The last time we had a big surge in pricing, the median sales price went up 100% in five years. But that was twenty years ago when the boomers were all young enough to move frequently, causing plenty of homes to be for sale.
By now, most (if not all) of those boomers are settled in and just watching the show.
My comments then:
First American’s comments now:
Average tenure length jumped nearly 4 percent from one year ago, and 0.4 percent compared with last month. The monthly gain was the largest since August 2020. The monthly increase in average tenure length contributed to a loss of over 17,000 potential home sales. Since existing homeowners supply the majority of the homes for sale, and increasing tenure length indicates homeowners are not selling, the housing market faces an ongoing supply shortage.
Before the housing market crash in 2007, the average length of time someone lived in their home was approximately five years. Average tenure length grew to approximately eight years during the aftermath of the housing market crisis between 2008 and 2016. The most recent data shows that the average length of time someone lives in their home reached 10.6 years in May 2021, an historic high.
Two trends are locking homebodies in place and driving the increase in tenure length.
First, for homeowners with rock-bottom rates, modestly higher rates in an historically low inventory environment may disincentivize some from selling their homes, thus preventing more supply from reaching the market. Second, seniors are choosing to age in place. Analysis of the 2020 ASEC data reveals that the homeownership rate actually increased for baby boomers in 2020. While a 2019 study from Freddie Mac shows that if seniors and adults born between 1931-1959 behaved like earlier generations, they would have released nearly 1.6 million additional housing units to the market by 2018. As seniors continue to choose to age in place, there will be fewer existing homes available for sale.Link to Article
If only people back in the early 2000s could have seen this trend.
And this “trend” will continue. Self driving vehicles will make this even more likely.
The Hartford Courant? I helped my dad repair their presses back in… wait for it… the late 60s early 70s. Not the big daily presses but the insert and “blow in” machines along with the folders and cutters.
Smart seniors have planned to age in place. Don’t expect the old pattern of downsizing.
Don’t expect the old pattern of downsizing.
Agree, and the cost of moving to a senior home has skyrocketed so even those who would have moved are having second thoughts.
Combined with more new in-home medical services, there’s no reason to move just because of health issues.
Yesterday, a friend of mine who has struggled though chemo over the last few years had a company deliver and administer an IV at his home to keep him going. You don’t need to go to the hospital or urgent care any more – they come to you.
Self driving vehicles will make this even more likely.
Combine those with work-from-home and we will redefine the outer suburbs, and I’m not just talking about Vista and San Marcos.
Fallbrook, Valley Center, Ramona, Julian, etc. should all benefit greatly, and we really should be building new cities in the desert too.
I know we need water, but we rallied during the last drought so I think the populace will respond.