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The Silver Tsunami & Real Estate
Old 11-23-2019, 07:49 PM   #1
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The Silver Tsunami & Real Estate

It looks like a real estate correction will be coming as Baby Boomers "exit home ownership." 21 million homes over the next 20 years:

https://twitter.com/issiromem/status...01866716565504
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Old 11-23-2019, 07:50 PM   #2
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Also WSJ if you have a subscription:


https://www.wsj.com/articles/ok-boom...es-11574485201
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Old 11-23-2019, 07:58 PM   #3
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I think a realistic concern... especially here in Florida where building abounds... I suspect that supply will be huge and demand will crater in 30 years based on demographics.
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Old 11-23-2019, 07:59 PM   #4
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Quote:
Originally Posted by Tekward View Post
It looks like a real estate correction will be coming as Baby Boomers "exit home ownership." 21 million homes over the next 20 years:
Boomers won’t all act or ultimately die at once, so I’d expect a long downward price appreciation trend more than a “correction” or something abrupt like the 2008-09 RE meltdown - which RE prices fully recovered from years ago. Prices will respond to excess supply as always, but it’ll be a persistent trend versus a correction. And it’s not like the impact of Boomers on the economy hasn’t been fully discussed, shouldn’t be a surprise to anyone who can fog a mirror.
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Old 11-23-2019, 08:06 PM   #5
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Yeah, perhaps crater was a poor word to use, but it will a long, steady and very significant decline in demand.
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Old 11-23-2019, 08:13 PM   #6
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Yeah, perhaps crater was a poor word to use, but it will a long, steady and very significant decline in demand.
I was questioning the use of “correction” and “tsunami” as overstating for dramatic effect. I agree it will be as you describe.
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Old 11-23-2019, 08:15 PM   #7
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This was predicted by Forbes magazine, prior to 2008. I'm trying to find the link.....
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Old 11-23-2019, 08:20 PM   #8
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This was predicted by Forbes magazine, prior to 2008. I'm trying to find the link.....
And they said the same thing would happen as Boomers downsized into smaller homes as they retired, which technically began in 2011. So far so good it seems.

The impact of Boomers on the economy and sectors is one of the most predictable events to plan for, gradual not a tsunami. Unlike recessions, inflation, returns, growth, climate, black swans, geopolitics, asteroids...
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Old 11-23-2019, 08:35 PM   #9
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I don't worry about it. There never has been and likely never will be a shortage of people who would love to move into my neighborhood.
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Old 11-23-2019, 09:01 PM   #10
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Not Silver Tsunami, but Croaker Growth.
I stole that.
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Old 11-23-2019, 09:02 PM   #11
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Nothing occurs in a vacuum.

At the same time as the Boomers are "exiting home ownership" and eventually this orb, the largest demographic cohort group ever (numbering over 75 million in the U.S.), the Millenials (aka Echo Boomers, born ~1981 - ~1996) will be doing whatever their generation decides to do as far as real estate. They've got to live somewhere, whether it's in walkable cities, or beachfront huts, or in their grandma's old house.

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Old 11-23-2019, 09:31 PM   #12
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Boomers are also supposed to be selling off all their stocks about now causing the market to go into a long term Bear Market. I guess we’re not selling as fast as we should. Bad Boomers for making these experts look foolish.
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Old 11-23-2019, 09:41 PM   #13
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Um, millennials are the "largest generation" so how does that math work? https://www.pewresearch.org/fact-tan...-baby-boomers/
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Old 11-23-2019, 09:58 PM   #14
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Figure if the population is still growing someone will need a house. I never went for the McMansion so I'm not worried.
A deadly flu pandemic however could crater prices.
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Old 11-23-2019, 11:47 PM   #15
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Quote:
Originally Posted by omni550 View Post
Nothing occurs in a vacuum.

At the same time as the Boomers are "exiting home ownership" and eventually this orb, the largest demographic cohort group ever (numbering over 75 million in the U.S.), the Millenials (aka Echo Boomers, born ~1981 - ~1996) will be doing whatever their generation decides to do as far as real estate. They've got to live somewhere, whether it's in walkable cities, or beachfront huts, or in their grandma's old house.

omni
Keep in mind that the beach will be located a little farther inland for the Millenials and their children. Especially in Florida. Rising water probably won't affect the supply of moderate price houses inland, but those fancy high rises might have some issues. And it will be hotter also, for them.

