Boomers to drive second-home market .

 

Retirement planning has investing in real estate topping the list .

HONOLULU ADVERTISER   April 29, 2007

 

BY LISA SCONTRAS

 

Custom Publishing Group

 

Priorities change. Your weekends are now spent with grandkids instead of doing touch-up painting and home repair. And there’s definitely no time anymore for yard work. Besides, since the kids grew up there’s a lot of equity wrapped up in those three empty bedrooms.

 

David Lereah, NAR’s chief economist, says that conditions are favorable for these motivations to continue propelling the investment market for a long time.

 

 

“To begin with, the baby boom generation is driving second home sales — they’re at the optimum point in life when people become interested in second homes, they’re at the peak of their earnings, interest rates remain low and boomers want to diversify investments,” Lereah says.

 

Realtor Michael Koyama at Prudential Locations LLC credits the baby boomer demographic as the number one reason the second home market is on the rise locally as well, and adds that many boomers are looking for homes where they will live full time, once retired.

 

“Hawaii is perfect for many investors,” says Koyama, a project sales manager at 909 Kapiolani. “The second-home market is very strong here and with the nation’s 78 million baby boomers in their peak earning and retirement-planning years, I think the trend will continue for the foreseeable future.”

 

The typical second-home buyer is approximately 52 years old with an average income of $82,800. More than three-quarters of vacation-home buyers have decided not to rent out their property, and 21 percent say it will become a primary residence upon retirement, according to Lereah.

 

Robin Markle, Prudential agent says that’s true at The Watermark in Waikiki where she is sales director. Many of the buyers at this luxury condominium — currently under construction and scheduled for completion in early 2008 — are intending to retire in the unit someday.

 

“The idea of retiring in a location like Waikiki is a dream come true,” says Markle. “In addition to securing a future retirement home, our buyers are downsizing, relocating and looking for a vacation property to share with family and friends.”

 

Local experts say that Hawaii still has a lot of momentum and is still accepting new inventory — especially in the luxury condominium market in Waikiki and the Kapiolani corridor.

 

Joett Colgan, a recent buyer at 909 Kapiolani, says the appeal to her was the convenience of restaurants, shopping and entertainment all within walking distance of her condo.

 

“We’re not getting any younger, and thinking ahead it might be nice to not have to be so dependent on a car,” says Colgan, who works long hours and doesn’t like the idea of sitting in traffic. “I’m in that 50- plus group, so convenience is a big motivator.”

 

San Diego businessman Paul Woo and his wife recently bought a unit at The Watermark — where the final phase of units will be released soon — that they plan to use in their retirement years. They also just finished building a home in San Diego. Now they can’t decide if they want to use their Hawaii condo as a second home — spending three to six months a year here — or make The Watermark their permanent residence.

 

Lereah expects the long-term outlook for second homes to be favorable because more people will be moving into the prime years for buying a second home. Currently, there are 36 million people age 50 to 59 nationwide, and 45.2 million people between 40 and 49.

 

“That younger segment will become a driving force in the second-home market over the next decade,” says Lereah.

 

 

 

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