NAR RELEASES BABY BOOMER STUDY

Baby boomers are like the vaudevillian who doesn't know when to leave the crowd laughing. They have dominated the economy, housing, product development and just about every other trend since they arrived on the scene in 1946. But the party's over in about 12 years, when they will no longer be the largest population segment in history, nor the largest body of consumers. But until then, they remain the most powerful demographic force in the U.S., particularly when it comes to housing.

According to a new study by the National Association of Realtors® conducted by Harris Interactive, the generation born between 1946 and 1964 is living longer but has no set path for retirement, a finding that may have developers, builders and Realtors in a tizzy.

"The differences from past generations -- and between baby boomers themselves -- will have a significant impact on housing needs over the next 10 to 20 years that is very different from the World War II generation, and many boomers simply don't know how they'll retire," observes David Lereah, chief economist for the NAR. "A significant portion of baby boomers married later in life and had children at a later age, which means many will continue to work beyond the traditional retirement age. Older boomers are thinking about retirement, but one-third expect to go back and forth between periods of work and periods of leisure, and another 35 percent want to work at least part-time or start a business -- all of this will have an impact on the kind of homes they buy as well as where they buy them."

The median age at which baby boomers expect to stop working is 70, but 27 percent say they never intend to stop working. Just over one-quarter are ages 55 to 60.

He said most baby boomers are still in the workforce, and many have children living at home, which makes them a continuing force in the housing market.

"Because they will be in the workforce longer, boomers will postpone purchase of retirement property and won't be making those moves as early as assumed," Lereah said.

Peter Francese, an independent demographic trends analyst and founder of American Demographics magazine, consulted on the findings. "For the vast majority of baby boomers, retirement is somewhere off in the future," he said. "Considering that boomers are healthier than their predecessors, and are more likely to work in an office setting, many of them may work five or 10 years beyond the traditional retirement age of 65," he said.

Given a longer tenure in the work force baby boomers may choose a larger home than earlier generations, speculates Francese. "Boomers may want or need a somewhat larger dwelling that includes one or two home offices, and a low-maintenance home on a single level would have broad appeal to this group," Francese said.

Not surprisingly, most boomers live in two-income households, with a median income in 2005 of $64,700, which is 31 percent higher than the median for all households. This generation makes up 37.5 percent of U.S. households, but receives nearly half of all aggregate household income. "This translates into a lot of purchasing power, and helps to explain why 8 out of 10 boomers are homeowners," Lereah said.

For baby boomers earning $100,000 or more, the study shows that more than 9 in 10 are homeowners. Among middle-income boomer homeowners, home equity accounts for fully half of their net worth. Even so, 19 percent of respondents are renters, 37 percent say they have just enough to make ends meet and 17 percent say they are having financial difficulty.

A quarter of baby boomers own one or more other kinds of real estate in addition to a primary residence: 13 percent own land, 8 percent own rental property, 7 percent a vacation home or seasonally occupied property, 2 percent commercial real estate and 3 percent some other kind of real estate. Four out of 10 respondents intend to convert their vacation home into a primary residence in retirement. Analysis by NAR shows baby boomers are proportionately more active in the second home market, owning 57 percent of all vacation/seasonal homes and 58 percent of rental property.

Ten percent of boomers indicate they plan to buy some form of real estate within the next year, which corresponds with Census data that shows 3.5 million boomer households moved during the last year. Two-thirds are considering a primary residence, but the rest are thinking about land, second homes or commercial property.

Most survey respondents were unsure of their financial future, says NAR, with three-quarters saying they are not financially prepared for retirement and many expressing anxiety about their ability to retire. Some boomers said they might withdraw retirement funds for housing or real estate expenses.

Where boomers will retire is uncertain. Half of boomers who live in an urban area would like to retire in a small town or rural area. Their ideal retirement location characteristics include a lower cost of living, being near family, quality health care, better climate and being near a body of water.

More than a third of all baby boomers want to retire in an urban or suburban setting, motivated by quality health care and cultural activities. Half of boomers said they would consider living in an age-restricted community.

