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I said this in another comment, but I wanted to respond to nybbler directly.
What you're forgetting is this: the houses in question are mostly the same age as the Millenials themselves. So by the time Millenials are financially mature enough to afford 2500+ square foot homes (assuming this even happens, and considering that most boomers themselves couldn't afford them until their 40s) the structures cannot be expected to last an additional 30 years, or the length of a standard mortgage. And even if they do, what chance is there that these houses will have retained their re-sale value after aging 70 years or so? Millenials will see this coming, and will largely choose not to commit to houses that are essentially on their death beds.
It's pretty common knowledge that houses from the 80s and 90s were not built to last 70 years, although if you can find evidence to the contrary, I would be eager to know of it.
I have no idea where you picked up this bit of misinformation. Houses built after the adoption of building codes have an expected life span much longer than the houses built previously. They have adequate foundations, good clearance between ground and wood, subfloor and attic ventilation, decent insulation and numerous other upgrades that make them much more durable. If nothing else, abandoning the old cast iron drains in favor of plastic was a huge step forward.
Yes, there are still areas where junk is being built. If you can believe it, Louisiana didn't have a state building code until Katrina leveled the whole gulf coast. With the evidence right in front of them, the legislature finally adopted one. However, most states have adopted the International Building Code, and their houses will stand as long as somebody keeps a roof on them.
Boomers have also invested a lot of money in correcting the inferior building practices of earlier times. The old leaky single pane windows are gone, the corroded galvanized plumbing has been replaced with PEX, the antique, inadequate wiring has been completely redone, the whole house has been jacked up and a decent foundation stuffed under it, not to speak of cosmetic corrections to floor plans, kitchens, etc. The cost of renovations on those century old money pits has far exceeded the original construction costs, even adjusted for inflation, but in many cases the result has been a habitable house with modern amenities.
I said this in another comment, but I wanted to respond to nybbler directly.
What you're forgetting is this: the houses in question are mostly the same age as the Millenials themselves. So by the time Millenials are financially mature enough to afford 2500+ square foot homes (assuming this even happens, and considering that most boomers themselves couldn't afford them until their 40s) the structures cannot be expected to last an additional 30 years, or the length of a standard mortgage. And even if they do, what chance is there that these houses will have retained their re-sale value after aging 70 years or so? Millenials will see this coming, and will largely choose not to commit to houses that are essentially on their death beds.
It's pretty common knowledge that houses from the 80s and 90s were not built to last 70 years, although if you can find evidence to the contrary, I would be eager to know of it.
Seriously? Where is this coming from?
Since the 1950s, when I was a kid, I've heard people say "They don't build 'em like they used to; these houses won't last 20 years, blah, blah". However, most all seem to be standing right where they always were; in fact, "mid-century modern" is quite hip right now with some people. My little town is full of houses built from the mid-70s through 1990s, all are holding up just fine. My own house was built in 1980 and there is absolutely nothing structurally wrong with it. We replaced the roof a few years ago, mostly to get rid of the wood shakes which have been declared a fire hazard and are no longer allowed anywhere in Boulder County, CO. We replaced the original furnace last month; it lasted 34 years.
Many Millennials will be 40+ in 10 years or fewer. These houses should appreciate like all other housing.
ETA: I started this post just before 8 AM; then went out walking with some neighbors. Imagine that! While I was gone, several people (jm31828 and Larry Caldwell) have posted some most excellent responses.
The only "real" solution the article recommended was getting out NOW. My parents are in their early-to-mid 60s, living in a 3000 sq ft house in the suburbs by themselves, and I worry. They're never going to turn it into co-housing or condos or anything (even if it was a workable solution it would be more expensive than just short-selling.) And it largely won't be workable because the one major cultural factor the article didn't mention is that Gen Xers and Millenials by and large don't WANT to live in those neighborhoods. Even if the housing was more appropriately sized/priced, the cul-de-sac just doesn't have the same cultural appeal that it used to.
One more point to consider is that these houses were not built to last 100+ years. Our 1000 sq ft house is at least 110 years old, and doing great. But most of the houses built in 1980 were essentially made of toothpicks, and will turn 35 next year. Will they really last 50 years? 60? And who wants to take out a 30 year mortgage on a house that can only be expected to last 25?
