Demographics Continues to Shape Our Area

Noted economist and demographer David Foot was recently in Town as the keynote speaker at the annual development conference organized by the Georgian Triangle Development Institute. Mr. Foot is perhaps best known for his book, Boom, Bust, Echo in which he detailed significant trends in our society all of which are largely driven by demographics.

As a REALTOR® there is a significant quote from his book first published in 1996 that has remained with me and is something I have re-quoted myself during various speaking engagements. "Real estate is affected far more by demographics that it is by economics..." After his talk at the conference, I had the opportunity to meet Mr. Foot and asked him as to whether the current economic turmoil had any impact on on his beliefs relative to the aforementioned 1996 quote? His response was an emphatic no although he did quantify it by saying that economic condtions overall are now affected more by global issues rather than just domestic ones.
As I have reported in the past, during the past 3 or 4 years we have seen a significant increase in the number of larger homes being purchased in our market. Many of these purchasers are retired empty-nesters for which common sense would question why such a large home for primarily two people? The answer has typcially been that all the addtional and largely unused space is for visitiors such as kids, grandchildren and others that visit to enjoy the recreational activities in the area. In addtion to this, 3rd and 4th bedrooms are often used not as bedrooms but as his and her offices. I asked Mr. Foot as to whether the current economic turmoil resulting in 20% to 30% reductions in many persons investment portfolios combined with higher home energy costs etc. would curtail this buying trend by retirees for larger homes. Again he said no stemming from the fact that a large demographic pool exists of people who have made and or inherited large sums of money and that they will continue and can afford to reward themselves with luxury homes, travel and other amenities all of which are well within their financial reach whether the overall economy is good or bad.