A recent report in an on-line real estate news service that I get reported on a real estate market forecast of the make-up of the market over the next 20 years. The predictions, based upon well-documented trends in the general population, are not filled with earthshaking news, but they do demand that Realtors make changes in their practices. Highlights included:
• By 2010 over 40 percent of all households will be comprised of an age group over 55 years. • The number of citizens over the age of 65 years will jump from 34.7 million in 2000 to nearly 70 million by 2030 (a mere 30 years).
• The Spanish speaking population will increase from 31.4 million in 2000 to nearly 65.6 million in 2030.
• 50 percent of children under the age of 18 (42,853,649) will be a minority in 2030. Total US population is estimated at 400 million in 2030.
• The traditional household (married couple with children) which comprised 90 percent of the households in 1950 will comprise only 65 percent of the households in 2030.
• 29 percent of the US households will be living alone in 2030.
• From 2000 to 2030, the U.S. population will grow by 82 million, 72 million of this growth will occur in the South and the West.
• Worldwide the percentage of the population living in cities is projected to grow from 47 percent to 60 percent by 2030. (UN study 2003)
The report had some of its own conclusions about the growth of big cities and the likely population shift away from the Northeast and Midwest towards the south and west. No real news there. I look at this data and see a few things that will impact the real estate market where I am. I’m already seeing the leading edge of the baby-boomer retirement tsunami that is about to occur. The good news is that everyone is not leaving Michigan to go to Florida or some other warm state. Some retirees actually like having four seasons and Michigan has one of the highest counts of gold courses of any state, which is another draw. Perhaps the biggest thing that I consistently hear though is that retirees what to remain close to family, so they stay in the states where their kids have settled.
One trend that is working well for me is that many of these retirees have a desire to get into a small town setting, where they can walk downtown and have a friendly, welcoming environment around them (see my post of August 2 on measuring the “walkability” of your area). These buyers may also be looking for a location to age in place (see my post of August 24 on that topic), which presents some unique design challenges for me to meet.
I’m also hitting quite a few cases of divorce forcing housing changes. This is always sad, but the reality is that few couples who divorce can afford to stay in place, so new, almost always smaller homes are required. I probably have 15-20 buyer prospects right now all looking for new, smaller homes due to a divorce. I’m also getting a few single, first-time buyers who have finally decided that home ownership makes more sense than renting. There are some great buys right now for those buyers.
We are just beginning to see the increase in the Spanish-speaking population out in my area. Bank machines in town now ask me if I want to proceed in English or Spanish. I’m thinking that I may need to get my Web sites translated into Spanish to better serve this new audience. I may even have to go back to school an learn a new language (we had Latin when I was in school and I have yet to hit a Latin-speaking homebuyer).
I am already showing more homes to buyers in the close-in suburbs around Detroit – Ferndale, Royal Oak, Madison Heights and such; and, I expect that trend to accelerate. There is a large stock of affordable housing in those areas and in the city of Detroit that are becoming more attractive to younger buyers. The city’s programs of revitalization and redevelopment of the downtown area should also pay off with increased interest in the urban areas. A better regional transportation system would help, but that seems out of reach for our current set of governing regional politicians.
So the data in this report seems to already be impacting the real estate market in our area and good Realtors in the area are already shifting their practices to deal with the new and coming realities. We led the nation into the housing decline mess and I hope that we lead it back out too. As I reported 2 days ago, I see some light at the end of the tunnel – perhaps that’s a sixty-something, single, Spanish-speaking buyer, with no children who wants a place in the city. ¡Hola!