Florida Home Sales Rise 6 Percent in February, According to Florida Association of Realtors(R)

Florida Home Sales Rise 6 Percent in February, According to Florida Association of Realtors(R)

The Florida Association of Realtors reports average annual appreciation of 25%, "fierce buyer demand and a shortage of inventory". Myrtle Beach SC realtors report a similar shortage of inventory.

Construction of second homes should continue to be strong as the "baby boom" generation is now 47 to 59 years of age. One market observer states that the peak age for purchasing a second home is from 52 to 59. He reports that a new fast growing trend among the oldest of the "boomers" is to down-size the first home and use the proceeds to purchase a second home. The down-sized first home is frequently a low mantenance patio or cluster home. "Boomers" are clearly planning to travel more. Airlines and resort areas should be beneficiaries of the trend.

In the late 1960's the boomers parents, who were part of the previous baby boom generation, purchased motor homes in record numbers. In 5 or 6 years, shares of Winnebago went from $2 to $110 per share. The energy crunch of the early 1970's killed the trend. This cycle it appears that the motor home trend will not be nearly as pronounced but the second home market is going to exceed all expectations. Resort properties in Las Vegas have reached unheard of prices. Bermuda ocean front condos in many resorts now begin at $4 million or more.

When any trend develops, investors should get on board early. I write this with mixed feelings as I promised my wife years ago that we would sell our resort rental business by the time our youngest child graduates from college but no later than the age of 55. We plan to keep ownership in at least three ocean front condos. The rest are for sale. I have raised my prices to reflect the current market and must only hope that I am not leaving millions on the table.