Posted on 08/15/2017 6:42:18 AM PDT by Lorianne
Older Americans own half of the houses in the market. Many are simply refusing to sell and others have adult “kids” moving back in since they can’t afford a place to rent or buy. It is a Catch 22 and many people are looking at countries like Italy where the number of adults that live at home is enormous. Multi-generational families just don’t coincide with the “rugged American” worldview where you go out on your own and you make it with your own two hands. Of course, many house humpers had mom and dad chip in but that doesn’t make for such a sexy story. In the end, however there are many baby boomers that simply are not selling. This is actually an interesting problem that is not going away.
Refusing to sell
Housing used to be a young person’s game. The U.S. housing market and to a large extent, the economy was driven by home buying and big ticket purchases. But that has definitely changed since the housing market imploded with the 2000s. It has also changed in terms of people marrying later, having fewer kids, and basically preferring to live in city centers versus suburbs. In other words, not a big need for McMansions.
The oldies but goodies are now occupying a larger share of housing:
Over half of homeowners in the U.S. are now 55 and older. And this figure is only going to grow over time. In places like California, the Taco Tuesday baby boomers own the housing market. This is just a fact and has kept inventory to a very low level.
But housing has gotten more expensive across all U.S. metro areas so this is a much larger trend. It has absolutely crushed the available inventory out on the market:
SNIP
I've never researched the definition of "mortgage" but I've been told it literally translates into "death grip." Even if that's not what it translates into, it's true.
Move to Maine or Lawton OK...things are quite affordable.
Oh well.
There are financial planners who can make a case not to pay off the mortgage because it is ‘cheap money’; personally I don’t agree with them.
First, this is only really happening in a few cities. Second, there is an absolute explosion of apartment building construction. Anecdotally, in my city area, just about any vacant space is now undergoing apartment complex construction. One nearby apartment complex is advertising rents between $1,200 and $2,300 per month and I’m not sure what that includes (parking, etc.).
At $6,000 a month to live in an assisted living facility, it’s smarter to stay in your paid-off home. And those overgrown kids who are sleeping in their old rooms will have a place to live after mom and dad are gone.
Well, let's just see what Antifa and BLM have to SAY ABOUT THAT!
They're just gonna have to start dragging those wrinkled old while people outta their houses and giving the properties to more deserving folks of color.
All one has to do is a little math.
Take your mortgage payment and multiply by 12 and write that number down on a piece of paper.
Now, go get your tax return from last year and re-do it without figuring the mortgage interest deduction.
Which number is bigger?
Do that.
You and I must live in the same neighborhood.
Also the property tax...tends to go up each year.
We owe a small amount on our house..
It cost $135,000.
It’s worth quit a bit more than that now.
We property manage two houses on our street, the monthly rent on the two bedroom is $1,950 per month...
“Death grip?” Sheese!
There are financial planners who can make a case not to pay off the mortgage because it is ‘cheap money’; personally I don’t agree with them.
we are 65 and been married for 42 years. we love where we live, quiet but within walking distance of food store, hardware store, liquor stores, rec center and gym, park, bike paths, library, book store and half a dozen restaurants and close enough to Denver for symphony and ball games. why move?
if we won the lottery i doubt we would move BUT we would probably renovate the house out of the neighborhood price range but HEY we’re rich who cares.
In many states like Texas older homeowners property taxes are locked in once they hit 65.
If they sell... they would have to not only pay taxes on the appreciation... but they would have to buy somewhere else at the going tax rate and valuation.
Thus, they are just choosing to stay forever.
The best thing for a senior to do is buy the biggest mansion they can afford just prior to turning 65. Then let their family move in with them and have everyone share in the advantage.
The cheapest living is in a house you own free and clear.
I moved from a house I lived in for 35 years to a house that I helped build for my parents in 1975.
I don’t plan to stop living in it until I could no longer can hopefully die in my sleep in it.
Of course it is a really nice piece of rural property land water and trees good hunting fishing and survival potential.
What’s not to like.
I work in land development...ie my livelihood depends on people buying new houses. However, I am deeply suspicious of any article that bemoans either a surplus or shortage of housing, and implies in any way that ‘somebody’ should do ‘something’ to correct it. The market will do its thing, if you let it.
You can’t take your mortgage payment and multiply by 12 because that includes both capital that you’d have pay somehow anyway and interest which is the part you’d avoid by not having the mortgage. Use the interest as the basis for comparison.
Its a little more complex than this, and it really depends on where you live, what current rents are going for. In my area it is $500-600 dollars cheaper to pay a mortgage. I do agree one should never buy a home because of the tax deduction feature.
What we see is that the older Northeasterners keep their homes, buy a 2nd home down here in Florida. However, they have no intention of permanently moving south. Ultimately, they sell the Florida home and return home permanently to be around the kids, grandkids, and to have someone who can come and look in on them from time to time.
The people who are moving a lot are 20-45 YOs for employment. You hit 45, you start to stay put pretty much.
Housing shortage is NOT based on the gray hairs not selling but OMG land use controls stopping new development in many states, municipalities. For example, California has made it horribly expensive to even remodel a home, let alone build new.
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