The Boomers- Part II

The Boomers - Part II
By Lic. Jay West, CIPS, RSPS,
TRC Coordinator, Region III B (Baja California Sur & Sonora)
AMPI Nacional (Mexican Association of Real Estate Professionals)

Humankind is currently experiencing the largest transfer of wealth from one generation to the next. The numbers are staggering! According to estimates, Baby Boomers in the U.S. will inherit between $30 and $40 TRILLION Dollars by the time the last of that generation reaches 60 years old.

The latest survey released on May 11, 2006 by the National Association of REALTORS (NAR), states that baby boomers continue to dominate the market, and a growing number of second homes more than one-in-ten are owned by minorities. A surprising majority of respondents own multiple properties in addition to their primary residence.

David Lereah, NARs chief economist, says the market continues to be dominated by the baby boom generation.
Middle-aged, middle-income households are the driving factor in the second-home market, with favorable demographics providing a solid fundamental demand in this sector for the next decade, Lereah says. Boomers believe in diversifying their assets, and most second-home owners see their purchase as being a better investment than stocks. A surprising majority of survey respondents hold multiple properties, and they are interested in purchasing additional homes. About six in ten respondents own two or more homes in addition to their primary residence.

In other words, despite market bubbles and changing population trends in housing, the Resort and Second-Home segment of the real estate market will be where the action is for years to come. Nowhere is this going to be more true than in beachfront destination resorts like Los Cabos where investment returns, lifestyle and recreation diversity, safety, and geographic accessibility come together to create a truly unique opportunity for the affluent Boomers.
Ask anyone who has owned a resort second-home here in Los Cabos if their investment has been a good one. They will probably look at you with a quizzical what planet are you from? stare.
NAR President Thomas M. Stevens from Vienna, Va., says the term second home appears to be something of a misnomer. The fact that so many owners of vacation homes and investment property have additional properties is a bit of a revelation. What we see now is a crossover between largely vacation- and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate.
The survey goes on to say that the typical vacation-home owner is 59 years old, earned $120,600 last year, and purchased a property that is 220 miles from their primary residence, but 34 percent were less than 100 miles and another 34 percent were 500 miles or more. Eighty-three percent of owners are married couples.

Three-fourths of vacation-home owners purchased for personal use, although one-third also wanted to diversify investments, and 18 percent intended that the home would become a primary residence in retirement. Only 13 percent of vacation owners listed rental income as a reason to buy. The typical owner spends 39 nights per year at their property, and three-quarters do not rent out. Of those who do rent their vacation home, the median number is 12 nights per year.

If you are visiting Los Cabos for the first time, you may want to seek out a REALTOR (In Mexico, a REALTOR must be a member of the Mexican Association of Real Estate Professionals (AMPI) and the National Association of REALTORS). Take a few moments to discuss the many opportunities to own property in one of the worlds most talked about and desirable resort destinations.
If you are returning to Los Cabos and are asking yourself how come I never invested here before the prices went through the roof? The short answer is that there is still time to participate in the Cabo Boom. Also, take a look at the emerging areas, particularly up in the famous East Cape on Bahia Las Palmas (Los Barriles and Buena Vista). After all, that is where the FIRST Los Cabos resort was built in 1951 at Rancho Buena Vista, and where today you will find the same breathtaking beauty that has attracted the famous and the seekers of serenity for decades. The prices are less than one-half the Cabo market.

Other areas to consider are Todos Santos, Elias Calles, La Paz and even the washboard dirt road north of Punta Gorda to Cabo Pulmo. Words of caution.ALWAYS make sure the title is clean and you will receive yours in a timely manner. And, always make sure you use an ethical REALTOR professional who knows Mexico and Mexican laws.
We will be Booming for at least another ten years here in Paradise, and if you feel like arguing the point, give me a call at 624 147-7479.

Jay West is a Los Cabos Realtor and Co-owner/Broker of CaboRealty with his wife, Teena Jones. He serves as the Regional Coordinator of Baja California Sur and Sonora for the Mexican Association of Real Estate Professionals (AMPI) and is a member of the National Association of Realtors (USA) having earned the designations of Certified International Property Specialist and Resort and Second-home Property Specialist as well as the Transnational Referral Certification from the International Consortium of Real Estate Associations. He is Past President of AMPI Los Cabos and past Chair of the Executive Committee of Los Cabos MLS. Jay specializes in land acquisition and marketing services to developers and also serves as Director of Sales at Villas de Cortez (a Van Wormer Resort) in Los Barriles. He welcomes your comments and can be reached at: West@CaboRealty.com and www.TheEastCape.com