Posted on 01/18/2008 5:08:33 PM PST by Lorianne
Think the current housing downturn and the subprime mortgage mess is the worst of the housing market’s problems? Not so, according to a report published this month in the Journal of the American Planning Association.
About to wreak havoc on the housing market are the 78 million American baby boomers who will “retire, relocate, and eventually withdraw from the housing market,” according to report authors Dowell Myers, a professor of urban planning and demography in the School of Policy, Planning and Development at the University of Southern California, and SungHo Ryu, an associate planner with the Southern California Association of Governments.
Using demographic data to show that individuals in their mid-60s tend to sell more often than buy, the authors contend that when boomers — a “dominant force in the housing market” — start reaching the age of 65 in the year 2011, a market shift will occur. Some retirees will be looking to downsize, others will relocate to warmer climes, while others will move to nursing homes, says Mr. Myers. As they transition out of the housing market or look to sell their homes, in some states there will be “more homes available for sale than there are buyers for them.” Home prices will soften.
The “sell-off” will create a sizeable hurdle for the housing market, because as Mr. Myers puts it, “It isn’t money that buys property, it’s warm bodies. If you don’t have enough warm bodies to fill up the space, the space stays empty.”
(Excerpt) Read more at blogs.wsj.com ...
More good news for the folks in Michigan, Ohio, and Indiana.
Damn’d old boomers again, don’t blame me, I was born in ‘45.
yep and what will it do when they all start cashing in their 401ks.
The free market will take care of this. Just let it work!
It's the least the aging boomers can do for them while they suck up young peoples' FICA payments.
The second round of boomers is just hitting college. There are as many if not more in the upcoming cohort. I dont think it will be so bad,
THIS IS NEWS?? ANYONE DOING THE HOMEWORK WOULD HAVE FIGURED THIS OUT IN THE NOT TO DISTANT PAST... LIKE WHEN WE GOT THE HELL OUT OF HOME CONSTUCTION AND WENT TO FOOD... GRAIN... LOW COST PRODUCTION.
LOOK FOLKS... WE AIN’T SMART... BUT FOR GOODNESS SAKE... THE FOLKS WHO DID NOT SEE THIS COMING... TOUGH.
AND JUST FOR THE HECK OF IT... GRAIN FUEL WILL BREAK THIS AMERICA AND... WE’RE FARMERS THAT SAY SO. INFLATION??? GRAB YOU STEP-INS.
This kind of article makes me lose respect for the WSJ. The boomers won’t be “out of the housing market” until they go into a group home, or die. All they will be doing in the meantime is moving from one location or size of housing to another, and the “churning” of the market as all these increased transactions take place should make the realtors ecstatically happy.
Yes.
He actually has a point here - and it is valid.
What the article does not mention is what will happen to local and State governments that have become addicted to high property tax revenues.
It is already beginning to impact some of the local townships here in New Jersey. When housing prices took off, townships re-assessed the property and hiked up property tax rates.
It is essentially paying the state "rent" to live on property you own.
In some of the more expensive McMansion communities outside Philadelphia, homeowners can expect to pay $26,000 and up for a house that is anywhere from 3,600 to 4,400 sq ft.
If the house is on one of New Jersey's lovely lakes around here, and they own a bit more land, the cost can be up to $38,000 a year and more in property taxes.
Sweet. Cheaper Houses. Let the prices fall!!!
“What the article does not mention is what will happen to local and State governments that have become addicted to high property tax revenues.”
Don’t worry. They will just raise the rates.
Who sucked up the FICA payments that they have been making for 40+ years?
Not a problem. There are 60 million Mexicans lined up waiting for those houses.
So if we live to long we drain the Social Security system and if we die we mess up market value of homes?
Bump
I agree. When the property sells, the selling price will in most instances go up, and right along with it the properyy taxes for the next owner.
