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I wonder if different parts of the country have differing senior sell-off rates. Maybe the pricier areas like the E and W coasts have more seniors selling than the interior of the country? And the northern states too?
There are all kinds of factors that will mean that there are no more home building frenzies in the future. Fewer children, smaller incomes, more singles than married and families. More people will live in apartments or small homes. Just look at all the folks living in RVs. Also, a lot of boomers bought second vacation homes. Much of that investment was because of rising home prices. People figured that they'd make money on the appreciation. That also will be less common. I think that will suppress home building also.
I wonder if different parts of the country have differing senior sell-off rates. Maybe the pricier areas like the E and W coasts have more seniors selling than the interior of the country? And the northern states too?
Follow the equity. Wealth is becoming concentrated differently by regions of the country. Migration rates in and out differ. So add it all up and every seller needs a buyer. Where wealth is growing and net migration is positive should be a good place to sell. Where wealth is declining and people leaving not such a good place.
There are all kinds of factors that will mean that there are no more home building frenzies in the future. Fewer children, smaller incomes, more singles than married and families. More people will live in apartments or small homes. Just look at all the folks living in RVs. Also, a lot of boomers bought second vacation homes. Much of that investment was because of rising home prices. People figured that they'd make money on the appreciation. That also will be less common. I think that will suppress home building also.
Good points. I think some homes in some areas will have great resale value but not the huge oversized homes that some people have built, and not the vacation homes. My guess is that younger people will want small houses with low maintenance and good school systems in safe areas. The McMansions and other huge houses will be out of reach financially for them and maybe just plain out of style in terms of size. I think the boomer generation will leave a glut of certain types of houses.
Good points. I think some homes in some areas will have great resale value but not the huge oversized homes that some people have built, and not the vacation homes. My guess is that younger people will want small houses with low maintenance and good school systems in safe areas. The McMansions and other huge houses will be out of reach financially for them and maybe just plain out of style in terms of size. I think the boomer generation will leave a glut of certain types of houses.
Good points and many of what we might consider vacation homes are second homes in desirable areas where other people live year round. In some cases at retirement they become the main home and the former primary residence sold. I mentioned growing wealth and increased migration because that often creates the market for larger homes which have often been leading the non investor single home sales. In some markets it was the lower and upper end that rebounded first.
I don't know how younger people are buying homes when most I know are up to their elbows in Student Loan Debt. Get out while the getting is good since in a few years, the market will tank again because fewer buyers will be able to qualify for mortgages.
The baby boomers have just barely started to retire. The largest number of baby boomers were born in 1957. Many of those who did not save may end up selling their homes (or downsizing) to fund their retirement. Wealthier ones will also be downsizing. The millenials do not have as much money and may prefer smaller homes that are closer to more urban areas with walkability. Some estimates are that this will cause a housing bust around 2020 with a glut of large and suburban homes on the market. Also interest rates may rise and drive down home prices.
The market in Rhode Island (where we lived until June 2014) was horrible for a home with over 2,000 sq ft and a cost of about $300K -- and that was what we had. So we solved the problem another way.
We "gave" the house to one of our daughter's families. They had been renting for the past 15 years. We had owned the house outright, which made things easier. When all was said and done, they took over the house with no down payment and a mortgage of $100K, which they could comfortably afford. The remainder of the equity will be an early inheritance for that daughter. The other daughter has received other assets approximately equal in value, for her inheritance.
This way, my family is now in good shape, and we side-stepped the "problem" of selling the house in a chronically-poor state, made worse by a bad economy. We are now in Maine, and lovin' it!
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