Baby Boomers put their faith in real estate
Rename them the real estate boomer generation: A comprehensive new demographic study reveals that the 78 million Americans born between 1946 and 1964 have a passion for owning real estate unlike any in the nation's history.Ninety-six percent of all boomers believe that owning a home is a very smart financial investment, and nearly 4 out of 5 now own homes, while 1 in 4 boomers owns other forms of real estate besides a primary home. These include one or more vacation or seasonal retreats, acreage or income-earning property.
The value of boomers' primary homes varies sharply by geographic region. Overall, the median market value of their homes nationwide is $181,700. But in the Midwest, the median is $143,400, in the South it's $147,800, in the Northeast it's $215,000 and in the West it's $359,100. One of every 14 boomer households in the Western states owns a home worth $1 million or more.
Home equity plays a huge role in boomers' financial planning and well-being. Their median equity stake - the market value of their real property minus mortgage debt - is $100,000. The median household net worth of boomers - financial holdings plus real estate, minus all debt obligations - was $149,500 in early 2006. However, 23 percent of boomers age 50 to 60 control equity stakes of $250,000 to $1 million or more. Fifteen percent of boomers aged 42 to 49 already have accumulated home equities of $250,000 to $1 million.
Home equity represents a significant percentage of total household net worth for most boomers. Thirty-six percent of 50-year-old to 60-year old homeowners report that the equity in their primary residences is 51 percent to 100 percent of their household net worth. Thirty-eight percent of boomers between 42 and 49 report the same.
Chris: A major way to provide assets for the rising health costs for the boomer generation, but then when is the right time for the boomers to sell based upon the next generation's needs or desire to have similar holdings? Or not?