Almost one in four boomer households have a high net worth of $500,000 or more, and this ratio is expected to increase in the future as the generation ages. Virtually all high-net-worth households are homeowners (97 percent), and 47 percent are likely to also own other real estate in addition to their primary residence. More than a third expect to help children or grandchildren with a downpayment on a home. Wealthier boomers want amenities where they retire, including cultural activities such as museums and art galleries. As a result, they are more likely to retire in an urban area or city.

Although most boomers are married couples and 27 percent have children under the age of 18, nearly two out of five baby boom households are nontraditional households, most of which are headed by women.

This changing demographic raises interesting ideas. Nontraditional households may have different needs and desires about where they want to live. Twenty percent of boomer households are headed by women, but because women aged 60 to 69 account for a quarter of homeowners in that age group, the number of women boomer homeowners is likely to increase much faster than average as they age.

For boomers with children, neighborhood schools are of obvious concern, but for those without children or grown children (3 out of 4), security may be a bigger issue.

In a similar study by the Mortgage Bankers Association, it was found that 43 million households headed by someone age 50 or older were owned as a main residence, and 6.6 million age 50 or older own a second home. The rate of second home ownership among boomers was flat between the years of 1992 and 2004, and only 12 percent of respondents said they intended to sell their main home and use their second home as a primary address. Even so, the MBA predicts that baby boomers will add 2 million second homes to their portfolios.

The good news for the real estate industry is that one out of four baby boomers between the ages of 50 and 60 intend to buy some form of real estate within the next 12 months; and the percentage jumps to 37 percent among the same age group with incomes at $100,000 or above.

But don't necessarily look for boomers to buy the most expensive homes. As they eye retirement, they are also considering affordability. Already 67 percent of those age 50 to 60 worry that housing costs could spiral beyond their reach.

Editor's note: The study can be ordered by calling 800/874-6500, or online. The cost is $50 for NAR members and $125 for nonmembers.

Published: October 30, 2006

by Blanche Evans

Realty Times

U.S. HOME PRICES MAY FALL BUT DROPS WILL BE MILD

U.S. housing prices may decline "a little" within the next year, but any such drop is likely to be mild and inconsistent with a bursting housing bubble, according to a paper written by a Federal Reserve economist.

Based on an analysis of housing futures and options and derivatives of housing-related company shares, "market participants expect home prices to decelerate sharply or actually decline a little within the next year," wrote J. Benson Durham, an economist with the Fed's monetary affairs division. However, the anticipated drop in prices "is mild compared to some estimates of the purported overvaluation of the housing market," he added. The paper, dated September, was posted on the Fed's Web site Thursday.

Mr. Durham cautioned that deep and liquid markets needed to signal future home-price trends don't fully exist and that housing futures and options have only been trading on the Chicago Mercantile Exchange since May 22. Still, implied volatility on CME housing options are greater than the historical average, "which suggests that investors see more risks to home prices going forward," he wrote. That higher uncertainty, however, is "generally inconsistent with the perception of a "bubble,'" he added.

Mr. Durham also examined options on shares of certain homebuilders to gauge whether investors see upside or downside risks to home prices. Those options "are only marginally negatively skewed at the present time," he wrote. "This suggests that market participants do not, in fact, view the risks to home prices or, perhaps more accurately, to the broader housing sector as especially tilted to the downside," Mr. Durham concluded.

The paper's conclusions seem in line with the thinking of Fed officials that the sector will slow substantially through the rest of 2006 and into 2007 but is unlikely to derail the economic expansion.

In the minutes of the Sept. 20 Federal Open Market Committee meeting, the Fed said housing "seemed to be cooling considerably" but that the overall economy should strengthen next year "as the housing correction abated." Officials also continue to remark that higher inflation poses a greater risk than a slower economy.

Housing data had declined markedly in recent months, raising fears of a housing-induced slowdown severe enough that it would eventually require Fed rate cuts. But there have been tentative signs of stabilization of late. The National Association of Home Builders index rose in October, albeit by only one point, but nevertheless breaking a string of eight straight declines. And housing starts unexpectedly rose in September, breaking a string of three straight declines.

