Here is a hyper-example of how a boom unravels – first there is an extended stagnation because sellers don’t believe it, and besides, they’re not going to give it away. But their unwillingness to sell for what the market will bear only emboldens the buyers to wait longer.
Thankfully, we only have 6,507 houses and condos for sale in a county of more than 3.2 million people!
Miami’s crop of new condo towers, built with big deposits from Latin American buyers and lots of marketing glitz, are opening with many owners heading for the exits.
A third of the units in some newly built high-rises are back on the market, though most are listed for more than their owners paid in the pre-construction phase. At the current sales pace, it would take 29 months to sell the 3,397 condominiums available in the downtown area, according to South Florida development tracker CraneSpotters.com.
With the U.S. dollar strong, South American investors who piled into the downtown Miami market after the real estate crash are now trying to unload their recently built condos, adding inventory to an area where 8,000 units are under construction and nine towers were completed since the end of 2013. Some are offering homes at a loss as demand cools. Condo purchases from January through April slid 25 percent from a year earlier, while the average price fell 6 percent on a per-square-foot basis, CraneSpotters data show.
“The problem is that investors are no longer buying, and now they’re going to be looking to sell,” said Jack McCabe, a housing consultant based in Deerfield Beach, Florida. “And what buyers are going to replace those other than vulture buyers looking for deals?”
Only 10 years ago, 2.2 million people were turning 65 each year. That number has surged to 3.5 million this year and will grow to 4.2 million in 2025!
Tomorrow’s retirees will completely transform the housing industry. We have done a tremendous amount of research on this group, all of whom were born in the 1950s. We call them the Innovators because they have created so many innovations throughout their lives. They are:
Tech savvy, which began with their space race fascination as kids
Family-oriented, with almost 50% reporting that they intend to live with their parent or adult child in the near future
More affluent than any prior generation of retirees, thanks to:
Careers that perfectly coincided with a strong economy
A workaholic attitude that led to more double-income households and delayed retirement
80% homeownership, with the majority having no mortgage today
30 years of falling interest rates boosting home values and retirement accounts
All of these factors above will play into the Innovators’ next housing move. They will:
Innovate retirement to be more about health, family, experiences, and continuing to work
Move several more times, including selling their home and moving into a rental in an urban area that is walkable to entertainment
Focus more on living near their kids, with huge rewards to the builders who sell multigenerational-living homes that satisfy Innovators’ needs
Continue migrating south, but not just to the traditional retirement areas, as they will want to be near their kids and a job
The chart above comes from our upcoming book The Big Shifts Ahead: Demographic Clarity for Businesses and shows how dramatic the retirement surge has been recently—and will be in the future.
Standard stuff these days, and it takes a miracle: To buy a Toronto house, this family tries selling itself www.cbc.ca/1.3597317
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