Marketplace analysts say that the real estate bubble is about to burst. They happen to be saying this for the past 3 to 4 years and yet, the bubble continues to obtain larger and bigger, especially within the United States and in other countries of Europe, Asia, the Mediterranean and the Middle East.
In recent years, investment professionals and stock market analysts have been predicting the impending burst from the housing improvement and real estate bubble however it never seems to take place.
How can this the real estate investment market continue to sustain its development despite the bleak forecast of market analysts? The two main reasons are demographics and immigration, especially in the United States.
Probably the most substantial demographic factor is the baby boomers, children born in the years following World War II. The infant boomers and their kids are now in the prime of their lives, economically and professionally. These are the people now who control the economic reins of businesses all more than the globe and their buying energy (including their children’s) are at its peak. In terms of earning and buying energy, the infant boom generation and their adult children account for that largest population segment in society. Their impact on the economy and also the real estate market in specific is such that it’s far greater than their parents’ generation.
According to real estate statistics, the infant boomer sector accounts for that increase in real estate investment and development nationwide. They’re buying bigger primary residences, holiday homes and real estate investment properties. In 2004, approximately 36 per cent of home purchases for second homes and 23 per cent of real estate investment sales recorded are for that infant boomer age group.
Add to this the emerging sector of baby boomer children 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 home residences as well.
Immigration is another important element in sustaining the real estate development. Immigrants to the United States more than the past decades are increasing and these would eventually require housing too. Coupled using the fact that immigrant families are mostly extremely educated and belong towards the medical and technical workforce. This equates to a wholesome buying capability that makes them a second potent force in sustaining the growth of real estate development project.
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