-- October 23, 2006

By Brian Blackstone

The Wall Street Journal Online

HOW MUCH IS TOO MUCH TO FIX UP YOUR HOUSE

As with any resale product, the person trying to sell said product will usually try to make the product look as new as possible to ensure the highest profit available. In reviewing many of the homes on the market today, however, some sellers don't get that notion.

Don't make the mistake of the seller who, knowing full well that buyers were coming by, not only failed to do a fresh clean up, but also left his underwear on the exercise bike, a pan of crusty macaroni and cheese on the stove and debris throughout the yard.

There are some task items any seller should consider when selling a house. Even if you decide to sell "as is," a little soap and water could put a few more bucks in your pocket. With that in mind, let's look at what sellers should look at doing with any house they want to put on the market; what to do when you want to get a little more money; and how to compete with the Joneses when looking to prepare your home for sale.

Any House

1. Next, declutter the house. Go ahead and rent a huge storage unit and fill it up. Plan this with a bunch of pre-made boxes that have lids you can tape shut and label. Take extra kid's toys to charity. Donate all clothes that are even a bit too tight or out of date. Remove excess furniture (or even cover with matching covers).
   
2. Repair and paint where needed. As with most homes that have been lived in, that would be all of them. Walk through a new construction home to see what you're up against and then go and make yours look as best you can on your budget.
   
3. Landscaping. Thankfully, mulch and flowering plants don't really cost a lot of money for those who are just sprucing up. Before going out and paying for a designer-created landscaping job, start with the local garden center and get some free advice on how to spruce up on a budget. Fresh, flowering plants (even in fall and winter) can make the house look oh-so much better.

Even if you're selling as-is, the above four tips are a must. Next is where we spend a little more money.

Redecorating

1. Renewed color. Giving your house a makeover doesn't have to cost you a second mortgage. The first item to consider for rehab is your color selection. While the traditional advice is "go vanilla," professionally selected colors (not too bold) can make a "nice" house into a "wow" house.
   
2. Flooring is one of the best moderately priced upgrades a seller can install to make a huge difference. While I like the concept of "choose-your-own-carpet" offers in home listings, think about what else it's saying: "We're too cheap to fix up the house now, so we'll let you walk through our tattered, stained carpeting and let you get it installed the weekend after we leave." Like I said, make your house a "wow" by making that first great impression with new carpet.
   
3. Replacing dated items. Sometimes replacing certain items in the house is really more like maintaining your home instead of upgrading it. Items like windows, doors, light fixtures, faucets, door hardware, etc., need upgrading and replacing periodically. A walk down the light aisle at your favorite hardware store reveals this could be done on a budget. Nevertheless, there's nothing more gross looking than a brass light fixture that's chipping and rusting.

Keeping up with the Joneses

At some point you have to look at what the neighbors are doing and keep up or you'll lose out. If everyone in the neighborhood is ripping out the old and installing the new (kitchen, bath, carpet, doors, etc.) then you may be forced to do the same thing long before you're thinking of putting your home on the market. My wife and I are facing that right now with the kitchen. It's starting to show its age, which means before we put the house on the market in a few years, if I want the best buyer (or any buyer for that matter) the kitchen cabinets need an upgrade.

Redo, Remodel, Relax

As you look around the house, making your list of things to change before putting the house on the market, remember to create some time to enjoy your new digs before selling the place. If a sale is on your horizon and you must redo the landscaping before putting the house on the market -- do it early so you can drive home to the professionally designed flowerbeds and floral creations a few months or years before selling it to someone else.

While you want to repair, paint, remodel and add on to your house because it adds value to your home, every homeowner should especially do it because they want to enjoy the changes as well.

Published: October 20, 2006

By M. Anthony Carr

Realty Times

MULTIPLE HOMES STILL IN VOGUE AMONG AFFLUENT

High earners expect to purchase more properties in next few years

Tuesday, October 24, 2006

Second, third and fourth homes are still in vogue for affluent homeowners who participated in a study by Sotheby's International Realty and Architectural Digest.

