Meeting the Housing Needs of the Silver Tsunami

It’s common knowledge that the demographics of our country are about to change drastically in the coming years, as the Baby Boomer generation (those born between 1946-1964) ages.

Right now, 10,000 people turn 65 each day in the United States. It is predicted that over the next two decades (by 2030), the senior population in America will grow to be over 34 million strong.

As their needs increase, this demographic will fundamentally reshape our nation’s economy. Businessmen and entrepreneurs are beginning to take note of this and plan accordingly.

This demographic shift will impact my industry as well. Within real estate, there’s a term for this phenomenon: “silver tsunami”. This wave of senior citizens who will be looking for senior housing is significant.

Just a few years back, the term “short sale” was fairly new, but it quickly grew to represent a huge portion of real estate transactions in recent years. In the same way, senior housing transactions will be the next major market in real estate.

As seniors begin to make their housing needs and preferences known, Realtors and business people alike would do well to begin to adapt their efforts to meet our seniors where they’re at and provide them with what they’re looking for in terms of suitable and affordable housing.

Let’s honor the “silver tsunami” that has gone before us.

Buy Now, or Wait Longer for the Market to Rebound?

Are you still on the fence about whether now is the best time to buy? You may have been sitting on the sidelines over the past few years, waiting out the bad economy and hoping that the value of your existing home would once again increase. Now in 2013, you’re wondering if you should make your move, put your house on the market, and start looking for that dream house.

Here is some information that may help you decide:

1) Real estate experts are predicting that home prices in America will appreciate by 5.4% in 2013. If that’s true, the chart below shows the difference in what Buyers will pay 12 months from now vs. if they bought today.

Source: KCM Blog

The Dollar Value Impact One Home Sale Has on Our Economy

Before you read further, stop a moment and take a guess as to by how much you think the sale of one U.S. home impacts our economy.

I’m not talking about what the price of the home is, or how much the Buyers and Sellers may have made or lost during the transaction. I’m talking about how many other jobs were sustained and how much revenue was produced as a direct result of that home sale.

Did you make your guess?

OK, then here are the results. After reviewing recent studies by the Bureau of Economic Analysis, the Census Bureau, Macroeconomic Advisors, and the Joint Center for Housing Studies at Harvard, the National Association of Realtors (NAR) determined that the total economic impact of a typical single home sale in the United States is an incredible $56,464!

Which Makes More Sense Financially in 2013: Buying or Renting?

Source: KCM blog, using Census Bureau data

Historically, there has been much debate surrounding this topic.

In years past, it usually made more sense financially to buy rather than rent, since homeowners could build up long-term equity rather than throw away rent money each month.

More recently, however, renting made more sense for some, as home prices plunged and many homeowners found themselves underwater.

But now that we’re in 2013 and the market is picking back up, what makes more sense financially: buying or renting?

Real Estate Lingo Explained

A real estate market in turmoil over the last few years gave rise to new terminology that today is very familiar to us: shadow inventory, cure rates, short sales, being underwater, and being upside down.

Two new terms are now being used to describe certain Buyers and Sellers: zombie foreclosures and boomerang buyers. These terms will likely grow in popularity in coming years, but let me define them for you now.

Zombie Foreclosures

Bankforeclosuresales.com describes this term and potential scenarios best on its website:

“A zombie foreclosure or zombie home is a property that the homeowner has abandoned and assumed the home has become the property of the lender. Essentially what happens is the homeowner leaves the property after receiving a notice of sale from the lender, and then the home is left empty until the bank acquires the property. This acquisition can take longer than desired and during the period in which the home is not yet owned by the bank, technically the homeowner is still responsible for the property.

Sometimes the homeowner thought the property was foreclosed upon and therefore became the property of the bank. However, they occasionally find out (often years later and without notification) that the bank never took possession of the property and instead the homeowner (who thought they were no longer attached to the home) is notified that they are still responsible for the property legally.”

Although this scenario is happening across the nation right now, the way it will play out is not yet clear.

Boomerang Buyers

This colorful description was first coined by the Wall Street Journal last year to describe people who have previously lost homes due to foreclosures or short sales, or went through a bankruptcy, but who now qualify again for a new mortgage. This segment of the population is larger than you might think, with hundreds of thousands of buyers getting ready to give it another go.

Creating a Positive Home Buying Experience

Photo by Ian Britton, Freefoto.com

TD Bank recently announced the findings from their first Mortgage Service Index.  The goal of the index was to “identify best practices and trouble areas in home financing, and act as a service indicator for lending institutions.

Here are some enlightening statistics from that study.

Positive Lending Experiences

• 64% had an “excellent” or “very good” home buying experience
• 67% had a positive mortgage-approval process
• 55% were able to find a good Realtor
• 55% had a good home inspection/appraisal experience
• 53% felt they were able to find the right lender
• 53% were satisfied with the length of the entire home buying process

Why You Shouldn’t Try to Sell Your House On Your Own

With real estate heating up now, some sellers may consider putting their house on the market as a For Sale By Owner (FSBO). Being purely objective, there are a number of reasons why this usually isn’t in a seller’s best interest. Here are a few:

1) While more information than ever is available on the internet, only real estate agents have the experience it takes to make sure your offer gets to the closing table. The goal is to get the highest price in the shortest amount of time. When one considers market nuances and volatility, stricter lending requirements, increasing paperwork, and heightened appraisal standards, it’s obvious that this minefield needs a professional navigator.