Mortgage Bankers Association

This paper aims to present a case for the 3 important points:

1. Real estate statistics show appreciation for national data have been miscalculated and misleading, since the alarm in response to a reasonable market valuation, in many cases.

2. Baby Boom population will require a second home, and is the largest boom in the United States.

3. The market for units of Condo Hotel and innovative forms of second / ownership of the nursing home is on the verge of a boom, not a chest.

I. The Bubble:Hate

Our media have dramatized the whole real estate market in the United States as overheated bubble as ready to fall at any time. Even conservative economists pointed out that there are pockets of froth.

This property is not red hot across America. In fact, many older Americans the real estate market is soft, measured in real terms (inflation adjusted) terms, they may also fall in value. But the average is difficult to make a home appreciation rate of 0.3% in the industrial Midwest Newswhile 28% of profits back into the rural areas of underdeveloped areas in Arizona and Florida Headline News is exciting.

Population migrates to the Midwest States sunny South and West to increase taxes through the purchase of "houses of tomorrow. The trend is clear, but again, because many of the Northmen maintain 2 homes at the moment. But there will be a mass exodus when most baby-boom generation retires? is the true story heated markets in southern areas and places second homebut the future potential collapse of values in the heart of the earth? Bubble is actually in the market with a low rate appreciation?

What is an appreciation and there is a measurement of these statistics? National Association of Realtors, the Federal Home Loan Bank, Fannie Mae and the Federal Reserve all have a role in the compilation of statistics. But what is worrying is the lack of economic reason is that the corpse in public debate, after the official statistics issuedthe media.

The media knows that a house in the South East increased by 14% in value by 9% Northeast, Midwest and West, 4%, with 13%. It would be a homeowners $ 100,000 in Utah led to believe that I won $ 13,000, while San Fransican received the same amount? There is a discussion of adjustments for inflation, investment or restructuring, if the growth of local jobs and immigrants, all factors that may have the winner right. As such it is a useless statistic, such as "rate of appreciation, evenI think that is the way to page 12, not to mention the newspaper?

Local markets, and the region is micro, not macro-economic study. Consider next the evaluation of an individual such as micro-economic level.

The Nance / Effects Renova

In 1998-2003, low interest rates refinancing home on record, many homeowners pulled "cash out" to reinvest in their homes:

$ 100,000 house in 2000, with $ 60,000 for debt financing may have been the 75,000 $ (75%), with 15,000 $ in cash goes rightBack home in the capital improvements. This house will sell for $ 120,000 in 2001, it creates wealth, but unless you take the statistics. Increased by 20% in "grateful" value? Or are the improvements and net loans increased value? National statistics measured as an increase of 20%. You decide, multiplied by your neighbors, adding new elements to 1940 bungalows between 1999-2005. If the national rate of appreciation has been recalculated to take account of house restorationexpenditure, real growth of value must be determined and would be a much more calm and helpful in determining whether a house is "overheated".

Reorganization Effect

America's housing stock in 2000 were on average 47 years. The increase in stock Home Depot to a market indicator of how Americans shop – home improvement. While urban areas have seen regentrification unprecedented. The time of a disaster area for improvement, the values to zero. Calculationrate of appreciation is spectacular.

Farmland in Suburbia

You can not change the statistics of housing of this effect? NO. For example, a corn field, sold for $ 5,000 per acre, then $ 50,000 per lot, then $ 500,000 for the house when the statistics reflect a rate of appreciation, without incurring the capital investment in this large increase.

The effect of money: inflation / deflation, silent and unseen, at the First

Frothiest property markets are also the most popular with foreignerscopper. This is a correlative or causal effect? The U.S. dollar against the euro has decreased by 11% since July 2003. For property buyers are using the euro, an increase of 11% in the prices of second homes are invisible. With official inflation at 2.8%, a 14% increase in prices are static for European investors. Revenue in Europe has exceeded even the salaries of the United States by another 4.1%. So was American property values up 18% more without the extra cost of a European buyer. This fact is very important for the appreciation of real estaterates. Foreign buyers can buy relatively easy, but you can sell faster than American owners and will be sold at a lower value than switches currency trend. Markets where high concentrations of foreign buyers no longer exists, will be volatile for this reason.

The actual rate of interest: Reversi for the media?