I'm afraid that 20 years from now we'll look back as a society and conclude that we might as well have just dumped a trillion dollars in the ocean.
What are you worried about? Your parents are probably still in the workforce. They're young by the standards of "elderly". While 3000 sf seems large, so what? DH and I are empty nesters of the same vintage; our house is about 2200 sf and while it's more than we really need, we don't want to go anywhere else, either.
This crazy idea that houses are more poorly built now than 110 years ago is, well, erroneous. Your house was probably built with single-pane windows, something that was common here in Denver until the energy crisis of the 1970s. It probably has minimal insulation. Either the kitchen was redone to the tune of at least $20K, or you have to do it for same. Ditto the bathrooms.
My wife and I have plans in place to deal with being too old to drive. We live in the country on 93 acres, and it will become too much for us to handle before we have to give up our driver's licenses. We plan to sell out and move into assisted living in town. The proceeds from sale of our home should be adequate to fund assisted living for the rest of our lives. That's what the old couple we bought from did.
This is basically what we did. It went in the banker's pockets, not the ocean...
There is the trillion dollars that went into bankers' pockets, yes. But there's another trillion dollars (or more) that we have just torched, as a society, by building entire cities with no integrity, sustainability or timeless appeal. We might have enriched two generations of bankers instead of just one. Better yet, we might have built the foundation for a legacy of prosperity that would benefit those at every level of our civilization. Instead, posterity will look back at the United States and say, "At her height she was by far the richest nation in history of the world."
My wife and I have plans in place to deal with being too old to drive. We live in the country on 93 acres, and it will become too much for us to handle before we have to give up our driver's licenses. We plan to sell out and move into assisted living in town. The proceeds from sale of our home should be adequate to fund assisted living for the rest of our lives. That's what the old couple we bought from did.
I'm glad you have a solid plan. I doubt the value of 93 acres of (arable) land will ever be called into question, so you don't have to face some of the potential hazards of many of those currently living in the suburbs.
And to respond to some others: Even if you're very optimistic about a) the condition of the 80s and 90s houses, and b) the ability/desire of Millenials to purchase these houses, it's impossible to reckon with the gap that will be encountered. Within 10 years at least half of the Baby Boomers will be 70 years old, and needing to sell their larger homes. Generation X is too small to create a real market for these houses, and Millenials will just barely be entering their 40s.
It would take an extreme amount of optimism to suppose that this generation (which is largely eschewing ownership values in favor of a "subscription mentality") will respond enthusiastically enough to the glut of large suburban houses on the market to keep prices anywhere near where their sellers want them to be.
There may not be a catastrophe, I'll admit. But at the very least there will be a substantial drop in the prices of large suburban homes, which is likely to spoil many families' only hope for a retirement nest egg.
I said this in another comment, but I wanted to respond to nybbler directly.
What you're forgetting is this: the houses in question are mostly the same age as the Millenials themselves. So by the time Millenials are financially mature enough to afford 2500+ square foot homes (assuming this even happens, and considering that most boomers themselves couldn't afford them until their 40s) the structures cannot be expected to last an additional 30 years, or the length of a standard mortgage. And even if they do, what chance is there that these houses will have retained their re-sale value after aging 70 years or so? Millenials will see this coming, and will largely choose not to commit to houses that are essentially on their death beds.
It's pretty common knowledge that houses from the 80s and 90s were not built to last 70 years, although if you can find evidence to the contrary, I would be eager to know of it.
Quote:
Originally Posted by Larry Caldwell
I have no idea where you picked up this bit of misinformation. Houses built after the adoption of building codes have an expected life span much longer than the houses built previously. They have adequate foundations, good clearance between ground and wood, subfloor and attic ventilation, decent insulation and numerous other upgrades that make them much more durable. If nothing else, abandoning the old cast iron drains in favor of plastic was a huge step forward.
Yes, there are still areas where junk is being built. If you can believe it, Louisiana didn't have a state building code until Katrina leveled the whole gulf coast. With the evidence right in front of them, the legislature finally adopted one. However, most states have adopted the International Building Code, and their houses will stand as long as somebody keeps a roof on them.
