In my last blog post, I wrote about houses under two million on the Shoreline that were flying off the market. I speculated that it had to do with the low prices versus perceived value, the stock market recovery, and the length of time since the last hurricane. All of those things are true, I believe, but I also think that the baby boomer migration may also be a factor.
Baby boomers are turning 65 at an incredible clip, and many of them are retiring. We know that the taxes, especially the estate tax, in Connecticut, means that many of them here are changing residency to other states. Although that entails buying property in other states, it doesn't preclude them from buying here also. When they sell the big McMansions, who's to say that they aren't buying waterfront property for the summers, where their extended families can gather and spend quality shoreline time? It makes sense. They want places where their children and grandchildren will want to visit on vacations and weekends, and the prices are attractive enough to be compelling. They just have to spend six months and a day somewhere else. And winter is a great time to do that, so it all works out well.
What will happen in the future? Some of those families will keep those houses for generations, as long as taxes don't make that improbable. Let's hope that we at least keep people spending their incomes in Connecticut for the warmer months, if they continue to go south in the winters.