Thirty-six percent of Architectural Digest subscribers said they plan to buy an additional home in the next two years, and of those who already own three or more homes, 49 percent plan to purchase another home within two years.

Of those who already own a second home, 35 percent said they plan to buy a third home within two years.

Second homes also appear popular with younger owners -- 44 percent of survey respondents under age 45 said they may acquire a second home in the near future.

Geography is the primary driver when searching for a second home, according to the survey, but lifestyle amenities are becoming increasingly critical. About 32 percent of the participants know what amenities and characteristics they are looking for and would search in a number of locations to find what they want. Those with household incomes under $400,000 are more likely than their wealthier counterparts to indicate they would search in a number of locations to find the house that meets their amenity checklist.

What do these buyers want? The study found that waterfront property is the most sought-after amenity when buying a second home, with 75 percent of respondents choosing that characteristic. Proximity to golf courses and aquatic activities, and in-home fitness centers and media rooms/home theaters were also high on the list. Pools and large backyards were the least chosen amenities.

Regional differences were found mostly among respondents from New York and California, the survey found. New York metro-area participants are most drawn to waterfront or oceanfront properties, while Californians found this of less interest.

Also, Californians tend to be less interested in golf courses than other respondents and more drawn to in-home fitness centers.

New York-area metro participants are least interested in ski slopes, while Californians are most likely to search for proximity to the slopes.

***

By Inman News

U.S. HOME PRICES MAY FALL BUT DROPS WILL BE MILD

U.S. housing prices may decline "a little" within the next year, but any such drop is likely to be mild and inconsistent with a bursting housing bubble, according to a paper written by a Federal Reserve economist.

Based on an analysis of housing futures and options and derivatives of housing-related company shares, "market participants expect home prices to decelerate sharply or actually decline a little within the next year," wrote J. Benson Durham, an economist with the Fed's monetary affairs division. However, the anticipated drop in prices "is mild compared to some estimates of the purported overvaluation of the housing market," he added. The paper, dated September, was posted on the Fed's Web site Thursday.

Mr. Durham cautioned that deep and liquid markets needed to signal future home-price trends don't fully exist and that housing futures and options have only been trading on the Chicago Mercantile Exchange since May 22. Still, implied volatility on CME housing options are greater than the historical average, "which suggests that investors see more risks to home prices going forward," he wrote. That higher uncertainty, however, is "generally inconsistent with the perception of a "bubble,'" he added.

Mr. Durham also examined options on shares of certain homebuilders to gauge whether investors see upside or downside risks to home prices. Those options "are only marginally negatively skewed at the present time," he wrote. "This suggests that market participants do not, in fact, view the risks to home prices or, perhaps more accurately, to the broader housing sector as especially tilted to the downside," Mr. Durham concluded.

The paper's conclusions seem in line with the thinking of Fed officials that the sector will slow substantially through the rest of 2006 and into 2007 but is unlikely to derail the economic expansion.

In the minutes of the Sept. 20 Federal Open Market Committee meeting, the Fed said housing "seemed to be cooling considerably" but that the overall economy should strengthen next year "as the housing correction abated." Officials also continue to remark that higher inflation poses a greater risk than a slower economy.

Housing data had declined markedly in recent months, raising fears of a housing-induced slowdown severe enough that it would eventually require Fed rate cuts. But there have been tentative signs of stabilization of late. The National Association of Home Builders index rose in October, albeit by only one point, but nevertheless breaking a string of eight straight declines. And housing starts unexpectedly rose in September, breaking a string of three straight declines.

-- October 23, 2006

By Brian Blackstone

The Wall Street Journal Online

WHICH DRINKING WATER IS BEST FOR YOUR FAMILY?

You have the new home, the new community, the new school district. Your home has all of the newest bells and whistles. But does the most basic of human needs meet high standards?

