Boomers! Boomers! What is going to happen to property values?

[chinaco]

I read a article about the impact boomers will have in multiple areas when they retire... and there is a big splash with waves as we all dive into the retirement pond an eventually bob back up into the health care system bog!

One thing I read was that eventually boomers houses will be liquidated as they require smaller places, assisted living, Nursing home, die, etc... Depending on where you are in that wave... you could see your property value drop because of over supply of existing homes.

For example: I am in the middle of the baby boom gen. If I try to sell the house in 25 or 30 years... I will be competing for a smaller (and shrinking pool of buyers). For two reasons:

1. Fewer people in the market to buy in general
2. If you are in the middle or end of the boomers, everyone that wants and existing home will have already bought from someone who died (estate liquidation) and therefore not want one, or we will be competing for fewer buyer
3. Older houses are often less attractive than newer except when it comes to location... There will be many houses for sale in your location.

What should we do? Plan to sell earlier and rent?


On the other side of the issue. If you own a home that is outfitted for handicapped people and age friendly, it might go for a premium. Since fewer homes are built that way, there is likely to be high demand as people run into mobility problems.

[youbet]

[quote=chinaco;528855]What should we do? Plan to sell earlier and rent?
quote]

We'll continue to live in our home or sell and rent depending on which option we would most enjoy and what age-driven issues mandate at the time. For many of the reasons you listed from the article, we did not do our FIRE planning based on harvesting investment income/profit from our home.

[chinaco]

[quote=youbet;528858]

Quote:

Originally Posted by chinaco What should we do? Plan to sell earlier and rent? quote] We'll continue to live in our home or sell and rent depending on which option we would most enjoy and what age-driven issues mandate at the time. For many of the reasons you listed from the article, we did not do our FIRE planning based on harvesting investment income/profit from our home.

Agreed. we will live in our home also. Plus, I am not depending on the money from the house for retirement. Of course, if we needed money (late in life), I suppose we could liquidate it and rent.

I guess my point was more related to prepositioning oneself. We are intending to downsize our house in the next couple of years.

2 thoughts are:

1) Do you think this is a valid concern or just needless worry (property values will not be impacted)
2) What might be reasonable an prudent measures to maximize your situation. For example, let's say I needed to move at about age 73 or 75 because of health problems. And at that time, I needed the money to get a replacement dwelling... what ever it was. I might be concern at that time about how much I can get so I can fund the next life stage living needs.

[LOL!]

When I lived in NY, I (as well as others) noticed that sometimes entire neighborhoods moved to Florida. The reason was that when the neighborhood was built, young couples and families moved in and stayed. Then 30-40 years later when the first retiree went to FL and had a good time, the others followed.

They were replaced with young families and the cycle began anew. But the older homes were not desirable ... only the land. The older homes were torn down and new homes built. Also sometimes 2 adjacent lots were combined into one.

So don't get sentimental about your home. It won't be worth much. Inflation alone will help make sure your land is valuable, but don't base your retirement on that either.

[tryan]

... not to worry, last I read the population has never had a down year.

[W2R]

I wouldn't make decisions based on guesses about the future - - that's sort of akin to market timing.

At one point articles were saying that boomers would be fighting over the available small homes for scaled down retirement living. Now, articles say that boomers continue to want larger homes even though their children have grown and gone. I don't think many people predicted that.

The main function of your home is as a place for you to live from now until you need to move into an assisted living or nursing facility. If it won't sell, maybe you could give it to your children.

(Of course, all of this raises the spectre of prior mortgage vs no mortgage discussions. Without sidetracking the thread. I would just quickly like to interject that having no mortgage and still being able to afford what you want out of retirement would lessen this worry.)

[kcowan]

If prices drop, who cares? When you eventually downsize, you will likely have more choices because builders respond to demand. Senior communities often cost more per square foot because of the added amenities being included. If you are counting on home equity to fund the latter years of your retirement, maybe you should downsize now or even rent.

If all else fails you, there is always the dreaded reverse mortgage.

[dex]

Bo 2050 it is estimated that the USA population will be 400 million - one of them will want your house.

[Nords]

Quote:

Originally Posted by dex Bo 2050 it is estimated that the USA population will be 400 million - one of them will want your house.

I think Dent, Burns, & Kotlikoff have banked tens of thousands with their scary stories about how Boomers are going to trash the world.