Price appreciation will return to the average of 30 years of 5% (or lower) in case of rising interest rates? The property values have increased due to the "low cost of capital," from 1998.Low prices have added fuel to the fire of real estate speculation, and the foam is simply money. Zero to loans for first home buyers, loans doc not easy for investors, banks compete for borrowers, including the Internet have all made the economic capital and the real estate market pushed higher.

The transfer of wealth: 20 years

Demographic analysis denies the facts of this mass transfer begins in 1997, 1998 or 1999, but one thing isClearly, this is a wave 20 + years, which led to 17 billion U.S. dollars of wealth has been moved within our population in 2018-2020. With or without social security, these funds will be needed for the generation of baby boomers, how they affect living standards have become accustomed. What will retirement look for Baby Boomers? Many think that will be similar, regardless of the Boomers (or zoom) who want to see, even if they borrow for the lifestyle.

Leopards and addresses.

Boomers arenot radically change their lifestyle in retirement. Ways to provide an exciting retirement will be offered by this dynamic generation is not invented. The housing boom will continue to homeownership boom in demand, real estate has worked in the past and will be ways to make them work for their living requirements of the future to find. Boomers will require more or less, the most prestigious places and spaces will be pushed to levels of star, because they are a generation up tothe best from a large cohort of competitive players.

II. Population data

Large cohort: Boomers Around The World

Boomers Americans often think of the Rolling Stones as the American band of their generation. If not the British, French and German … and Japanese. The media has touted the 78 million U.S. Baby Boomers will retire over the next 15 years (the largest population turned 50 last year, with 50th birthdays occurring every 7 seconds), but there will be 103 millionEmpty Nester in Europe in 2009. Japan will be 32 million boom in 2010, a total population of only 127 million people. 213 million Boomers compete for a unique way of life like in retirement.

213 million Baby Boomers, all raised in Hollywood, Disney and the Stones? All experienced the same Trans-generation inheritance of the "greatest generation of savers. Even in Japan, where savings are at the national level, the baby boomers are grossly out spent the previous year (Second World)generation. The baby-boom generation was the first group of 20 century, to cover debts, the cost of economy and a global economy.

How many of these 135 million World Boomers will opt for a stay of seniority or other place on American soil? If boomers, only 10% of Europeans choose U.S. and Japan, our population will increase to 13 million euros, or nearly 900,000 years of service high net worth boomers. Entirely new city could be and has been formed.

This statistic gives out, soBoomers many other world with the resources to choose the American way of life in retirement. But from 213 million Boomers demonstrate the point, something big happens demographically. In an age when our media pines on our trade deficit, we must recognize our unique run where we have a real competitive advantage – our way of life. First World health care, economy, security, free and open borders, entertainment, a relatively low rate of taxation, stable currency and markets, and finally – ahistorical value of the property market.

So there is a bust after retiring Baby Boom in America? First demographic data show that the income of the previous generation, had declined between the ages of 45-54, but researchers believe Boomers delaying retirement – and prevent a possible decline in household income – in the same way that delayed marriage and children. As a result, Boomers may enter their mid-50s and 60s with their family income intact – achange in a demographic model that will create a huge investment and business opportunities. At 65, even 15 years away for most of the baby boomers, to err is a wave of consumption that must be preserved. Boomers over 50 think of themselves at the beginning of "under age" and that "age" is still almost 20 years in the future.

It should be a national priority in the court of world's richest will soon retire. Many of the fastest in the housing market in the United States reviewed are already experiencingperformance of these new immigrants. No longer hidden in the masses, they arrived in first class and private flights for hunting.

As the oldest baby boomers become senior citizens in 2011, the population of 65 years is expected to grow faster than the total population in each state. In fact, 26 states are required to double their 65 – and the older population between 2000 and 2030.

Florida, California and Nevada would each gain more than 12 million people between 2000 and 2030. Arizonaplans to add 5.6 million people, and North Carolina, 4.2 million, Texas and Florida could each 3 million residents new to add. As a result, Arizona and North Carolina moved into the top 10 in the total population in 2030 – Arizona rising from 20th place in 2000 to 10th place in 2030 and North Carolina from 11th place to seventh place. Michigan and New Jersey are expected to fall in the top 10.

