Aging boomers and the generational housing bubble
Posted on 21 January 2008
By Mark Miller
Permanent URL of this article: http://retirementrevised.com/money/aging-boomers-and-the-generational-housing-bubble
If you think the subprime mortgage meltdown is bad, consider the impact on housing as the boomer age wave hits. Dowell Myers, 
professor of urban planning and demography at the University of Southern California, is co-author of a new research study looking at how the huge boomer generation will affect housing as it begins selling homes to a shrinking pool of buyers. The net impact will be the end of what Myers calls the “generational housing bubble.”
“We’re turning the tide now, and there will be more sellers than buyers,” he says. The ratio of seniors to working-age adults will shift 67 percent over the next two decades; that shift in buyer-seller balance, coupled with a gap in affordability created by the housing run up of the last two decades, will lead to sharp downturns in housing values, he says. The changes will be seen most quickly he predicts, in the Northeast and Midwest, where people tend to sell more quickly as they age. The last states to see major change will be Florida, Arizona and Nevada–states where people remain net buyers until age 75, Myers says.
I’ll be writing more about this topic in the column shortly. If you have questions or specific concerns about future housing market values, leave a comment on this page.
February 6th, 2008 at 4:36 am
The study by professor Myers can be found here:
http://www.informaworld.com/smpp/content~content=a789053981~db=all~order=pubdate
April 12th, 2009 at 9:42 pm
Hu read a articale in USA TODAy Eward Kennedy SilverScholorships about Seniors helping grandkids by donating hours to non Profit places And I make quilt tops for the Luthurn missions , Battered women children from battererd homes etc & also make baby quilts& angel wraps for another group & the veterans hosipial . all together I sew at least 5 hours a day for these places as just can’t sit at night doing nothing ( I am 77 years Young) & love to sew. My grandson wonts to go to college & with out his dad selling any realestate in2008 or 2009 its hard to make ends meet for them . we help all we can but money is tight for us too thank you Shirley
June 7th, 2009 at 8:03 pm
Thanks for the lead to this study, Mike! It was fascinating, if depressing, as I just blogged about myself. I don’t like to think of millions of Boomers stuck in homes they can’t sell, against a backdrop of Next Gen buyers who would love to own Daddy’s house, but can’t afford it.
April 24th, 2010 at 2:22 am
don’t worry Nina B, young buyers will be able to afford those houses cause prices will adjust downwards, till a willing buyer shows up.
remember that there are increasingly high carrying costs for keeping more house than needed (property taxes for example). so many boomers will be happy to move to a smaller money pitt, no matter how little they could get for the house (it will mostly be paid off anyway by then).
September 10th, 2010 at 7:28 pm
Let’s remember real estate is cyclical. It will go up again, sure if you cashed out or bought at the top of the market it will take time to recover. You may never get it all back but as Julia said the carrying cost could exceed any profit you were hoping to get if you hold on too long. Besides that, do you need that 5 bdrm 3 ba home that only sees family maybe once or twice a year and you are paying taxes, insurance, utilities, maintenance, etc. on it all year long?
Also, if the kids have all moved away, it is not really “the family” home anymore, when Mom and Dad are gone they are just going to sell it anyway.
Mom and Dad may be better of to cut thier losses and move into something smaller (maybe a condo) and enjoy a simpler life.