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Aging Baby Boomers and the Generational Housing Bubble: Fore

 
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Mon Jun 07, 2010 7:46 pm GMT    Post subject: Aging Baby Boomers and the Generational Housing Bubble: Fore Reply with quote

Aging Baby Boomers and the Generational Housing Bubble: Foresight and Mitigation of an Epic Transition

Don't have time to read the whole thing right now but looks good. I particularly like the in depth discussion of inter-generational issues and the large amount of data shown.

Quote:

Although prices increased in virtually every state between 2000 and 2005, the spikes in some states are clearly evident. The already high-cost states of California and Hawaii became nearly twice as expensive between 2000 and 2005, with median housing value increasing to roughly 9 times the median income of young adults. A second tier of expensive states, with ratios of 5 or greater, includes Nevada in the West and Massachusetts, Rhode Island, and New Jersey in the Northeast.


Also check out the diagram showing the state crossover ages. MA is quite young at around 55 so we just need to see the age distribution by town to get an idea of how housing will perform in that area in the future.

Then there's the chart showing which years the sellers will exceed buyers and for MA that's 2011 - 2015.[/quote]
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john p



Joined: 10 Mar 2006
Posts: 1820

PostPosted: Mon Jun 07, 2010 9:11 pm GMT    Post subject: Reply with quote

Check this out though:

http://www.migrationinformation.com/DataTools/graphs/pyramid_1.shtml

The Babyboom had kids, and those kids are the "Echo-Boom". Add to them the surcharge of Immigrants and it is not that far off from being balanced. The diaspora of retirees might also get delayed as people are forced to work longer (especially in careers that aren't as physically demanding..).

http://www.cis.org/articles/2007/back102.gif
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balor123



Joined: 08 Mar 2008
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PostPosted: Mon Jun 07, 2010 9:38 pm GMT    Post subject: Reply with quote

Qualitatively, your argument seems reasonable but the numbers you referenced to still shows a significant shortage of buyers. Immigration could make up for it but only if it increases over where it has been over the last 3 decades (already factored into these numbers), which seems unlikely for a number of reasons. First, the conditions of many emerging markets are improving and many of them are now returning home. Second, US unemployment is high and expected to be so for a while, which discourages people from wanting to come here (that graph stops at 2007) and discourages voters from supporting high immigration. Workers will work longer but only if they can find/keep jobs and are physically able to. Even for jobs which aren't physically demanding, there's a good reason for retirement - your health starts to suck. I don't think the vast majority of them will be able to work much past 70 years old.
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GenXer



Joined: 20 Feb 2009
Posts: 703

PostPosted: Tue Jun 08, 2010 12:26 pm GMT    Post subject: Reply with quote

Somebody is making predictions based on past/current data. I'd like to see how close these end up to reality. I wouldn't trust anybody making such long-term predictions. And I trust even less somebody who's making accuracy assumptions by providing no uncertainty in their numbers. I wouldn't necessarily trust these results however plausible they may be.
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admin
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Joined: 14 Jul 2005
Posts: 1789
Location: Greater Boston

PostPosted: Sat Jul 06, 2013 8:22 pm GMT    Post subject: Reply with quote

I came across this post from 2010 again today because a spam-bot / spammer posted in this thread (now deleted). The original link is now defunct. However, I found another copy of the paper here:

http://www.scag.ca.gov/housing/pdfs/trends/agingbabyboomers_ghb.pdf

I actually read it all the way through this time too. Very interesting read. The authors do note that the effects of the generational shift could easily take two decades to play out, so I'm not going to hold out for 2015 in the hope of a sudden price drop. However, they note six other states that are ahead of Massachusetts in the timing of the shift by about 5 years, three of which are in the Northeast too (CT, NY, and PA). I think it would be interesting to keep an eye on those states as a leading indicator for MA, with respect to the impact of the projected demographic shift.

- admin
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Thu Jul 11, 2013 5:39 am GMT    Post subject: Reply with quote

Funny to see my old post revived. There's still time for this to play out! I'd love to see an update to the data, though I could have sworn the range was 2020 - 2030 from memory. Boomers can only hold out for so long before their estates start acting for them. Still, there's too many variables to know what the outcome will be.
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admin
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Joined: 14 Jul 2005
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Location: Greater Boston

PostPosted: Fri Jul 12, 2013 7:25 pm GMT    Post subject: Reply with quote

Maybe you mentally added on some years to their time frame. They did project that the threshold crossing would begin in Massachusetts by 2015 but also stated that it could easily take two decades for the bulk of the effect to play out.

- admin
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balor123



Joined: 08 Mar 2008
Posts: 1204

PostPosted: Mon Jul 15, 2013 4:33 pm GMT    Post subject: Reply with quote

That's probably it. I did a lot of research back then - may have seen some data elsewhere as well. I came across a topical post on the Austin city-data forums recently:

Quote:
cities grow or die. Zero population growth isnt good for the world.


Not surprisingly, lots of anti-growth talk on the Austin city-data forums. Funny I never really visited the Boston city-data forums.
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