Baby boomers investing in real estate.

Prosperous age group sees additional property as a good investment.

By Julie B. Hairston
THE ATLANTA JOURNAL-CONSTITUTION
Saturday, June 10, 2006

Charlotte B. Teagle
ATLANTA JOURNAL-CONSTITUTION

"My wife's mother has knee problems and couldn't come visit us in our last home," Dennis Doll said.

Now making up 42 percent of all U.S. homeowners, baby boomers such as the Dolls have become the focus of the 21st century housing market. In a recent Harris Interactive survey, the National Association of Realtors has been measuring the desires, habits and plans of these homeowners between the ages of 41 and 60.

The generation that sang rock anthems about getting back to the land has done it in a way most did not initially envision.

The rural communes of their youth have evolved into sleek, amenity-packed urban condominium communities. Beach and mountain homes now satisfy their taste for back-to-nature security.

Awash in a lifetime of earnings, equity and inheritance, millions of baby boomers are investing their futures in real estate.

The 77 million U.S. baby boomers are now in their peak earning years, with the survey showing they account for 55 percent of American households with more than $100,000 in annual income.

In addition, many anticipate becoming the recipients of significant inheritances from their thrifty Depression-era parents during the next 10 to 15 years.

The Realtors' survey shows that as many as a quarter of America's baby boomers now own more than one piece of real estate. That's almost 20 million buyers for second homes and investment properties.

Ten percent of the boomers surveyed said they expect to buy or sell real estate in the coming year. If that sample holds true throughout the age range, it would generate almost 8 million sales over the next 12 months.

Robert and Joan Tufts, both 56, are among those second-home owners expecting to complete the transition from their current location to their favorite vacation locale — permanently and in the not-too-distant future.

Although their primary residence is in an Atlanta suburb — a home they downsized into after their last child moved away — they now split their time between there and a beachfront condo near Sarasota, Fla. The Tuftses also have bought a single-family home in the Sarasota area, where they plan to live full time after Robert retires.

"We found something we liked in November and used our equity out of the condo to put a down payment into the house," Joan Tufts said. "A lot of people we know here are doing that."

The movement of baby boomers such as the Tuftses and Dolls to new homes for their current stage of life — and the purchase of possible retirement homes that often begin as vacation retreats — is a significant driving factor in today's real estate market, said Paul Bishop, the National Association of Realtors' research manager.

"Because there are so many baby boomers in the leading edge (of the age demographic), buying vacation homes is going to be a pretty strong part of the market," Bishop said.

The survey also shows that boomers, who have ridden the recent real estate price surge into prosperity, see such purchases as part of a sound financial strategy.

All but a paltry 4 percent of the survey respondents see homeownership as a good investment.