Boomers have also invested a lot of money in correcting the inferior building practices of earlier times. The old leaky single pane windows are gone, the corroded galvanized plumbing has been replaced with PEX, the antique, inadequate wiring has been completely redone, the whole house has been jacked up and a decent foundation stuffed under it, not to speak of cosmetic corrections to floor plans, kitchens, etc. The cost of renovations on those century old money pits has far exceeded the original construction costs, even adjusted for inflation, but in many cases the result has been a habitable house with modern amenities.
Quote:
Originally Posted by Katiana
Seriously? Where is this coming from?
Since the 1950s, when I was a kid, I've heard people say "They don't build 'em like they used to; these houses won't last 20 years, blah, blah". However, most all seem to be standing right where they always were; in fact, "mid-century modern" is quite hip right now with some people. My little town is full of houses built from the mid-70s through 1990s, all are holding up just fine. My own house was built in 1980 and there is absolutely nothing structurally wrong with it. We replaced the roof a few years ago, mostly to get rid of the wood shakes which have been declared a fire hazard and are no longer allowed anywhere in Boulder County, CO. We replaced the original furnace last month; it lasted 34 years.
Many Millennials will be 40+ in 10 years or fewer. These houses should appreciate like all other housing.
ETA: I started this post just before 8 AM; then went out walking with some neighbors. Imagine that! While I was gone, several people (jm31828 and Larry Caldwell) have posted some most excellent responses.
Damn straight I'm not convinced! "Old" housing has always had a certain charm. It's sort of like the "City Mouse vs Country Mouse" argument. There are people who prefer both. You cannot argue, honestly, that is, that older homes are better constructed and insulated than newer homes. The building codes have been tightened over the years. Heck, even with my house, built in 1980, when we remodeled the basement, the windows had to be dug out more for egress. That was not part of the code in 1980. It makes the basement safer.
People have commented that millennials will not want to live in all of these suburban houses. I don't think that is true at all- it's a proven statistic even today that a segment of young people like to live in the hustle and bustle of the city but when they get a bit older, especially when they get married and have kids, they move out to the suburbs. Their wants and needs won't be any different than they are for people today, or 5 years ago, or 20 years ago- they will be looking for homes that are the size they need in locations they need or want. Sizes of these homes are of no concern, as the wants and needs of young families are across the board- some want large homes 3000 square ft. +, and some want smaller homes 2000 sq ft or less, and that is fine- there are plenty all across these size ranges to choose from that will eventually be on the market when these boomers move on. Some will be in great shape, some will need renovation- again just as countless homes are today in varying neighborhoods that people buy. Some young people like to buy older homes that need some work to look and feel just as they want the home to (and often getting a better price point by doing so), and others want brand new, ultra modern move-in ready- that will be the case now and forever. I don't understand why people think there is some issue with these homes or with the desires of those who will eventually be in the market for them?
I think as metro areas get more crowded there will be less new development as those new areas will be even further out from job centers, so if anything, these homes being left behind by the boomers in established neighborhoods will be even more desirable.
Edit- and as Katiana said, the ages of these homes are also of no concern. Homes built now or in the last 20 years are not worse than ones built 50 or 100 years ago- structurally they are very similar and a lot of the details such as windows, roofing, insulation, etc. are even better due to stricter code requirements now than were in place back then. Homes built at any time will go through cycles where they need things done to them- siding replaced, roofing replaced, etc- these homes should last a very long time as long as they are well maintained.
Damn straight I'm not convinced! "Old" housing has always had a certain charm. It's sort of like the "City Mouse vs Country Mouse" argument. There are people who prefer both. You cannot argue, honestly, that is, that older homes are better constructed and insulated than newer homes. The building codes have been tightened over the years. Heck, even with my house, built in 1980, when we remodeled the basement, the windows had to be dug out more for egress. That was not part of the code in 1980. It makes the basement safer.
I will never argue that an old house was better insulated than a newer house, unless that old house was gutted, and insulation installed.
Last edited by JR_C; 07-29-2014 at 10:53 AM..
Reason: clarification
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