Pending home sales in north may lead to renewed burst of activity in southern U.S.

        The greatest impediment to the sale of golf community homes in the southeastern U.S. is not an issue of inventory, foreclosures, or even the well-publicized financial difficulties of some former high flying communities, like The Cliffs Communities and Reynolds Plantation.  The biggest obstacle to golf community home sales getting back to where they once belonged has been the inability or unwillingness of northern baby boomers to sell their primary homes and relocate south.

        That may be changing, if the May pending home sales report issued today by the National Association of Realtors is any indication.  Pending sales were up in all regions of the country last month, including in such “feeder” cities as Hartford, Minneapolis and Indianapolis whose retirees have historically relocated south for their retirement years to enjoy the warm weather, golf and other activities.

        I can sense the southward migration picking up steam in my discussions with real estate agents from Virginia to Florida.  “Sorry,” one emailed me today in response to my request for a phone conversation.  “I can’t talk until day after tomorrow” because he was working with customers from the north (one of which I referred to him from upstate New York).  Other agents have frequently used the word “slammed” to communicate how busy they are.

        Prices on properties in nice southern communities have become so

attractive that northern baby boomers have run out of excuses to wait.  There are 76 million baby boomers in the U.S., and at any one moment, hundreds of thousands of them are at or near retirement, which essentially removes them from that category of workers nervous about their employment prospects.  They can finally take a deep breath and scope out the rest of their lives.  They are entering a phase in which their income is pretty much fixed, if lower than in their peak earning years.  At least things are more predictable, financially speaking, and they can make their relocation plans accordingly.  These boomers may have lost some market value in their homes, but if they have lived in one place for more than 10 years, chances are they gained enough value in the early years to more than offset the losses (on paper) since 2007/08.  Most have equity in their homes that they can use to purchase a smaller and, in many cases, much less expensive home in the south.  They are also coming to understand that the cost of living decreases they will enjoy by moving from north to south will quickly (in a year or two, in some cases) make up for what they lost on paper in their homes.

        Living up north is becoming more stressful and unpredictable (and colder; global warming has not reached New England in winter yet).  The cost of living, especially on the tax side of the equation, is increasing in poorly managed, economically fragile states like Connecticut, where your editor lives.  The battles between our governor and the state unions cannot have a happy conclusion; one way or the other, services will be cut and taxes will go up.  The reasons to move south for folks who can afford to do so have never seemed more compelling.

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