1 big thing: The Retiring Baby Boomer Looks Ahead
Baby boomers are likely to live longer than earlier generations have, and they’re worried about having enough money to cover housing, care, and other expenses for the duration.
Why it matters: Boomers make up 20% of the U.S. population overall but represent 39% of U.S. homebuyers and 52% of sellers. As a real estate professional, being attuned to the needs of this massive demographic will keep you ahead of the curve.
They’re calling it “Peak 65:” Every day this year, more than 12,000 people will turn 65. (That’s 4,380,000 by year’s end if you’re counting.) All boomers will have turned 65 by 2030.
Breaking down the “retirement trifecta:” Leaving behind a career and the paychecks that come with it is scary. Boomers are weighing their current assets and investments against their expectations for the next 20 or even 30 years. Top of mind are questions about:
Income: Boomers want steady, reliable, and sufficient income streams to ensure they can maintain their standard of living even in the face of inflation and rising costs.
Paying for care in late old age: Who’ll look after them when they become frail? What medical expenses can they expect? And how will they pay for it all?
Housing: Safe housing at every stage post-retirement is a must. It’s also likely to be a senior’s largest expense, especially if they move into assisted living or other type of care facility.
Aging in place isn’t cheap either: Most boomers (78%) say they want to age in their own homes. Most existing homes will require some level of adaptation to accommodate their evolving needs, which costs money.
Boomers will also need funds for general upkeep and repairs on their homes, which aren’t getting any younger either.
Those homes are also a source of wealth: America’s boomers currently have about $13 trillion in home equity, a number that’s expected to rise to $20 trillion by the end of the decade.
The importance of relationships: Boomers value relationships with advisers and others who shape their financial well-being. They’re looking for providers who understand retirees’ needs and who’ll work with them to find the best solutions.
The bottom line: The time for digging into the needs and challenges of boomers — from mortgage planning to home-building — is now. These efforts can benefit real estate professionals and investors well into the future as boomers will continue to shape many aspects of the real estate industry for years to come.
2. Motivated Sellers Spiking Home Inventory in Florida
Contrary to nationwide trends, the number of available homes in Florida — particularly those of “motivated” sellers — has increased dramatically.
Why it matters: Although over the past few years, Florida had been an outlier with sustained price growth, the state is now experiencing a surge in inventory, and home prices are stagnant.
An overdue correction?: Redfin’s chief economist Daryl Fairweather noted that “Florida is very unique” in that it “actually sustained price growth after interest rates went up.”
Fairweather calls the stagnant price growth in Florida “a bit overdue.”
The motivation looks widespread: With over 5,600 Zillow listings in Florida that include the keyword “motivated” in the description, it’s fair to characterize the market as flooded with sellers eager to unload their property.
Increased median time on the market: In addition to keeping price growth stagnant, motivated sellers have also contributed to a marked increase in the span of time homes have spent on the market.
2022: Median time for a Florida home on the market: 24 days.
2024: Median time for a Florida home on the market: 57 days.
The cost of owning a home in Florida: Redfin’s Fairweather points out that several factors are contributing to the changes in the Florida market. The state is becoming synonymous with:
Rising HOA fees
Rising insurance premiums (if you can find an insurer)
Rising property taxes
Homebuilders driving inventory: It isn’t only existing homes people are eager to sell. Homebuilders are doing their fair share as they seek to provide available homes for those entering the market.
The bottom line: Florida enjoyed impressive price growth in recent years, but now — thanks to motivated sellers and increased inventory — the market’s catching up.
3. Catch up fast
U.S. existing home resales dipped, increasing inventory, but prices remain high. MPA Magazine
New home sales dropped, too, along with unemployment claims. Reuters
VA to roll out a temporary fix for the buyer commission issue that’s coming. HousingWire
Three Florida cities made the list of best places to live, albeit at lower rankings than last year: Melbourne (#15 to 49th place), Orlando (49th to 68th), and Daytona Beach (52nd to 96th). U.S. News & World Report
A new South Carolina law cracks down on wholesaling by codifying what we’ve been advising wholesalers to do for years in Florida. Bigger Pockets
In face of multiple lawsuits, Keller Williams changes course on changing course on its profit sharing plan that we discussed in last week’s edition. HousingWire
4. Closing Thought
Yesterday, Sean Foley spoke to a group of local CEO’s and business leaders at a luncheon sponsored by First Horizon Bank. I was fortunate to be invited and even ask Mr. Foley a question.
He shared his thoughts on primate behavior, neuroscience, and child-rearing, among other far-reaching topics.
He told the story of one of his Pro-Tour players who was at the bottom of the pro standings and within five tournaments of losing his touring card.
After coaching him for eight months, the pro has risen over 100 places in the rankings, and is heading for both the British Open and the Summer Olympics in Paris.
And he’s more miserable now than he was when he was close to losing his touring card.
Why it matters: I asked Foley how he coached the pro to focus on the gain instead of the gap since I sometimes have the same issue with crewmembers and clients who are so focused on where they want to go, they never celebrate how far they’ve come.
He talked of the practice of gratitude. Being grateful for what you have and taking stock of that will refocus your prefrontal cortex on celebrating the gains.
Gratitude will also quiet the amygdala’s fear of the gap ahead of you.
Meditation also helps clear the mind so it can focus on the gap in a constructive way, preventing the fight-or-flight emotions of the body’s limbic system from making you miserable.
Finally, sleep quality — going to sleep and waking at the same time each day — keeps the mind clear and focused to prevent spiraling into misery over all that stands between you and your goals.
He also pointed out another term for “failure” is “feedback.”
His son plays lacrosse and missed a goal in a recent game.
When he asked his son for the feedback he’d gotten from the missed shot, his son said that — as he got closer to the goal — the goalie looked larger, and the goal got smaller.
He pointed out to his son that it’s a normal perception and suggested that training should be done with a smaller goal and lots of stuff in front of it.
The bottom line: Meditate, focus on sleep quality, practice gratitude, and anticipate the reality of what you’ll be facing. Then train for that reality to attain top performance and a happy life.
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