Water quality is not uniform in the United States. Drinking water quality is dependant on safe sources, competent processing, and ongoing monitoring by regulator, and out of those dependencies, you essentially have three drinking water choices. You can install a well on your property. You can use tap water from a local water company. Or you can rely on bottled water. Not all choices are equally available everywhere.

Let's start with well water. It may be a good option if you can install a well that produces healthy water. However, will you monitor it often enough to make sure that it does not become contaminated? Many people do not monitor enough. And you need to understand that a person with well water depends not only on his or her own on site activity to preserve water quality, but on activity of neighbors as well. And that might not be easy to regulate.

If public tap water is available, that might provide you with an option. The benefit of tap water is that in many places you are going to receive a product that is administered by professionals. There are water quality engineers who on a regular basis will be evaluating the treatment of the water that your family is drinking, the quality of the distribution system, and ultimately the quality of the end product.

The federal EPA has strict standards that are applicable to water from the tap. If water providers fail to meet certain quality standards, they can be fined and in rare instances, even have criminal penalty exposure.

Every year, many public water providers in the United States are required to provide reports relating to the quality of the water. If you want to know how good or bad your water is, you can ask your water provider for the most recent report. Most of this information is also available online.

The interesting thing about these reports is that they are intended to instill public confidence. However, in many instances if you review the report you will find that while the water quality may be legally acceptable, sometimes it is just barely legally acceptable.

For example, you might find that there are very high levels of pesticides in the water. Perhaps they are still within the "safe" range, but the levels may be high and persistent. You might also find that there are bacteria or microbe problems associated with the water.

In these instances, the question you have to ask yourself is whether you are satisfied with water that just barely meets safe levels. Personally, I would rather not have any pesticides in my tap water. I would run rather not have a high level of bacteria in my water. And I would rather not have any microscopic organisms in my water that can make me ill.

Keep in mind that some contaminant levels are normal, safe and acceptable. The question might be whether levels that approach the high end of a range considered to be "safe" are acceptable to you and your family. That is a personal choice that you have to make.

The next option is bottled water. There are people who seem to think that bottled water is always better than tap water. That is obviously not true. Some tap water is very good. Some bottled water is very good.

Bottled water and tap water actually are very similar in that the quality of the product is dependent on the source of the water and subsequent processing. If the water comes from a well that is in a highly industrial or agricultural area, the water might be negatively impacted. Wells can be installed to protect the water inside them, but that is not always fail safe. Mistakes happen and human error happens as well.

Bottled water companies often treat their water before selling it to the public. There are various kinds of treatment mechanisms that are available. In the end, the bottled water providers are supposed to provide you with a quality of water that more or less is the same as the quality set by the EPA for tap water.

There are some people who drink bottled water exclusively and rotate the manufacturers. In a way I think that might be a good idea. This way, even if one product is deficient on one occasion, it can be offset with water from other providers and other sources.

Finally, if you are going to rely on tap water, you might decide to engage in home filtering. According to some estimates, over 40 percent of American households treat their drinking water in one manner or another. Treatment ranges from simple pitchers that cost under $20 to sophisticated systems that can cost hundreds of dollars.

Water filtration systems can improve the taste of water. For some people, that is all that they're looking for. Other persons use filtration systems because they have health concerns.

Water filtration pitchers are inexpensive. They can help with taste and some, but not necessarily all, contaminant removal. Filters must be changed as directed.

Another kind of filtration system consists of filters that are attached to faucets installed under the sink. These filters generally rely on the same kind of technology as pitcher filtration systems.

Reverse osmosis systems force water through membranes under pressure leaving contaminants behind. They are very effective for many contaminants .

More sophisticated systems are also available. Some systems work better in treating some pollutants than others. Which means you really need to understand what is you are drinking before you purchase a filtering system.

Persons with compromised immune systems may have special concerns that impact upon the correct filtration choice. Their doctors should help them make these decisions.

In conclusion, there are numerous drinking water alternatives. Which one is appropriate for your family? It depends on the quality of the local water supply, your required level of safety, and your budgetary concerns.

