I have read numerous articles about the slumping housing market, and when it might recover.  I have heard that we will hit bottom next year, and then begin the recovery.  I have also heard the worst case scenarios….a slump that will last another 3-5 years.  I tend to think that the recovery will begin sooner rather than later, mainly because of the Baby Boomer generation.

The Baby Boomer era started in 1946, a year after World War II ended.  So that means the very first Baby Boomers JUST started retirement in 2006 at age 60.  That means 76 million U.S. Baby Boomers will be retiring over the next 20 years or so.  The Baby Boomers are the most affluent generation this country has ever seen, and I believe that a sizeable portion will continue to fuel the second home/vacation home market as they look to purchase their special waterfront, golf or mountain home.

I have friends in the real estate market that cater to the elite, luxury market.  I’ve been told that those types of buyers have the cash and means to buy real estate anytime.  Many are not even affected by the tightening of the mortgage lending business.  With prices moderating in some of the over-heated markets, and interest rates still low, we are in a “buyers market” now.  Just look at the inventory of homes available in Florida!  I predict that the market will bottom-out this winter and start the rebound in time for the Spring 2008 market, and of course be fueled by more retiring Baby Boomers.  There are just too many that will want to buy a retirement/second home.  I just don’t see how they can stay on the sidelines for very long without buying…..Plus, many non-US Boomers are retiring in the U.S. to be closer to the world’s best healthcare facilities. In Canada alone, it is estimated that the Baby Boom generation represents an additional 10 million individuals. Factor in buyers from Europe that buy second homes here in the U.S. to take advantage of the weak dollar, and you can see why the second home market will be strong well into the foreseeable future.

We’ll come back to this posting in the Springtime, to see if I was correct!