Are you getting the feeling that our low-inventory conditions are here to stay?
Our local Case-Shiller Index has risen 59% since April, 2009, and fewer people are selling? Instead, they appear to be riding into the sunset.
Consider these boomer stats from wiki:
- 60% lost value in investments because of the economic crisis
- 42% are delaying retirement
- 25% claim they will never retire (currently still working)
For those who moved up a couple of times, their current house is the best they’ve done, and is good enough to last them. There isn’t a compelling reason for boomers to move if they bought low, and the house is paid off or refinanced into an ultra-low rate.
Baby boomers are currently 53 to 71 years old, which should mean they could move if needed. They just don’t want to.
If things got tough, it’s more likely they would share with the kids. Either have a kid move in and help with care-giving, or go live with a child.
My mom is moving in with us this month.
My dad died in 2010, we sold their house, and mom has been on the move ever since. She tried living on her own, but that was boring, and then recently she lived with my little brother, which everyone will tell you is no picnic. She lasted 14 months with him, which is more than I would have!
But even with a life-changing event, there’s no change to real estate. Mom’s house was sold long ago, and we don’t need to move to accommodate her.
We’ll all just get along instead!
As baby boomers keep aging, many, if not most, will find a way to make do with what they have, rather than move. Upon their demise, one of the kids are more likely than ever to inhabit, rather than sell.
The rapid ascent of prices haven’t helped either – it’s probably one of the main reasons don’t want to move. It’s too expensive, compared to what they have, and they’d rather find a way to stay put.
I think Prop 13, god bless it, likely plays a role. Once a property that’s been owned a long time is dumped, your property tax life is reset. Moving laterally to another property within the 90 day timeframe to keep your Prop 13 can be very stressful, since an incompetent broker can leave you hanging out to dry. Also, holding onto the home until after the folks are gone saves a lot of taxes. Folks 50 and over don’t like playing poker with their secured housing arrangement, so would more likely stay put, and work around helping parents while keeping the property.
Looks like old Southern Cali is going to have an existential traffic jam in housing in prime areas for the next 10 years, imo.
Funny story, we have rentals and are noticing a big uptick in trustifarians applying. Kids who barely know how to write a check, much less fill out a rental application, are applying, and our rents, tho not that high, aren’t that cheap.
Recently, we had a 20 something kid pull up in an expensive new Audi, dropped off his rental application. Under “banking information,” he left it all blank, except in the box where it said, “approximate amount in account.” It has boxes to write in approximate amounts for savings, checking, and credit card accounts.
In each box, he wrote, “Plenty.”
I liked that. Saves us from having to call the bank.
Millennials are awesome. If you don’t believe it, just ask them. They won’t lie.
😆
Actually the age range of boomers suggest the wave starts in about 2022 or so when the first boomers reach 77/78. That is the time one begins to think about change. Now the other question to the issue is what percent of kids from San Diego stay in the community versus move away? That will determine the answer to the question of what happens the boomers vacate the place. I know that in my family (from Midwest) the last 3 generations relocated, and indeed after retiring in MI my parents moved to Tx. (Very little snow, about once every 2 to 3 years) and it typically is gone by the next day).
One issue will clearly where are the jobs going to be? Once a family has been established, unless it reaches retirement it is unlikely to relocate between metro areas.
I did some checking and it looks like 50 to 60 percent of High School grads stay in the same city at age 30 40 to50% of college graduates stay in the same area. These figures suggest more the effect of additional generations may be less than you indicate. I did not find figures for San Diego but figures for LA imply about 50% stay.