The majority (88 percent) of the country's population growth between 2000 and 2030 will occur inSouth and west, which would be home in 10 countries in more rapid growth in the period. The proportion of population living in the South and West will increase from 58 percent in 2000 to 65 percent in 2030, while the share of the Northeast and Midwest will decline from 42 percent to 35 percent.
The Big Chill, when boomers shift in preferences are just as real as the tree itself. Echo baby-boom generation, or children of the Boomers', will not provide a sufficient demand for 7-9 years. This effect on the realproperty values began to appear in some industrial and urban families through the mid-western states. While the generation of echo is also looking for study start-up and lofts, the new generation requires Bust yards of their 30 years of rearing children. Is it any wonder that the sale of the apartments are stronger than ever in the history of the United States?
III. The wealth of nations: Earned and inherited, where does the money?

The world population is growing at the fastest speedIn developing countries, not in the developed world. Most of the world population, a second home in the United States in 1998-2003 can not be seen, low interest rates refinancing home on record, many homeowners pulled "cash out" to reinvest in their homes, even the first world, but people who may be choosing the United States.

Now that he has invested in the United States will hope for the dollar to rise, first sold back to the Euro-dollar surplus. And if foreign buyerscontinue to buy our property, net U.S. dollar rebound as soon as possible.

Like the rest of the world have experienced such a low stock market returns and low interest rates, double digit returns in the U.S. blue-chip property, which has the added advantage of a holiday of sun, looks good on the whole world. Boomers are all over the world to inherit the wealth generation of the Second World War. So the image of wealthy foreign tourists is growing, and some 'true, but surely there is a 80/20line workplace. Not all foreigners are becoming a conspicuous consumer of U.S. housing due to the decline of the dollar?

In the United States, 73.5% of American households boomers under $ 150,000 in wealth. As many as 47% of boomer respondents surveyed in 2002 the costs of travel Index by Allstate Financial say they will continue to work after retirement. So how big is the second home market? You can also the majority of boomers (United States and abroad) to give 2 at home?

Boomers: the expenditure orSavers and investors?

Americans used to save and invest their inheritance. Not anymore. Equity blank asked Americans to consider other options, if you receive an inheritance of 25,000 $ +. Boomers are more inclined to spend money than other groups. Ever the optimists, Boomers are of the opinion that there are many more of them you will find features, and for larger amounts than previous research suggested, according to a poll of 1204 Americans, conducted by knowledge network for the United StatesDemography. And in contrast to their image as conspicuous consumers, Boomers say they plan to take the money in savings to pay for the reduction of debt or invest in a nursing home.

IV. Finite Supply: We all want the same thing

This is such a controversial statement I will make my point quickly: "I have lived rich, and I have lived poor … rich is better." If boomers can afford to live generously, they will.

What Housing Boomers plan to spend their money?

According to a Harvard –The study, "baby boomers are expected to create up to 20 percent of the population in 2030. Baby boomers already comprise the largest group of homeowners – nearly one quarter of all homeowners – with 75 per percent of people aged over 50 years owned their own home. Research shows that boomers are looking for second home ownership as an opportunity for intelligent investment. Considering that boomers are starting to think in new ways to invest in real estate, as part of their pension, theU.S. Census Bureau provides for the purchase second home for the boom to reach 6.4 million units in 2010, from 5.5 million units purchased in 1990. According to the NAR, the investment houses responsible for a quarter of all home purchases in 2004, and holiday buying more 13 percent. "

According to a survey cold sink banks' affluent Baby Boomers are not ready to be present in their homes forever. " Boom of today are not in decline, and most are on the go. ThePlease … luxury homes and want to remain active. Are in their peak earning years enjoyed years of strong stock market returns and have accumulated significant equity and understanding in their homes. These factors, along with many receive inheritance from their parents, so that the luxury market to flourish and be strong in coming years. "

V. Boomers will choose new options for Second Home Ownership: Condo Hotel
Active and dynamic of retirementlife requires a substantial net value of new creative ideas. Making the boom to adapt to innovation and leverage. The concept of Condo Hotel is not a new invention, but the Condo Hotel Resort is a new development. More than just a hotel room / suite, Condo hotel units are sold at a higher price per square foot for most (10-25% of the premiums, $ 300-1000 per square foot) of a traditional building and is generally less. The winning projects will be located, quality, service andservices that are better. Boomers will buy for its central location, a spa / health club services, and of course, cleaning / service / service concierge off the lifestyle of your dreams. Condo Hotel units often have kitchens, kitchens or efficiency. But for a generation that has perfected eating out, and the kitchen trophy – they are there, actually – which is served at the table?

