Housing
updated on 10 May 2007 |
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Predicting the Future of Real Estate
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By Fe V. Tan |
Demographics serve as a useful and reliable research tool for many
fields and industries, including marketing, entertainment, and even
politics. David Lereah, the Chief Economist for the National
Association of REALTORS® (NAR), says demographics can also reveal a
lot about different real estate markets.
In fact, David believes that demographics can help predict future
activity in certain real estate markets, including, in some cases,
home value and appreciation. The following are some examples of key
demographic indicators.
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"Baby Boomers" - The largest generation
to date, members of this demographic have now reached
their peak earning years. In areas with a greater number
of Baby Boomers, expect significant purchases of larger
primary residences. In addition, Baby Boomers are likely
to buy investment properties and vacation homes,
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leading to a substantial increase in property values for certain
regions of the country.
Children of "Baby Boomers" - Born after 1980,
this is the second largest generation to date. This age group
has entered the workforce and is becoming established. In areas
with large numbers of this demographic, look for sales of
starter homes and condos to rise. |
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Immigrants - Different areas experience large
influxes of immigrants at different times. It typically takes a full
generation, however, for this demographic to begin buying homes and
having an impact on local real estate markets.
Retirees - With advances in medicine and
technology, we are living longer than ever before. In areas with
large numbers of this demographic, or areas where retirees tend to
move, expect inventories to drop and prices to rise.
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