Baby Boomers, Economic Stability, and a return to Lower Interest Rates
Baby boomers are generally defined as the generation born between the years 1946 to 1964. The 77 million people born in those 18 years are now between the ages of 51 to 70. In school the marketing teachers illustrate the baby boomers as a watermelon moving through a python. The python is the US economy. The bulge in population changed and set new trends in everything it touched. Blue jeans and rock-n-roll, and later once in control of company management – casual Fridays became the norms as baby boomers adjusted the norms to their standards. They started turning 65 only a few years ago in 2011. The group is hitting the traditional age for retirement at the rate of 10,000 per day. That number is forecast to continue for the next 18 years. The influence of the retiring boomers is only 1/3 of the way through. The “watermelon” that is the baby boom generation is now living out the dream of buying at the beach for both second homes and vacation rentals.
The US economy grew at an annual rate of over 3% in the 4th quarter of 2018. The current growth rate is always debated among economists but right now the consensus seems to be the economy is growing at 3% or a little less. These are just predictions and like all economists, their predictions are always revised and subject to correction. The main point though is not the exact rate of growth but rather that that the US economy is growing. The US is the healthiest of the major developed world economies. The unemployment rate is the lowest in a generation and wages are increasing after a decade without improvement. These are all good data points for real estate investors.
The 10 year treasury remains below 3% after briefly crossing above that line between September – December of last year. The affordability of loans for buyers remain attractive by all historical measures. Money is available for lending at reasonable terms.
The local Miramar Beach market
The number of active listings in the market is down 4% from a year ago. Fewer properties on the market results from the combined “sold and pending” listings exceeding new listings in 2019. There is currently 4.1 months of supply on the market as compared to 4.85 months a year ago. The average days on market has dropped to 91 days. The median listing price is up 5.5% from a year ago. The average sold price is up 6% from last year while the median is actually down 3%. The market remains consistent again this month with properties selling for 96% of original listing price. The 5.5% increase from sellers in their ask is a healthy rate but not so hot as to worry about having missed the market. I’ve met many buyers who are afraid to be the “last guy in” or to buy at the top. The data do not show a top but rather a healthy growing market. Now is a good time to be a buyer in the Miramar Beach market.
Tad Hunter and his family are residents in Sandestin. Tad is a Realtor serving families in Miramar Beach, Destin, and Santa Rosa Beach. Tad is a partner in the RealJoy Vacations company. RealJoy is one of the largest independent and locally owned companies in Destin. Regarding Spring vacation bookings, this year’s late Easter will extend the Spring vacation season into late April. Bookings and revenues are ahead of pace for the same time in 2018. Overall rental properties are garnering a higher average daily rate this Spring. Call Tad to have him use his rental knowledge and real estate experience to find the right investment property for you. Is there a topic or real estate development that you’d like to know more about? Do you have a real estate question? Call or email. If you are interested it’s likely that others want to know also.
“If you change the way you look at things, the things you look at will change”. Anon.