographic tidal wave. A former Wall Street economist, Richard Hokenson, spoke to a group of Chartered Financial Analysts in Tampa Bay in September, with bullish comments that Florida property owners may wish to keep in mind during the current gloomy mood about real estate. Describing the baby boom generation as a tsunami wave, with those earliest born boomers on the cusp of retirement, Hokenson told the investment professionals to “ride the wave.” According to Hokenson, “there’s a baby boom tsunami coming and a fixed supply of coastal land.” And, naturally, many will look into buying a retirement home in areas like Florida with mild climates.
Other reports also give credence to the basic demand/supply situation that is anticipated to evolve. Analysts project that high baby boomer demand is likely to increase competition. With regard to coastal real estate in places like California, the Carolinas, and Florida, the forecast is that demand will likely outpace supply and put upward pressure on coastal real estate prices. So for prospective buyers of coastal property who may be waiting on the sidelines in the currently gloomy atmosphere for housing (perhaps with wishful thinking of potential bargains coming down the road), keep in mind “The Boomers are coming!” The Boomers are coming!”
Amelia Island remains a small-town, seaside paradise for those who can afford it. And even though the cost of living here has been escalating, (see related article "Amelia Island Living Becomes More Expensive," in Amelia Island Living eMagazine's Island Perspective section), it's still less expensive than many other areas of Florida, especially the snowbird areas like Boca, Naples, and West Palm. Also on the upside, the Jacksonville/Amelia Island area in northeast Florida is far less hurricane-prone than most other areas in Florida. So will boomers propel coastal real estate prices in coming years? Time will tell.
FED CHAIRMEN COMMENTS ON HOUSING MARKET
Interestingly, this week the former Federal Reserve Chairman, Alan Greenspan, reportedly said that he feels the worst of the housing adjustment is over and “sales figures have stabilized.”
On the other hand, the current Federal Reserve Chairman, Ben Benanke, is not as optimistic. Bernanke commented this week that “the correction in the housing market could turn out to be more severe and widespread than seems most likely at present." Bernanke, in a speech to the National Italian American Foundation, indicated that in the aftermath of soaring housing prices between 2000 and 2005, a housing downturn was “inevitable.”
Demand softened as home prices soared and became less affordable for average buyers, resulting in today’s need for price cuts and incentives to bring buyers back into the market. However, Bernanke noted that the slow pace of home sales currently along with the number of homes for sale still on the rise, means that it could take a long time for the market to absorb the inventory for sale.
Why is the current environment a potentially great time to buy a home in the Jacksonville metro area? See what www.Jaxhomefacts.comhas to say about local housing environment here in northeast Florida.
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