Posted on 08/21/2017 9:52:44 AM PDT by ARGLOCKGUY
Competition for housing is soaring, affordability is weakening and the U.S. housing recovery is grinding to a crawl — and, in large part, the baby boom generation is to blame.
No, they're not doing anything immoral or illegal; in fact, they're not doing anything at all, and that is precisely the problem. They're not moving.
Baby boomers, the enormous group born between 1946 and 1964, are staying in their big suburban homes far longer than previous generations did at this age, and that is having repercussions down the housing supply line. If baby boomers don't downsize out of big suburban homes, younger buyers eager to upsize, especially in this improving economy, can't find a home to buy.
The waah, waah, "the baby boomers aren't downsizing" whine is real estate propaganda.
Millennials, in general, don't want big suburban houses, aka McMansions. Sure, there will always be a few who do. But in my area we have plenty of McMansions available, and millenials ain't buyin' 'em.
Cost could be part of the reason McMansions aren't attracting so many buyers; but I think the bigger reason is that millennials don't identify with styles and consumer choices of their parents' generation.
And they also don't want to live long commuting distances from urban centers.
Columbus, Ohio is a good example—dirt cheap housing prices, plenty of jobs...
Some folks have figured it out...
I saw an interesting economic analysis around 2010-11 that addressed another point related to this. The report basically said that the nation's employment picture in the aftermath of the 2008-10 recession was hugely distorted by unemployed people who were ready and willing to relocate to other parts of the country for a good job, but couldn't move because they were stuck in a house with a large "underwater" mortgage.
Between the limits on mobility and the rising property taxes in many parts of the country, that was probably the first time in U.S. history when a lot of people began to realize that their home was a liability, not an asset.
What? That reasoning from CNBC makes no friggin sense. If Boomers were selling high priced large homes and buying smaller ones, they would be taking out the difference in price to go shopping, or traveling, meaning a gross draw out of the housing market.
So now if they are NOT doing that, they are keeping their money sitting in housing, that will do the opposite and forestall an eventual decline.
We’re about to put our house in Cleveland on the market.
I paid 70k 20 years ago and that was a good price then.
If we get 55k for it now, I’ll be pretty happy. At one point, years ago, I probably could have reasonably gotten double that.
That price is actually pretty high. A few years ago, I would have been lucky to clear 40k. The neighborhood crashed hard with the housing downturn, and is now just starting to slowly recover. Hope and change.
Lots of new homes going up in central Florida, fwiw.
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