Market analysts say that the real estate bubble is about to burst. They have been saying this for the past 3 to 4 years and yet, the bubble continues to obtain larger and bigger, especially in the United States and in other countries of Europe, Asia, the Mediterranean and also the Middle East.
In recent years, investment professionals and stock market analysts have been predicting the impending burst of the housing development and real estate bubble however it in no way appears to take place.
How can this the real estate investment market continue to sustain its improvement despite the bleak forecast of marketplace analysts? The two main factors are demographics and immigration, particularly in the United States.
The most significant demographic factor is the infant boomers, kids born within the years following Globe War II. The baby boomers and their children are now in the prime of their lives, economically and professionally. These are the people now who control the economic reins of companies all more than the globe and their buying energy (such as their children’s) are at its peak. In terms of earning and purchasing power, the baby boom generation and their adult children account for the largest population segment in society. Their impact on the economy and the real estate marketplace in specific is such that it is far greater than their parents’ generation.
According to real estate statistics, the infant boomer sector accounts for the increase in real estate investment and improvement nationwide. They are purchasing bigger primary residences, holiday houses and real estate investment properties. In 2004, approximately 36 per cent of house purchases for second homes and 23 per cent of real estate investment sales recorded are for that baby boomer age group.
Add to this the emerging sector of baby boomer kids who are now in their early 30′s and are now ripe for their first house acquisition. This age group is now also reaching their prime to engage in real property acquisition for first house residences as well.
Immigration is another important factor in sustaining the real estate development. Immigrants to the United States more than the past decades are growing and these would eventually need housing as well. Coupled using the fact that immigrant families are mostly highly educated and belong to the medical and technical workforce. This equates to a healthy purchasing capability that makes them a second potent force in sustaining the growth of real estate development project.
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