Like many boomers want to retire to a hotel room for a few months each year? This is a generation thatspend 5 days a week building up frequent flyer mileage benefits, a 2 days at home. After a year or so back to the ranch, where they feel most at home? And what about all your stuff? Most boomers choose to stay in Condo Hotel units for no more than a few months each year, the latest generation of a constant mobile home in the sun in winter, but this generation is accustomed to / required 'a bit more. They want more of a hostel, and if they can find out howafford more housing, the sky is the limit. How can a boom to buy a hotel? They can not afford the luxury of being at 76.5% of the boom less wealthy? The answer is yes, hotel condominium is just one of the new development, opportunities for ownership of second homes, which offer a less expensive than a traditional second home.

During 2000-2003, the average price of a Deluxe Hotel Room was $ 239,066 ($ 415/sq ft), down 18% since the hotels are bought and sold based on a capitalization rate (value / NOI = Cap Rate).Increases in income and falls, the values fluctuate hotel.

Vs. potential real income

A couple of large holes can be poked into their ideal image. If the owner decides to his unit Condo Hotel suites for the entire season, would have destroyed much of its revenue potential. When the owner of the Condo Hotel often shares the cost of professional maintenance / management of the device can charge the highest cost and most comprehensive of a traditional apartment.
Finally, because the future buyer willlikely to be involved in the possession of an apartment for much the same desire to offset the cost or other residents can afford better, the value of the unit to be set by the income they produce, not tempered or not.

Macro-economic forces: the values Condo Hotel

If interest rates rise 1% 6.5% to 7.5%, and real estate is strictly valued for the income / maximum rate that produces the value of this $ 332,750 Condo Hotel units decreased by $ 14,755 ( 4.4%). Higher education should, in theory, also strengthen thethe U.S. dollar, which could also have a further negative effect on property values. Stronger U.S. dollars may also reduce the demand for tourist rooms, and a decrease in the U.S..

On the positive side of the accounts is pure demand boom. The next 15 years will be 291 boomers retirement age and demand for new location opportunities for the realization of an asset, needs to luxurious lifestyle. If only 1% of this generation requires Condo Hotel as a second home option, 1:45 million units will be needed. That is 96,600 for Condosyears, every year. If we assume that there are 12 major markets in the United States to judge resort hotel, there will be 8050 units per year in each market. Applications will be overtaken by rough landings.

IV. Conclusions

Harvard, NAR, and Nahb all agree that boomers want to buy luxury homes in second place, and probably their assets, and equity Current nursing home to be used to reduce the number of homes with similar properties, structures and places. Demography and life cycle can be predictedfuture demand.
Boomers can afford this property in the same way they use all their old homes purchased with the debt to manage.

U. Boomers S. boomers will compete with foreign desirable for the same pension and property second home. Property prices have already risen and will continue the best for at least 10-15 years beyond retirement approaches boom.

"The current Bubble Theory" is a gapping hole When: 2005 or 2020? The answer is that when Domesticincrease in interest rates above 9%, while the dollar began to strengthen against world currencies and the boom (the world) to decide what they have found the perfect piece of retirement paradise found. Bubble inflates at the same rate until all 3 things happen.

The majority of boomers want to Luxury Resorts and facilities in planning their retirement assets. Less than 20 million euros (26.5%), boom of the United States will be rich enough to provide an entire second home ownership, rentalincome. Luxury Condo Hotel offers grants that will have a growing range of boomers common sense.

America should be marketing our way of life full of boom in the world are disappearing borders, because they live in the greatest nation on Earth?
Boomers get creative with the purchase of a combination of primary residence, Condo Hotel and Fractional and PRC ownership options, more efficiently use their limited nest eggs and one year active and vibrant gold.

If only 1% of the boomdemand for Condo Hotel, Condo Hotel 1:45 million units, will be asked Boomers over the next 15 years. Demand will exceed supply.