The real estate bubble is getting bigger, some market analysts say that it is about to burst.
They have been saying this for the past 3 to 4 years and yet, the bubble continues to get bigger and bigger, especially in the United States and in other countries of Europe, Asia, the Mediterranean and the Middle East.
In recent years, investment experts and stock market analysts have been predicting the impending burst of the housing development and real estate bubble but it never seems to happen.
How can this the real estate investment market continue to sustain its development despite the bleak forecast of market analysts? The two primary reasons are demographics and immigration, especially in the United States.
The most significant demographic factor is the baby boomers, children born in the years following World War II.
The baby boomers and their children are now in the prime of their lives, economically and professionally.
These are the people now who control the economic reins of businesses all over the world and their buying power (including their children's) are at its peak.
In terms of earning and buying power, the baby boom generation and their adult children account for the largest population segment in society. Their impact on the economy and the real estate market in particular is such that it is far greater than their parents' generation.
According to real estate statistics, the baby boomer sector accounts for the increase in real estate investment and development nationwide.
They are purchasing larger primary residences, vacation homes and real estate investment properties. In 2004, approximately 36 per cent of home purchases for second homes and 23 per cent of real estate investment sales recorded are for the baby boomer age group.
Add to this the emerging sector of baby boomer children who are now in their early 30's and are now ripe for their first home acquisition. This age group is now also reaching their prime to engage in real property acquisition for first home residences as well.
Immigration is another important factor in sustaining the real estate development.
Immigrants to the United States over the past decades are increasing and these would eventually need housing as well. Coupled with the fact that immigrant families are mostly highly educated and belong to the medical and technical workforce.
This equates to a healthy buying capability that makes them a second potent force in sustaining the growth of real estate development project.
