Skip to comments.Why Baby Boomers May Bust the Housing Market
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 markets 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 isnt money that buys property, its warm bodies. If you dont 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.
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?
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.
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