Tom Kelly: Have boomers truly changed their ways?

Unlike the Greatest Generation, baby boomers have never been labeled as risk-averse. They take chances, look for adventure and are generally positive about the aspects of aging.

They over-borrowed for homes, cars, tuitions and vacations, leading Eric Snider, who holds a doctorate in social psychology and once served as Shea Homes’ marketing director for Trilogy, the company’s upscale active adult communities, to say “baby boomers never met a loan they didn’t like.”

Didn’t the mortgage meltdown and subsequent fragile economy change all that? Aren’t all age groups (or “cohorts” as the marketing folks prefer to call them) playing it closer to the vest?

Two new studies revealed a bit of the tight-fisted while leaving the door open to the adventuresome. The most recent Associated Press-LifeGoesStrong.com poll found the 77 million-strong generation born between 1946 and 1964 is increasingly worried about retirement and their finances given the economic crisis of the past three years. In fact, just nine percent say they are strongly convinced they’ll be able to live comfortably in retirement.

However, a new survey from Coldwell Banker Real Estate showed that boomers held a strong desire for investment properties and second homes despite not being able to sell their primary residence.

“The baby boomer generation has driven the U.S. economy for years, and like many Americans, they may be anxious about their next real estate decision,” said Jim Gillespie, chief executive of Coldwell Banker Real Estate. “I know baby boomers are a very diverse group and cannot be described in generalities, but our survey clearly indicates that those boomers who are financially secure are actively seeking to buy their retirement home, or a second home, and they are taking advantage of the opportunities and value available in today’s market.”

The important term is “financially secure.” Boomers have been known to confuse borrowing power with real wealth. It has gotten them into trouble in the past via Option-ARM loans boomers took out to buy a larger home (or second home, car, gold trinket) than they could afford.

Thankfully, those loans are no longer available because very few borrowers ever converted the “option” into a fully amortizing loan that paid off the house in a specific timeframe. Boomers were, by far, the biggest audience for Option ARMs.

“Baby boomers have been hit hard by the housing downturn,” said Stan Humphries, chief economist for Seattle-based Zillow. “Many in this generation had once thought of their home as a key element of their retirement strategy. However, as the value of their primary residence declined, so did their retirement resources.

“On the brighter side, those boomers who have the means to purchase a second home today are in a much better position than home shoppers in 2006. Today, shoppers have access to record low mortgage rates and can purchase a home for prices not seen since the early 2000s.”

According to the AP poll, about 6 in 10 baby boomers say their workplace retirement plans, personal investments or real estate lost value during the economic downturn. Of this group, 53 percent say they’ll have to delay retirement because their nest eggs have dwindled. A total of 73 percent of those polled said they would keep working, up from 67 percent in the AP poll in March, a greater percentage than any other generation.

The losses include home prices that have dropped by a third nationwide over the past four years and have left boomers anxious about moving and selling their homes.

John Tuccillo, former chief economist for the National Association of Realtors and one of the nation’s astute housing analysts, says some boomers still have the itch to experience “what could be” but are stymied by the slow moving housing ladder. They simply can’t sell to take the next “rung of the ladder.”

“Baby boomers face a divided market,” Tuccillo said. “Their primary residences are in places where demographics and market changes make them hard to sell. Yet, because of the deep discounts now available in Sun Belt states like Nevada, Arizona and Florida, second homes – either as investments or potential retirement locations – are compelling buys.”

What has not changed is that boomers remain unpredictable.

“Baby boomers are famous for believing one thing and then behaving totally different from what they think they do,” said Snider. “What they do want is personal experiences. Boomers are all about personal experiences.”

And those “wants” got many boomers in trouble in the past.

Tom Kelly’s new E-book “Bargains Beyond the Border: Get Past the Blood and Drugs: Mexico’s Lower Cost of Living Can Avert a Tearful Retirement” is available online at Apple’s iBookstore, Amazon.com, Sony’s Reader Store, Barnes & Noble, Kobo, Borders Books, Diesel eBook Store, and Google Editions. It mirrors a recent article by CNN on the benefits of the country, including increased rental possibilities.