Lure ‘echo boomers’ with financial, family benefits
Good ideas come at you from weird places. Recently, I was reading the Wall Street Journal and came across a story — no, not about real estate — but about a bride who decided to get married at a summer camp called Camp Highlander in the mountains near Mills River, N.C.
As it turns out, the 31-year-old bride had been a camper there for several summers while she was in middle school. In other words, her choice of location for her wedding was mostly driven by nostalgia for a pleasant time in her childhood.
The concept kind of banged around in my head a bit because I had heard a similar story. It was when I cavorting on Mackinac Island, the little, no-cars-allowed summer spot between Lake Michigan and Lake Huron. The rental specialist there told me, "Quite a few people were here in their childhood and are now bringing their families up. We see this a lot."
I recall him talking about one family where the husband had visited Mackinac Island as a boy with his family, and now that he had young children of his own he was looking to acquire a place so his own family could enjoy the same halcyon summer days of his own youth.
Until the recession, second-home locations had been heavily marketed mainly to baby boomers, which was understandable as the 50-and-over crowd control over half of the discretionary income in the country. Or, to look at it another way, 10,000 to 12,000 Americans are turning 50 every day.
Until the bottom fell out of the real estate market globally, the adventuresome baby boomers had been buying second-home properties hither and yon: in Florida, in Las Vegas, in Costa Rica, in Europe, and even in South Africa.
However, most weren’t so courageous and chose locations they knew well — places they had been visiting since they were children. I don’t think most buyers ever came out and verbalized it, but there was a lot of nostalgia involved in their choices.
The same pattern seems to be holding for the echo boom generation, or children of the baby boomers. The woman who got married at her summer camp and the Midwesterners going back to Mackinac Island are relatively young marrieds with children heading into the elementary school years.
They have disposable investment income and are looking for places of familiarity where they can bring their kids and in some cases their parents, who, of course, first took them to places like Mackinac Island when they were children.
Back in 2008, a columnist writing about buying patterns for second homes on the Jersey shore, tapped into this market driver.
In Ocean City, one Realtor told the writer, "Generally, second-home buyers now are people who are familiar with Ocean City and want to have a place here for their families and themselves."
A little further down the coast, a Cape May Realtor explained to the author the resurgent interest in Cape May’s second-home market by commenting, "Another factor may be found in historic visiting patterns, or tradition. Many buyers in Cape May are from families that have visited the city for generations."
As with the primary home markets, the business of selling and leasing second and vacation homes has also collapsed. We are in an economic bust, but not everyone is busted.
Those who aren’t broke, who haven’t lost their jobs and whose businesses are still successful need an incentive to buy property again — and there’s nothing quite like nostalgia. It’s a great marketing tool, but too seldom used in the real estate game.
Baby boomers are still going to be the biggest buyers of second-home real estate going forward, but you shouldn’t ignore the echo boomers.
Here’s the way the demographic trends worked out. After the baby boom ended around the early 1960s, the birth rate slowed for about 15 years. These kids were known as Generation X. They were followed by Generation Y, who are also called echo boomers because fertility rates skipped up again.
Demographic parameters are never solid, but generally the echo boom (better defined as a population boomlet) occurred between the years 1977-88.
Figure it out, these "kids" are now 22-33 and probably have two to three kids, the preponderance of whom are in elementary school or about to enter elementary school.
This is the great period of time for what is known as the family vacation. But, the echo boomers learned a lot from their parents, the boomers, and instead of planning a new summer vacation every year, they — if they haven’t lost their jobs in the recession — are inclined to make an investment in the future: a vacation home.
My evidence is strictly empirical, but echo boomers appear to be every bit as nostalgia-driven as their parents — and as developers or marketers of second homes, why not tap into this frame of mind?
What I’m not advocating is a disregard for the boomers. No, this demographic group is bigger than anything this young country has ever experienced, and by 2020 could be as much as 50 percent of the country’s total population.
According to a U.S. Census Bureau and Federal Reserve report, the 78 million Americans who were 50 years and older in 2001 controlled 67 percent of the country’s wealth.
I think everyone in the second- and vacation-home market understands, and has understood for at least the last decade, that baby boomers will be the primary buyers of properties in their developments for at least another 10 years. The odds are, though, the boomers may have just one more real estate purchase left.
On the other hand, the echo boomers could be clients for decades, so start luring them in — and nostalgia is still a very profound attraction.
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.
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