To: re3 who wrote (57595 ) 4/6/2006 11:35:11 AM From: shades Read Replies (1) | Respond to "Baby boomers are such a powerful economic force," said Dave Jenks, co-author of The Millionaire Real Estate Investor. "They're using their wealth to go buy second homes." regulusxt.tripod.com "Real estate, over the past five years, has outperformed virtually every other investment vehicle," said Ron Peltier, president and chief executive of HomeServices of America, the country's second-largest residential brokerage firm. "A lot of people have just speculated in real estate." finance.yahoo.com The trend really started after 1997, when Congress changed the tax code, allowing most homeowners to duck capital gains taxes when they sold their homes. The exemption is $500,000 for married couples, $250,000 for singles, if it was their primary residence for two of the past five years. Under the old system, the only way to avoid the tax was to "roll" the gains into another home of equal or greater value. Americans bought bigger and costlier homes. But now, they can downsize and use the equity built up in their homes to buy second homes. "That's what spurred all this on in the beginning," says David Lereah, the NAR's chief economist. "It's like all the stars are aligned. The tax situations helped, but at the same time, baby boomers were entering their peak earning years. That's why we just boomed in second homes." Sales of vacation homes, though, are expected to stay strong for years, because the youngest baby boomers are only 42 this year. The typical vacation home buyer last year was 52 years old, earning $82,800 a year, and purchased a property that was about 200 miles from the primary residence. The median price was $204,100, up 7.4%. removablecaps.com removablecaps.com More than three-fourths of the buyers had no interest in renting their property. About 20% said it would one day be their retirement home. Joe Klein and his wife bought their first vacation home last year on Lake Wabedo in Minnesota, three hours from their primary residence. He says he might like to retire there but might have to persuade his wife. removablecaps.com
