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A Glimmer of Hope for the Housing Market

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By : Gary Lundholm    99 or more times read
While the residential and commercial real estate markets continue to struggle, with little to no hope of a speedy recovery, there is one segment of the market that could help shore up the situation. Our nation's baby boomers are coming of age and they are going to need a place to live.

The Census Bureau estimates that 100 million people in the US are 50 years or older, representing nearly one-third of our country's population. These are the largest numbers this demographic have ever posted, and with more active lifestyles they are living longer as well.

For many of these current and future retirees, the recent recession and housing crisis has left a wake of decreased home values and depleted investments. It is a natural transition for empty- nesters to move out of their big family homes and either retire to someplace warm or take up residence in condos or retirement homes. With limited resources this will be more difficult now than in years past. The result of this is the need for governments to create affordable seniors housing; and lots of it.

On the flip side of the coin is the segment of baby boomers that have weathered the economic storm and are still forging ahead with their retirement strategies. This group will be looking for, or will have already purchased second homes to be used for vacation/retirement. For those in their later years or with disabilities, the next move for them will likely be into some form of assisted living situation.

Seniors housing differs from other sectors in the real estate market in that it is not affected by general market trends. Losses of employment and decreased equity in homes have adverse effects on the demand for commercial and family properties; however, senior's housing will continue to be in demand, in one form or another, as the population ages.

Whether they have maintained the resources to do it on their own, or if they are in need of government support, the bottom line is there will have to be more housing to accommodate the increasing demand. Most markets in the nation are experiencing a shortage of senior housing options which is good news for developers and investors alike.

Either way you look at it, the baby boomers are going to help the troubled real estate market by initiating more transactions, and they will also stimulate the economy by creating jobs for the workers needed to build the new seniors facilities and the staff to care for them once they have moved in.

In a time full of depressing stories about the real estate market...there is a glimmer of hope!
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