There are experts in water treatment who are available to guide you through the process. Local regulators may also be able to provide guidance.

Published: October 12, 2006

By Stuart Lieberman
Realty Times

RELOCATING TO CHEAPER HOUSING DOESN'T ALWAYS CUT COSTS

Moving to an area with lower housing costs often doesn't pay off for low-income Americans, according to a study to be released today by the Center for Housing Policy, a nonprofit research group based in Washington.

The study, which looks at families with low to moderate incomes in 28 metropolitan areas, found that transportation costs in places with cheaper housing are often so high that they wipe out the savings from lower rent or mortgage payments. Such places tend to be farther from employers or short on public transportation, which makes commuting costlier.

The study found that housing and transportation costs combined eat up an average of 57% of annual income for "working" families, which the study defines as those with incomes of $20,000 to $50,000 a year. The combined costs ranged from 54% of income in Pittsburgh to 63% in San Francisco; in 25 of the 28 metro areas, the combined total was within three percentage points of the 57

The findings contradict the common notion that many people would be better off financially if they moved from areas with high housing costs, such as California, to states like Texas or Georgia, where housing is much cheaper.

The median house price in San Diego, at $613,000, is four times that of Dallas. But the study found that working families in San Diego spend 59% of their income on housing and transportation, only slightly more than the 57% they spend in Dallas. Families in Dallas spent just 26% of their income on housing, compared with 31% in San Diego, but the Dallas families spent more on transport.

The study also found that moving to an inexpensive outer suburb, but continuing to work near a city center, often backfires. Typically, a move that adds more than about 12 miles to a one-way commute will result in a rise in transport costs that outweighs the savings on housing, the researchers found.

The data on housing and transport costs for working families come from the 2000 U.S. Census. Since then, both housing and transport costs have jumped, but Barbara J. Lipman, research director at the Center for Housing Policy, said the results are still valid. Housing and transport costs have grown by roughly similar amounts.

The center is an arm of the National Housing Conference, a nonprofit group that favors more spending on affordable-housing programs for low- and moderate-income people. The conference is funded by groups including the MacArthur Foundation and mortgage-finance companies Fannie Mae and Freddie Mac.

-- October 12, 2006

By James R. Hagerty

Wall Street Journal Online

MORTGAGE RATE "BUYDOWNS" CAN SELL HOUSES IN SLOW MARKETS

To help move at least some of the unsold houses glutting local markets, lenders are beginning to look "back to the future" for financing techniques that worked in the tough times of the 1980s.

One creative technique is known as a mortgage rate "buydown." Rather than lower the asking price on a house by thousands of dollars, a seller can offer a discounted rate package that lowers' purchasers' effective interest costs and monthly payments during the early years of their loans.

The most popular form of buydown in the 1980s was a "3-2-1" on a fixed rate 30 year mortgage. During year one of the new purchaser's mortgage, the seller agrees to pay 3 percentage points of the interest rate on the mortgage note. During the second year, the sellers pays 2 percent, and in year three the seller pays 1 percent. After that, the purchasers pay the full note rate.

To see how this works in practice, and why it can be a triple win -- for the seller, buyer and the realty agent -- consider this example. Say a seller has had her house on the market for months at $210,000 with no serious offers. She could cut the asking price, say to $200,000, to stimulate some bids. Or, more creatively, she could advertise a "3-2-1" buydown -- essentially subsidizing any qualified purchaser's mortgage payments during the first three years.

Here's how it would work, according to an active proponent, Joseph Lipes, president of Connecticut-based Family Choice Mortgage Corp., who ran the numbers for Realty Times. The sale would be for $210,000, not $200,000. Assume the going 30-year fixed mortgage rate is 6.5 percent. The purchaser applies for a 95 percent ($200,000) mortgage.

In year one, the purchaser's 6.5 percent rate would be subsidized down to 3.5 percent by the seller, creating a monthly payment of $898.09 for the purchaser, instead of the full $1,264.14 principal and interest. The seller's outlay for the subsidy would come to $366.05 a month, or $4,392.56 for the full year.

