NAR in the News

Simply this. A major factor underlying five years of record real estate markets and a bubble-proof real estate economy that’s baffled the experts has been ignored by many. Interest rates and population growth alone don’t explain the unprecedented national passion to own property.

It’s the Boomers. The comprehensive study of nearly 2,000 Americans born between 1946 and 1964, conducted for NAR by Harris Interactive found that:

More Boomers own their own homes than the national average. More Boomers own second homes than the national average. Moreover, Lereah discerns a strategy behind the Boomers' real estate dealings shaped in part by the tax code.

Four out of ten who own a vacation home or seasonal property intend to eventually make that property a primary residence. Historically, other NAR survey data shows only one in five vacation-home buyers had such intentions when they first purchased the property. Lereah believes this has emerged as an investment strategy.

“Some boomers will take advantage of generous capital gains exclusions from their taxes when they sell their primary residence, and then place themselves in the position of being able to convert a vacation home into their new primary residence which would later become eligible for the same tax treatment,” he said. “Then, if their needs change in the future, they’ll be able to take the capital gains tax break after they have lived in that home as their primary residence for two out the five previous years. It becomes a great way to build and protect a nest egg.”