Will 'Echo Boomers' Save the Housing Market?

Echo boomers, the children of baby boomers, will be the salvation of the housing market, Harvard University's Joint Center for Housing Studies predicts.

In its annual state of the nation’s housing study, the center says that the 75 million Americans born between 1979 and 1995 will mean plenty of demand for housing units.

"There will be 5 million more echo boomers than there were boomers when they first started swelling housing markets," says Eric Belsky, executive director of the Joint Center.

Belsky predicts that once the job market turns around, the housing market will recovery quickly because inventories are close in balance between supply and demand.

But the study warns that while echo boomers will increase demand significantly, they may not drive up prices much because their real incomes are lower than those earned by people a decade older when they entered the job market.

"While fundamentally we see what could be the foundation for long-term recovery, we still have to get through today's challenges," says Nicolas Retsinas, director of the Harvard center.

Sources: CNNMoney.com, Les Christie, and Reuters, Lynn Adler (06/22/2009)

Coldwell CEO: Market Needs More Move Up Buyers

This year’s peak home-buying season is suffering from the absence of move-up buyers, Jim Gillespie, CEO of Coldwell Banker Real Estate, told Reuters News.

Gillespie called move-up buyers, “a key to a U.S. housing market recovery” and he met recently with Congressional leaders to support a $15,000 tax credit for all buyers of primary residences.

Rising mortgage rates also slowed the spring sale season, Gillespie said. "When the mortgage rate rose above 5 percent, it spooked many buyers who were already hesitant.”

Source: Reuters News, Julie Haviv (06/18/2009)

Are REITs a Key to Real Estate Recovery?

If you want to bet on the real estate recovery without finding financing and taking possession of property, then consider buying real estate investment trusts.

Fortune magazine says that blue-chip REITs offer a reasonably conservative opportunity for individual investors to profit from the coming real estate rebound. Boston Properties (BXP), Regency Centers (REG), Simon Property Group (SPG), and Vornado Realty Trust (VNO) appear to be among the strongest, the magazine says.

Philip Martin, a senior vice president of Golub & Co., a real estate investment and development firm, thinks there isn’t an oversupply of commercial properties.

"So when we do recover, you are likely to see a pretty healthy snap-back in real estate prices," he says. "This is an excellent environment for those REITs with the right combination of knowledge and capital. They are going to have an opportunity to make some great deals, and the risk-adjusted returns at this point in the real estate cycle are going to be pretty darn good."

Source: Fortune, Michael V. Copeland (06/22/2009)

Home-Sale Hassles of the Rich and Famous

Home-Sale Hassles of the Rich and Famous Anybody having trouble selling their home should take comfort in the fact that even celebrities are having the same problem. Here are some celebs who can’t seem to sell their houses:

Jon and Kate Gosselin, co-stars of the popular TLC show "Jon & Kate Plus 8," have been trying for three months to sell their former home in Elizabethtown, Pa.

Rapper 50 Cent has given up selling his mansion in Farmington, Conn., after dropping the price from $18.5 million to $14 million.

Richard Gere and wife Carey Lowell have dropped the price on their home in New York’s Hamptons from $8.8 million to $7.2 million.

Model Elle Macpherson cut the price of her London Victorian from $9.5 million to $8.5 million, and has since dropped it to $7.5 million.

Star of "Real Housewives of Orange County" on BRAVO TV Jeana Keough, also a real estate practitioner, is facing foreclosure.

Source: Chicago Tribune, Mary Umberger (06/21/2009)