In year two, the purchaser would be paying at a 4.5 percent rate or $1,013.37 a month. The seller's contribution would be $250.77 per month or $3,009.20 over 12 months.

In the third year, the purchaser would be paying at a 5.5 percent rate, or $1,135.58. The seller would contribute $128.14 a month for a total of $1,542 for the year.

During the course of the three years, the home seller would pay a total of $8,999.44 in rate subsidies, according to Lipes. "So rather than have the sellers lower their sales price from $210,000 to $200,00" -- which might not strike potential purchasers as all that interesting -- "the sellers keep their price at $210,000 and pay $8,944.44 for the three year buydown," a savings of more than $1,000.

"As long as the house appraises for $210,000, it's a win" for the seller, the buyer, and even the realty agent who's commission will be slightly higher because of the higher sale price. Even more important for the Realtor: the house gets sold, in part because the buydown concept can be very attractive to certain purchasers, especially those with tight budgets that will be stretched in the first several years paying for new furniture, appliances and the like.

Lipes points out that Fannie Mae guidelines permit purchasers to qualify for the mortgage at the "bought-down" rate -- 3.5 percent in this case -- provided it's a primary residence and the purchaser has a 660 FICO score minimum (680 for self-employed individuals.) On sales of second homes or investment properties, the rule requires qualification at the full note rate.

Lipes says, "Buydowns have no hidden pitfalls such as negative amortization loans, payment-shock ARMs or others." It's all straightforward, easy to understand, and most important of all in sluggish markets: It's a novel approach in the eyes of many potential buyers today, and it really works.

Published: October 9, 2006

By Kenneth R. Harney

Realty Times

Lower Heating Bills This Season?

Over the past five years, consumers have seen a steady increase in winter heating costs. That may be about to change. According to the American Gas Association, the recent drop in the price of natural gas is likely to help soften this winter’s consumer heating bills.

A drop of as much as 10% from last year’s bills is possible, but the American Gas Association cautions that consumers using natural gas shouldn’t anticipate a large reduction in their utility bills. Approximately 68 million American homes, or 52% of households, use natural gas to heat their homes.

“Bills will be lower if the weather is the same as last year but weather is never the same,” said Paul Wilkinson, vice president for policy analysis at the American Gas Association. “We’ve been on a price roller coaster for six years now,” he said.

The lack of hurricanes in the oil-producing regions of the US this year are also likely to benefit customers, however a winter cold snap that causes higher demand will be the principal factor in determining winter heating bills during the heating season.

“This year, the industry has repaired much of the damage to its infrastructure and wholesale prices are lower, but the weather is a wild card,” the American Gas Association said.

Consumers generally feel that any reduction is a good reduction as all eyes are cast on Mother Nature.

Baby Boomers Influence The Market

Wanting different things from your home as you grow older is becoming a trend. Baby boomers are turning 60, heading for retirement and longing for their homes to be more of an expression of them and less of the functional family raising properties they once were.

Bucking the trend their parents set by remaining in the same homes they raised their children in, 80% of today’s boomers want a different lifestyle and a different property to match it.

“This generation wants upscale living with less complication. They want their homes to be manageable, temperate, affordable, flexible and accessible,” Tom Flynn, president of Hanely Wood Market Intelligence, a media and information company for the housing and construction industry, said in a news release.

Baby boomers’ opinions matter because they have such an influence on housing trends. “Baby boomers have determined the course of the housing market for the last 30, 35 years,” Frank Anton, chief executive officer of Hanley Wood said.

“In the ‘70s, they were kids coming out of college. They weren’t ready to buy a house, they rented apartments. There was this huge building boom in the rental apartment market.

In the late ‘70s and early ‘80s, they started to turn 30 and get married. They bought their first house, so you had a big wave of builders building relatively small, relatively inexpensive homes.

During the 1980s through about 2000, this population segment became older and more affluent, and started to buy bigger houses, termed by many as ‘McMansions’. The trend of remodeling and buying second residences has reigned for the past 10 years”, he said.