First the Boomers are going to crash the stock market with their exit. Then they're going to drive bond yields to zero in their insistence on a no-risk portfolio. Then they're going to overwhelm the entertainment industry with their insistence on having golf courses, cruise ships, & mega-resorts. Next they're going to crush the healthcare industry with their lifestyle demands & mass dementia. And don't forget about bankrupting Social Security & Medicare!

Dent, Burns & Kotlikoff are then going to make millions writing about how the world will implode when Boomers are gone. Treasuries will go begging for buyers at 10% APY. Hundreds of golf courses will be deserted or turned into farmland. Hundreds of cruise ships will rot at the pier. American industry will collapse as there's no more demand for healthcare, funerals, real estate, or scary books about Boomers.

I think it's all overblown. Gen X & Echo will pick up the slack. In fact they're spread out a bit more, so they might actually sustain everything without all the hype & hysteria about boom/bust cycles...

[chinaco]

You are correct, there have been predictions that were thought to be "said and done" that did not play out as predicted.

Remember Japan in the 80's! They were going to completely overpower us. As it turns out we shifted to more of a service economy.

I do think the boomer predictions will not be as dire as predicted. However, I suspect that there will be a deluge of personal real-estate on the market. That may create a buyer's paradise (single family dwelling deflation).

I am not staying awake at night worrying about it, but since we are going to downsize in the next few years... I believe it is worth a synapse or two to consider possible implications.

[haha]

I agree tha tthese thing sare ogen overplayed.
But boy one thing isr sure- adn easy way to get rich over the past decades was front-running the boomers.

Not sure that play is over.

Ha

[crazy connie]

My thought is that I will pocket a nice chunk of change when I downsize from my McMansion in 2 to 4 years. Then a right sized home will be free & clear. Only if I or the economy & markets really screw up BIG time (prolonged down markets over several years) is it a concern. My home will be part of the leftovers when I turn up my toes.

[Tadpole]

Quote:

Originally Posted by Nords I think Dent, Burns, & Kotlikoff have banked tens of thousands with their scary stories about how Boomers are going to trash the world.

Yep, that was just what I was thinking. They hit the gold mine with this boomer scare stuff. I wonder what is next?

Everyone should just chill out. The hospital delivery rooms didn't collapse; the schools didn't collapse; the job market accommodated them; the world just simply has not collapsed with the weight of them.

As far as retirement money goes - they will spend it and pay taxes on it. It will flow to the economy.

[maddythebeagle]

I am sure an immigrant would be happy to buy your house...and add to the mix a number of boomers that work until they die because they havent saved anything....I think we will be just fine...

[Dawg52]

I'm not worried, I have already sold my house and downsized to a house my aunt used to live in.

[Cattusbabe]

Not worried either. The house was never a piggy bank but a home. We plan to reverse mortgage it down the road so the bank is getting it back. After we leave what they do with it is their headache.

[aenlighten]

Not shrinking. We will need all the housing we have. Real estate may decline somewhat until the next recession, but it will only go up long term.

[Spanky]

Quote:

Originally Posted by Want2retire At one point articles were saying that boomers would be fighting over the available small homes for scaled down retirement living. Now, articles say that boomers continue to want larger homes even though their children have grown and gone. I don't think many people predicted that.

My plan is to move to a smaller, maintenance-free (if there's such a thing) home. However, I would not fight to get one.

[Rich_by_the_Bay]

Just an amusing aside: Chinaco gets my vote for the most tabloid-like topic titles:

Boomers! Boomers! What is going to happen to property values?
Hooray Kaderlis. I envy your moxy!
Somebody Help Me Please! Resisting the Glossy Brochure
Derivatives - Hedging or Gambling
How to cut your food bill by 90% and FIRE even quicker
Taking care of Mom!
Calling all Veterans
Panhandlers -- not again!

Great stuff. Got that format down pat. Any chance you wrote headlines for Fox or Rupert? Inquiring minds want to know!!!

Zesty Titles - How does he do it?? News at 10!

Just teasing, Chinaco - love the flare (and the posts are great, too).

[chinaco]

Quote:

Originally Posted by Rich_in_Tampa Just an amusing aside: Chinaco gets my vote for the most tabloid-like topic titles: ... Great stuff. Got that format down pat. Any chance you wrote headlines for Fox or Rupert? Inquiring minds want to know!!! Zesty Titles - How does he do it?? News at 10! Just teasing, Chinaco - love the flare (and the posts are great, too).