some speculation from the link:
What We’ll See

-Millennial generation Floridians, by this period in their senior years [2050-2075-, will be living in a Florida much changed from that of their youth.
-In Pinellas, as sea-level rise reaches three to four feet, major chunks of the barrier islands will be lost.
-In central Florida, Lake Monroe, far inland, swells to absorb connected lakes.
You’ll need a kayak to get to the door of Cedar Key City Hall.
-Kennedy Space Center and the commercial rocket industry grow increasingly isolated by rising water.
-Fort Lauderdale indeed becomes America’s Venice, with water at residential doorsteps, U.S. 1 under water and downtown awash at three feet and gone at four. The corporate descendant of Flagler’s railroad will need to span long stretches of Broward water — imitating his ill-fated original Overseas Railroad in the Keys — to remain operational.
-At three feet, Miami Beach is gone but for a spine close to the Atlantic. Brickell has standing water, and the Miami River widens up through central Miami-Dade. Water penetration from the former Everglades consumes western urbanized Miami-Dade.
-In the Keys, at 24 inches of rise, nuisance floods occur 672 times per year — nearly every daily high tide.

https://www.floridatrend.com/article...ida-2050--2075
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Old 11-23-2019, 11:51 PM   #16
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Originally Posted by Midpack View Post
I was questioning the use of “correction” and “tsunami” as overstating for dramatic effect. I agree it will be as you describe.
Besides 'tsunami', someone else mentioned 'crater'. It reminded me of the proverbial meteor strike that would definitely affect home values.
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Old 11-24-2019, 01:37 AM   #17
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I'll believe it when I saw it.
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Old 11-24-2019, 08:59 AM   #18
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Don't matter.
The USSR nukes blew us up in the 50s, hide under your desk.
Air pollution is so bad we can't leave the house since the 60s.
We all died of skin cancer in the 70s from the ozone layer vanishing.
Anyway, it's all owned by the Japanese who bought all of America in the 80s.

(I believe in human caused warming, but don't think we have the wisdom or knowledge to model what the real effects will be. So let's burn a bit less coal and oil even if it's just for breathable air.)
Quote:
Originally Posted by timo2 View Post
Keep in mind that the beach will be located a little farther inland for the Millenials and their children. Especially in Florida. Rising water probably won't affect the supply of moderate price houses inland, but those fancy high rises might have some issues. And it will be hotter also, for them.

some speculation from the link:
What We’ll See

-Millennial generation Floridians, by this period in their senior years [2050-2075-, will be living in a Florida much changed from that of their youth.
-In Pinellas, as sea-level rise reaches three to four feet, major chunks of the barrier islands will be lost.
-In central Florida, Lake Monroe, far inland, swells to absorb connected lakes.
You’ll need a kayak to get to the door of Cedar Key City Hall.
-Kennedy Space Center and the commercial rocket industry grow increasingly isolated by rising water.
-Fort Lauderdale indeed becomes America’s Venice, with water at residential doorsteps, U.S. 1 under water and downtown awash at three feet and gone at four. The corporate descendant of Flagler’s railroad will need to span long stretches of Broward water — imitating his ill-fated original Overseas Railroad in the Keys — to remain operational.
-At three feet, Miami Beach is gone but for a spine close to the Atlantic. Brickell has standing water, and the Miami River widens up through central Miami-Dade. Water penetration from the former Everglades consumes western urbanized Miami-Dade.
-In the Keys, at 24 inches of rise, nuisance floods occur 672 times per year — nearly every daily high tide.

https://www.floridatrend.com/article...ida-2050--2075
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Old 11-24-2019, 09:16 AM   #19
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Don't matter.
The USSR nukes blew us up in the 50s, hide under your desk.
Air pollution is so bad we can't leave the house since the 60s.
We all died of skin cancer in the 70s from the ozone layer vanishing.
Anyway, it's all owned by the Japanese who bought all of America in the 80s.

(I believe in human caused warming, but don't think we have the wisdom or knowledge to model what the real effects will be. So let's burn a bit less coal and oil even if it's just for breathable air.)
You forgot acid rain. Once foresters reported that forest fires create "basic" or "non acidic" wood ash that naturally buffers the "always acid" rain, that disaster was avoided.
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Old 11-24-2019, 09:37 AM   #20
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Does this mean the flow of people to retire in Florida will finally reverse?

So, on the one hand, people are building in riskier areas (flood, fire, tornado) with longer commutes becasue land and new housing is so expensive, but on the other hand we are seeing the beginning of a major collapse due to an excess of housing. Something doesn’t compute.

The population continues to grow and the amount of land does not. Demand for housing will continue to grow IMO. Some folks with retirement plans built around their current home value may have to rethink their calculations, but everyone else will be fine. These are markets, and markets adjust to price.
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