If there’s downward pressure on prices, the houses will get cheaper. If you bought one of those fast-up low quality KHov east coast toothpick palaces in generic prefab neighborhoods, you deserve to be stuck with it and sell it at a loss, you overpaid middle management types!!! Enjoy the “status” while you have it, your house may not be worth sh!t soon.
As a baby boomer looking to retire in a few years and move from PA, I discovered a lot in my research for where to retire. FL, SC and much of NC (and even eastern TN near the Smokies) have already run up much more than the average middle class retiree can afford. Development in many of those areas is not being done aesthetically and with an idea toward land preservation.
If you’re thinking of moving south, do a LOT of research.
The NE is going to suffer, for sure, when the boomers who can afford to go move out.
Don’t worry..the WSJ has a solution....just let more illegal aliens in and give them amnesty.
Don't worry. The Feds will just add a huge new tax on withdrawls from 401ks. You can count on it. Did you really think the government promotion that we can avoid taxes if we invest in 401ks was anything other than a ruse?
So we’ve gone from Boomers wanting second homes to boomers wanting no homes in a span of two years.
I’d say something in the middle is more realistic. Boomers will own a home.
Hey no prob, they can section 8 everything north of the Mason-Dixon and solve the "affordable housing" problem in the big cities.
Boomers will collect a lot more than they ever contributed, plus the contributor-to-recipient ratio is diminishing by the day.
When SS started there were 159 people paying in for every person collecting.
Now there are 3.3 people paying for every person collecting.
How much do you think the younger generation owes you?
If they can't afford to have kids, there will be even fewer people to support you in the manner to which you obviously feel entitled.
You really believe in slavery. You just pretend that you don't.
The already caused the bust by aborting 50 million babies who will never have a chance to buy their homes.
Well, when some joker told me to give them 15% of my salary for the next 30 years and they would give me a million when I was ready to retire. I knew it was a scam.
You can more properly thank the so called "Greatest Generation" for imposing this scam upon all of us.
Boomers will not get their cut as our parents did, and the nonsense will come to an end. Probably rather abruptly in fact.
Indeed, but not before the silverheads of today have milked it for all that it was worth.
That and having given us the likes of Ted Kennedy et al in the process must be what makes them so "Great".
Instead of Boom! Tom Brokaw should have titled his book The Worst Generation. The focus of society since WW II has been on how to make Baby Boomer (My generation. Born in 1946) passage through life ever more comforting and affluent. Great perplexity now exists about what enabling behaviors to legislate concerning health care and Social Security to ensure them a retirement free of financial worries and moral concerns. Now they seem to have a chance to screw up the housing market as they have every other institution and part of the economy.
Baby Boomers have always possessed a great social conscience carefully directed into areas bringing them peer acceptance by costless displays of compassion. Their hijacking of the civil rights movement provides a clear example. The hallmark legislation affirming human equality was the Civil Rights Act of 1964, which became law just as the first Baby Boomers graduated from high school. Eisenhower made the first efforts during his administration only to be thwarted by LBJ and other Southern Democrats. The generations, which came to maturity in the 30’s, 40’s, and 50’s, are the ones, which paid the price and triumphed against formidable opposition.
Baby Boomers have an unprecedented focus on self. With that generation coming of age, the divorce rate first exceeded the marriage rate, and there was first enacted a nationwide Federal Support Enforcement program to track down deadbeat dads. In the 30’s, 40’s and 50’s syphilis and gonorrhea were the widely known venereal diseases. Now over thirty diseases are transmitted, and only professionals can keep track.
The Baby Boomer generation has achieved self-actualization through moral exhibitionism and militant self-absorption, and has strained the survival of this country as much as our Civil War.
Yes. Too bad politicians do not understand the basic principles of economics.
This is why i never invested in Roth IRAs (the kind you pay taxes on upfront, and can withdraw from tax-free). I laughed at our advisor & told him no way in hell would they not be taxing those funds in 30 years.
Huh? You're a Fred supporter and make silly statements like this?
That's what I was thinking. Starting in 2011, I'll have 10-15 years before I retire to scoop up some cheap real estate to pass along to the grandchildren.
