How major economic and demographic trends are creating new opportunities and challenges for property managers. Auckland Property Management Company
Motivation
Whether we embrace it with open arms or resist it every step of the way, we live in an era of rapid technological advancement and lifestyle transformation. Whereas previous generations could rely on similar patterns of work and personal life for decades at a time, we are faced with the need to adapt to significant changes occurring every few years. This rapid pace of change places unprecedented importance on forecasting and preparation. For those of us interested in growing our careers or businesses it is now a requirement to stay ahead of the curve. This paper aims to describe patterns that are deemed significant to real estate West Auckland Property Management in the next two decades.
Property Management: A Robust and Growing Industry
According to the latest U.S. Census data the real estate property management industry experienced an average growth rate of 7-8% at the beginning of this decade. The data portrays a substantial and robust industry with over 140,000 active firms generating nearly $36 billion in revenues. By virtually all expert accounts the industry is expected to continue to grow at an accelerated pace in the next two decades as the urban landscape of America undergoes a major transformation. The following four factors are considered amongst the most important demographic and economic forces behind this transformation:
1. The Baby Boomer Effect
2. The Generation Y Factor
3. Municipalities and the Planned Community Concept
4. The Local Living Movement
In this paper we discuss each of these factors and try to understand their main implications for property managers. At the end, we provide a series of conclusions and recommendations for further action.
1. The Baby-boomer Effect
Perhaps the most significant and most frequently discussed demographic topic of the past two decades has been that of the baby boomer generation nearing and entering the retirement age at an accelerating pace. This generation which has arguably had the loudest say in forming many contemporary trends, stands to have an even bigger influence given the degree of wealth amassed.
Who Are They? Numbering around seventy-six million, the American baby boomer was born between 1946 and 1964. A demographic that would be significant on account of its size alone, this group's characteristics include a higher level of education than previous generations and assumptions of lifelong prosperity and entitlement developed during their childhood in the 1950s. Aided by modern medicine and a better diet and exercise regime, the baby boomer generation refuses to get 'old' and continues to push the traditional age envelop by partaking in an active home, travel and work lifestyle.
Money Flows. After decades of gainful employment, running businesses and investing the proceeds, the typical baby boomer is looking forward to a prosperous and indulgent retirement. Multiple factors are at play that could make this dream a reality for many. For starters, baby boomers happen to be closing in on their peak earning years and by virtue of their higher levels of education enjoy healthy annual incomes. As another factor, consider that most baby boomers purchased their homes when home prices were substantially lower (as compared to household income) allowing most to pay off their principal residence mortgages early on. Most boomers offspring are also finishing college and forming their own families, further reducing expenses. Add to this mix the fact that this generation is increasingly in line to receive inheritance windfalls from aging parents and you have the recipe for a significant and unprecedented degree of liquidity in the next 20 years. In fact it is estimated that 10 to 30 trillion dollars will be spent by baby boomers on a variety of small and large ticket discretionary items in the next two decades.