Housing market to get flooded with homes?

[bjl584]

News Headlines

In coming years hoards of Babyboomers may be putting their homes on the market. But, the younger generations may not want to buy them.

[prf2009a]

I see a lot of truth to this on a personal level and believe the problem goes farther than just the number of buyers. I am in a midwertern city looking for a home to purchase right now. We have been keeping track of what's coming on the market and have been incredibly dissapointed with what we see. Many overpriced homes that have had little upkeep by homeowners. A lot of houses with little character, terrible layouts, and poor construction. I don't want to buy someone's junk. If this trend continues I will just hold off on buying until we are in a position to build new.

[disneysteve]

I think a big factor is geography. While homes in Michigan may be sitting unsold, new houses in parts of Florida are selling faster than they can build them, for example. My cousin bought a new house in Boynton Beach, FL last year in a new 55+ community and the lots there are selling like hotcakes. They are building constantly and his development is just one of several in the area that are all building at a rapid pace. Of course, the people moving to those homes had to sell homes elsewhere in the country in order to relocate and that's where the problem arises.

Another problem is aging inventory. When my mom sold her house 6 years ago, it was about 60 years old. My house is 48 years old. People coming into my area today are looking for newer construction. They don't want the wear and tear and maintenance that comes with buying an older home, so instead they look to the newer homes in the vicinity. Makes it harder to sell the older stuff. The older homes appeal more to lower income folks because that's what they can afford, which then changes the demographics of the neighborhoods and contributes to their decline. It is a vicious cycle.

[AccountantSalary]

Perhaps not American baby boomers. But here in Orange County, California, buyers from Asia are buying up all the new homes and keeping the housing market afloat. That may continue in the future as the folks from China and India continue to gain more disposable income.

[A2TRM]

Here's an interesting study from the Congressional Budget Office about what will happen to the demand for assets as boomers begin retiring. Note that this isn't isolated to housing. As boomers begin retiring, they'll need to start liquidating their investments as they convert retirement savings into income.

[A2TRM]

The forum won't let me include links because I don't have enough posts. The paper was published by the CBO in September 2009 and is titled "Will the Demand for Assets Fall When the Baby Boomers Retire".

cbo.gov/sites/default/files/cbofiles/ftpdocs/105xx/doc10526/09-08_baby-boomers.pdf