I really believe that you are a stone cold idiot and I do not pretend that I do not.
Your illiterate assumptions are ludicrous nonsense with the same worth as the bar swill mopped up at closing time
I don’t care one bit for your generational warfare trash because it has nothing at all to do with the argument.
If you have any nuts to do it, you have the government - which took my money by outright force - return it all, with accrued and compounded interest, and I will gladly opt out forever.
Try to remember little twit, that we didn’t start SS, Roosevelt did, and it was forced on us.
Obviously feel entitled? LOL! Look at my homepage.
I own a Ferrari - soon to be two - aircraft, businesses, and two homes in separate states, and I will gladly take that big 125 bucks a week - to support me in the manner to which I obviously feel entitled LOL! - and put it right towards my kids college funds. - as part compensation for what was stolen from me.
BTW, I worked for every cent. - Started with nothing at all.
Don’t like it? Change the system.
Don’t blame me for the current state of affairs because I am a victim of them.
Just as you believe that you are. And you are right about that - you are a victim of those same things
and I still believe that you are rock hard dehydrated dumb to believe the things that you apparently do.
That will be down to 2.2 by the time I retire, so I just wanted to say thank you, and please take good care of your health.
I guess the baby boomers have close to 12.5 trillion in Mutual Funds across the USA.
I moved my 401k to a safe harbor last Thursday. Changed from a Mutual Fund to a MIF (Managed Income Portfolio).
Bonds, low risk and low yield. I pray I am not sorry but I don’t plan on letting the market rob me and that was what was taking place.
I pray the market finds a way to correct itself. The politicians in DC don’t look very promising.
They even tell you so, if you read the Social Security fine print.
What the man is saying is the house bubble bust will last for a long long time.
How many to a $250,000 home are you calculating.
It’s the least the aging boomers can do for them while they suck up young peoples’ FICA payments.
____________________________________________________
Can you send me yours direct?
Ping list for the discussion of the politics and social (and sometimes nostalgic) aspects that directly effects Generation Reagan / Generation-X (Those born from 1965-1981) including all the spending previous generations are doing that Gen-X and Y will end up paying for.
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That’s why we need illegal aliens.
SO THEY WILL BUY HOMES AMERICANS WON’T BUY!!!!
VOTE McCAIN FOR AMNESTY FOR ALL!!!
SI SE PUEDE
I'm nearing retirement, don't need a large house, don't want to live in this community which has adopted a paternalistic attitude toward its residents, has gone "green" and bought into the "smart growth" agenda.
I'm tired of being told what color my housepaint can be, when I can water my grass or wash my car, what sort of acouterments my pets must have, when I can burn my woodstove, how far off the sidewalk my trees and bushes have to be, when I have to mow or not mow my grass and how to dispose of the clippings, what I do with my soft drink or water bottles, where I can smoke or not, how much I have to pay my employees, and whether or not I can have trans-fat-cooked french fries.
To add insult to injury, I can't even leave the house without being subjected to red light and speeding camera tickets or random roadblocks to make sure I'm wearing my seatbelt.
I'll be looking for a little freedom.
Right now, the leader is Estonia, which is a very sad commentary.
“It is already beginning to impact some of the local townships here in New Jersey. When housing prices took off, townships re-assessed the property and hiked up property tax rates.”
.....same thing when we lived in suburban Maryland...and I had 23 acres that qualified as a agricultural assesment...owned the place free and clear and the taxes were like a mortgage payment in and of itself.
“I’ll be looking for a little freedom.”
....we were too and that’s why we moved to rural NC...and if it gets too crowded here we’ll move again....as long as I’m 20 minutes or less to Walmart I’m happy....I can’t stand the noise and congestion of cities/suburbs any more.
When I read “withdraw from the housing market”, I thought, well, yes, unless we bury them in their houses.
Especially east Tennessee. Don't go there. Just a bunch of hillbillies & hicks down here anyway;).
LOL I was born in 47.
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