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Baby Boomers Buying Baja

By Patrick Osio, Jr./HispanicVista.com

  April 2, 2007

 

  

 

Baby Boomers Buying Baja

By Patrick Osio, Jr

 

The Active Adult segment of the US population those born between 1946-1964, referred to as Baby Boomers, are poised to become the largest minority group in the US. According to the Census Bureau there are 78.2 million baby boomers as of July 1, 2005 a whopping 28% of the US population. In 2006, the eldest of the group turned 60 at a daily average of 7,918 a day.

 

An Associated Press survey found that most boomers expect to retire around age 63 — but 66 percent of them expect to work for pay after retiring. Forty-three percent will do so because they want to stay busy, 27 percent say they'll keep working to make ends meet and another 19 percent will work so that they can afford "extras."

 

Baby Boomers are a different breed from previous generation of retirees. The Active Adult is over 50 years old, highly independent, physically fit, environmentally conscious and socially active. They have a wide range of physical interests such as golf, tennis, swimming, running, dancing, winter sports and they travel with gusto.

 

They actively participate in staying healthy not relying entirely on their health providers to set the course for them. Their mantra is not based on life expectancy but rather on stretching longevity with quality of life.

 

And, it is the Baby Boomers who are fast becoming the greatest real estate opportunity ever – both for the US and for other countries. And Baja California coasts on the Pacific and Sea of Cortes attest to this growing phenomenon.

 

Though there have always been several options, previous retiree generations, as a majority, remained in the home where they raised families. Not the Baby Boomers – they are in great numbers considering the various available options, which are:

 

·        Stay put – as previous generations have done is the easiest decision.

·        Downsize in the same general area – empty nesters going to single story smaller homes or condos. Or move to adult living developments in the same general area.

·        Move to another city or state – a harder decision, but Baby Boomers are willing if the community provides the life style they seek and is economically within their budget.

·        Move to another country – a mega decision, but Baby Boomers are not dissuaded by previous generation’s fears.

 

The first two choices are the easiest in the decision making process, and the majority of the Baby Boomers will choose one of the two. This is particularly true in communities that offer adult living communities with ample amenities and activities and are affordable.

 

The fourth choice, moving to another city or to another state is a tougher decision since it also means leaving behind old-friends and family members and socially starting all over again. To the credit of numerous US adult community developers who have and are building some nice to ultra nice such communities and are very savvy marketers, this choice has gained in popularity over the years and is expected to continue at a 15 to 20 percent annual growth.

 

The fifth choice, moving out of country, is by far the toughest choice option.

 

Baby Boomers, whose net worth is high without using the equity in their home to bolster their financial statement, consider moving to another country but typically keep a smaller condo or home in their home town as their “headquarters.” They are part time foreign residents. They seek comfort with a foreign accent and the best amenities available. The amenities must already be in place, not at some distant point in the future. If they play golf, they want golf courses; if they have a boat of consequence, they want a marina; if they play tennis, they want tennis courts; if they want to be pampered and spoiled, they want the facilities in place.

 

But for the vast majority of Baby Boomers, retiring in a foreign country requires a great deal of thought, and planning. A major part of the decision is made based on economics or affordability. For most it means cashing in on the equity of their long term residence, and using their Social Security payments as part of their total retirement funds.

 

The North Baja coast – Tijuana to Ensenada – does have some upcoming developments that will attract the affluent Baby Boomers, but the vast majority of the better than 18,000 condos-homes in some stage of construction or pre-construction, is aimed for today’s second home buyer, tomorrow’s retiree, and to those ready to retire now. 

 

To most it’s about affordability and being able to stretch the retirement income while enjoying a quality of life that would be unaffordable in California or most other parts of the US including desert areas where the heat ranges over 100 degrees for 5 months a year.

 

California’s age 65 or over stands right around the 4-million. In Southern California the largest concentration of this age group live in Riverside County with over 14% of their total population. San Diego County’s 65 or over population is around 105,000 about 10% of the total. Los Angeles County has around 400,000 or about 10% of the total population. Taking into consideration that around 90% of the total 65 or over in Southern California would for whatever reasons, not move to Baja that stills leaves over 50,000 potential move to Baja Baby Boomers that may be attracted. When further considering that just the Western states have over 7-million 65 or over population that provides around 700,000 prospects for moving to Baja or obviously other parts of Mexico.

 

Moving to a foreign country is not for everyone, it takes some getting used to a different culture, language, and daily little nuances that some may find annoying. Mexico is no exception even though there are plenty of Americans already living there, not everyone of them has found it to be the Shangri-La brochures promised.

 

For those seeking a change in life style, they find it, and in most cases where the retirement income is at $4,000 a month, they find that income provides the equivalent of $7,000 to $8,000 California life style. Those savings coupled with the lower cost of homes and annual property taxes that are a fraction of the same costs in California, makes the decision to move much easier.

 

But still, property values along the coast are high in comparison to the affordability of many US retirees though a tremendous bargain compared to US coastal property costs. But bargains are only as good as one can afford to take advantage of them.

 

Home and condo developments along the Baja coast providing ocean views from the east side of the scenic Tijuana-Rosarito-Ensenada toll highway tell much of the story. The Park at Malibu of 43 units sold out in 4 days. The 1,600+ square foot residences of good quality were selling from $190,000 to $239,000. The developer’s new project next door, the Waterfalls at Malibu is also priced along the same amount and already there is a flurry of activity to gobble them up. San Marino a little further south of the Malibus, is also selling rapidly because they are true affordable by more people bargains.

 

The more expensive and upscale, $350,000 to $600,000, ocean front residences are moving slower. Of course, slower can mean different things to different folks. Diane Gibbs, owner of Realty Executives in Rosarito (south of Puerto Nuevo) lamented to a reporter that things were slow, “We only sold 8 homes over the weekend.” How many San Diego realtors would love to have that problem?

 

As more and more Baby Boomers enter the age of retirement and the cost of living continues to increase in the US, the Mexico option becomes more viable particularly if planned community developments away from the expensive coastal corridor come on line. There is nothing wrong with back-country views, as many San Diego communities can testify.

 

So look for affordable housing along the fringes of Valle de Guadalupe and Tecate as two examples of what is yet to come – Baja will be Baby Boomer Country

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Patrick Osio, Jr. is the Editor of HispanicVista (www.hispanicvista.com) and columnist with the San Diego Metropolitan Magazine (www.sandiegometro.com).

 

(The opinions expressed by Patrick Osio, Jr. are solely his and do not necessarily reflect those of HispanicVista.com, editorial board of advisors or it’s contributing writers.)

Patrick Osio, Jr. has written a short but intensive manual on the Mexican perspective on numerous issues between our two countries. The manual is an in depth primer on the culture and protocol for better understanding Mexicans that in turn allows establishing personal and business relationships, and how to avoid the most common faux pas that can ruin relationships and business deals.

The manual is available through Electronic delivery for $9.95 making it possible to download the manual for save on your hard drive, printing its entirety or particular sections while reaping considerable savings over printed copies.