Study finds boomers bigger on real estate
By Kenneth R. Harney
Syndicated columnist

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.

Consider these findings: • Ninety-six percent of boomers believe that owning a home is a very smart financial investment, and nearly four out of five own homes. One in four boomers owns other forms of real estate besides a primary home — including 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, $147,800; in the Northeast, $215,000; and in the West, $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 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. Of boomers aged 50 to 60, 23 percent control equity stakes of $250,000 to more than $1 million. Fifteen percent of boomers aged 42 to 49 already have accumulated $250,000 to $1 million in home equity.
• Home equity represents a significant percentage of total household net worth for most boomers. Thirty-six percent of homeowners aged 50 to 60 report that the equity in their primary residences totals 51 to 100 percent of their household net worth. Thirty-eight percent of boomers between 42 and 49 report the same.

The new study, conducted by market researchers at Harris Interactive between March 31 and April 6, polled a statistically representative sample of 1,969 boomers. The project was sponsored by the National Association of Realtors and has a margin of error of plus or minus 2 percentage points.

Boomers not only believe strongly in accumulating real estate, but they also intend to keep doing so even as they head toward the traditional retirement years. An extraordinary one out of four boomers between 50 and 60 consider it very likely or somewhat likely that they will buy more real estate within the next year.

Among boomer households with incomes of $100,000 or more, that percentage jumps to 37 percent, and almost two out of five expect to acquire more real estate very soon.
And what do they anticipate buying — especially now that real estate has morphed into buyer's market mode in many areas? Two of three will be looking at a new primary residence; 26 percent expect to buy land; and 19 percent plan to buy a rental property. Clearly, some expect to buy multiple pieces of property.

Most boomers are not real-estate barons or serial investors, of course, and many admit that they're relatively uncertain about the retirement years. Three-quarters of those surveyed said they do not feel financially prepared to retire. Even among boomers with annual incomes of $100,000 or more, one of every two feel they are not financially ready to retire.

Kenneth R. Harney: kenharney@earthlink.net
Copyright © 2006 The Seattle Times Company