Housing market

[LinuxRandal]

Brought to you because of "it would have cost how much thread".

Never seen the statistics about how many baby boomers there are. Always heard about how we don't have the capitol to support their social security, do to the numbers of the next generations.

That always made me think of the housing issue. I realize:
1. Multiple generations live at the same time
2. Location can and does make a difference
3. Costs of buying verses building have an effect on used housing.

But, when this post the greatest generation starts dying off en mass, aren't we going to see housing prices drop dramatically?

Then we will see other "corrections" and price changes.

[JR]

But, when this post the greatest generation starts dying off en mass, aren't we going to see housing prices drop dramatically?

Then we will see other "corrections" and price changes.

Nope. The population continues to rise, meaning housing will continue to be had at a premium.

There can be other influences that slow the housing market, though, such as inflation and high interest rates. As long as the US economy remains well-balanced housing will trend higher.

Obviously, my view is that the current housing slump is an aberration.

JR

[vaking]

Babyboomers are defined as born between 1946 and 1964. That means oldest ones just reached 60, youngest are now 47. Average life expectancy is around 80 now. That means you will see them retiring en mass, not dying.

[LinuxRandal]

Babyboomers are defined as born between 1946 and 1964. That means oldest ones just reached 60, youngest are now 47. Average life expectancy is around 80 now. That means you will see them retiring en mass, not dying.

They are shortly (some already) retiring. My mother is 1st gen baby boomer, my father preboomer (gramps served in the army, got out during early part of the war, then was drafted in the Navy). Dying en mass, is down the road (about the same timeframe as mortgages). Since I am almost done with my mortgage, but know of a decent house, I am kinda wondering.... (I can see it's area becoming what mine is, in that timeframe).

[Black wallnut]

Babyboomers are defined as born between 1946 and 1964. That means oldest ones just reached 60, youngest are now 47. Average life expectancy is around 80 now. That means you will see them retiring en mass, not dying.

Check your math! Hey, I'm a boomer and only 43, born Nov 1963! 2007 - 1964 = 43!
So there are actually some boomers, those born after 9-26-1964 to 12-31-1964 that are only 42.

Sorry but I feel old enough, don't need someone adding 4 years.

[JR]

Dying en mass, is down the road (about the same timeframe as mortgages).

LOL! There ain't gonna be no dying en mass!

There was a "boom" in births after the war, but not to the extent that suddenly a huge portion of the population is going to get old and die. In fact, they're threatening to make us live for way too long. I'll be 55 soon, and am planning to live (financially) to age 92. That's 37 more years from now.

Even if boomers did die "en mass", I don't know about where you live, but around here we just don't have people buying a house, living in it for 40 years, then dying. There has been a lot more turnover in the housing market than that. Also, plenty of people move to smaller quarters long before the "end".

I think you're way out on a tangent here. I'd be a lot more concerned about finessing the move to a new house in the current environment, than I would be about the long-term prospects for real estate. Real estate is among the safest, most stable investments you can make.

And if you are thinking down the road 30 years, what's the risk? You'll have paid off the house. Do you want to move to Florida at that time? Well, the market in Florida will for sure not be any stronger if everyone has died!

JR

[scorrpio]

It is not dying that will happen in a wave - it is retirement, as boomers start reaching 65. A drop in income taxes and a rise in social security/medicare. It, however, will be somewhat offset by these retirees beginning to spend their retirement savings.

Far as housing, aberration is not what we have now - aberration is what we had before. Emboldened by low rates and ease with which sub-prime lenders would lend money to anyone who asked, a lot of profit seekers invaded real estate market, driving prices way up and causing many real buyers to pull out. At this point, things are settling back into the way they should have been. As profit seekers keep defaulting, prices will continue to drop until long-term buyers move back in to pick up the slack.

[JR]

Far as housing, aberration is not what we have now - aberration is what we had before.

Ok, I can buy that explanation. In either case it's important to look at the 10, 20, 30 year timelines for value. The last five years, with the big runup, and subsequent drop, are abnormal spikes.

You gotta do a moving average over long periods for real estate. Unless you're a "playa", of course. If you're flipping, it's all about "now".

JR

[scorrpio]

Ain't no flipper here. 30 year fixed with a VERY cozy rate. And treating my house like I'll live here forever. Though likely when the time and price is right, we'll move up to something bigger/better. And eventually, I plan to build my very own.

[jackellis]

There are all kinds of statistics about whether homes are a good investment (as opposed to simply being a place to live) and how they compare with other investment vehicles. I'd keep two things in mind: First, growth rates revert to the mean, so that the last few years of healthy increases will be followed by several years of anemic increases. Second, home prices do go down. It happened in the early 1980s and it's happened several times since. If you're a long-term investor or homeowner, you have nothing to worry about. If you're a speculator, you could get burned.