Real Estate Boom Expected in Five Years - Miami is transitioning into a major cosmopolitan city – and the local residential real estate market is expected to thrive again within five years according to National Association of Realtors Chief Economist Lawrence Yun.  

Yun also points to wealth accumulation as a factor not considered when analyzing simple home price to income ratio in Miami. 

“There is no reliable wealth or life time savings information at the local metro level.  A financially stable retiree may have a rather low yearly income from social security checks and pension income, but that same person may have a cool million dollars or two sitting in the bank,” said Yun.  “Yet, because there is no reliable published wealth data, many analysts just use the income measure and totally ignore wealth info.  Trust me New Yorkers and other snowbirds who are moving to Florida will have a thicker bank account than others.”  Why Miami’s housing market will be so robust within five years:   U.S. Baby Boomers – Approximately 78 million baby boomers will retire over the next 10 years.  “This massive group of people is just turning 60 and the more financially successful ones are on the verge of retirement.  Over the next 20 years, a steady flow of wealthy retirees will be flowing into sunny, warm weather destinations,” said Yun.  Ocean views will be of particular interest to baby boomers, and they will be willing to pay high premiums for them.   Foreign Baby Boomers – “The second World War finished at the same time for Japan and Europe as in America,” said Yun.  “Peace brought a spike in baby births.  The financially successful baby boomers from abroad will demand a piece of the American Dream.  It is a status symbol,” he added.  

Nouveau Rich – According to Yun, no one likes to show off more than the people who lived through equality income and consumption.  “Former communist countries like Russia and Kazakhstan are creating newly minted oil barons.  Entrepreneurs are springing up en masse in Easter European countries,” he said.  For these buyers, “a property in London and Miami is the ultimate conspicuous consumption.”

 Yun also believes the insurance situation in Miami will improve and help boost home prices.  Insurance companies that increased premiums following the 2004 and 2005 hurricanes are expected to lower rates in upcoming years, and legislative action will further help lower insurance rates. 

Yun has been named among the top 10 economic forecasters by USA Today.  Visit Miamire.com and click on “Marketing Tools” tab to view Yun’s entire commentary.

 Kimberly A. Kirschner, CIPS

Kirschner Realty International, Inc.

(954) 924-4107

kim@krionline.com