Millennials will be able to buy homes soon, thanks to Boomer senescence and mortality

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Originally published at: https://boingboing.net/2019/01/05/panic-selloff-cascade.html

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#2

I hope the US will be able to walk back its creeping fascism by then, because I don’t know if owning a cheaper house there would be worth the tradeoff.

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#3

since the millennials are already living at home why not just wait for their parents to die off!

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#4

That’d be nice (for those who picked the right parents).

Although, since a lot of UK boomers’ wealth is in the form of real estate, it seems like we’re saying that the coming deathwave will shower younger generations with inheritance while also tanking the value of that inheritance. Also, it will mean that there’s a glut of housing in old-people towns, which will swell the coffers of younger people who want to live in big cities where the housing supply is unchanged.

I’ve been having a bunch of conversations about this recently. Even on Real Estate Porn Island, old people know they’ll have to move eventually, because stairs; and I think there is a lot of interest in the type of retirement community where you buy an overpriced luxury flat but the site is purpose-designed so that you can live there for the rest of your life, even if you become a wheeled vegetable. I know some people who did that, and they love it apparently. But there’s very little of that kind of thing available at present. It’s all very complex.

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#5

They may be able to buy homes soon, but as wealth-creation options, homes are pretty lousy investments. Although the value of the average house in the USA may rise to (barely) keep pace with inflation, owning property can act as an expensive shackle that (1) is expensive to maintain and repair, (2) is difficult, time consuming (and also expensive) to sell, and (3 – most importantly) restricts potentially lucrative employment options in other parts of the country (or world). To me, unless you are certain in your (ha, ha) job security and are similarly certain that you won’t move for at least 5-10 years, then renting is almost certainly the better option.

Yes, you’ll give money to a landlord, and it’ll feel like throwing money away. But take it from someone who’s been around for 60 years – your landlord will almost certainly be kinder than your faceless Delaware-incorporated creditor when you run into hard economic times and have difficulty making payments.

Adam Ruins Everything on home ownership

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#6

I wonder how student loans factor into this. Many young adults can’t take out a home loan (let alone make a downpayment on a home) because they’re already hugely debt burdened.

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#7

I know, I was wondering how the Economist thought they’d pay for it; with human organs as collateral?

Maybe some younger people who come from one-family homes could be buying family homes from parents at low, within-the-family prices, but even with a below-rent-prices mortgage, the upkeep of a home is most often not cheap. Also, if the parents need that house-sale $ for retirement/assisted living, then the house goes on the open market?

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#8

I believe that as much as the theory that retiring baby boomers would open up more good full-time positions.

I wouldn’t be surprised if insurance arson came back into fashion.

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#9

Here in the UK, it’s more likely that investment funds and already stocked landowners will just buy up the rest of the housing stock as and when it comes onto the market, denying most of us post-boomer generations a chance.

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#10

There are trade offs either way, and no garauntees. I’ve lived with some pretty awful landlords, and am glad now I don’t have to, or worry about rent increases. But what it comes down to is that everyone has to try to make a choice that fits their own situation.

But there was an expectation of a big wave of moving retirees during the Great Bubble and it didn’t really play out that way.

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#11

Meh. Sounds like the prediction that, in a couple of years, permanent positions will be available at any of my employers so far - because a wave of retirement.

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#12

Thankfully there are boomers (and millennials) in lots of non-US places. Unfortunately as a Canadian, we’re dealing with our own creeping facism.

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#13

Well in the cases where millennials are buying out their siblings for inherited homes, they won’t ever be on the public market.

#14

That silver lining about inheritance won’t apply in the US due to long term care and medical costs. Medicare doesn’t cover nursing homes or in-home care, and there is no way for a middle class family to afford it for long. So most folks end up on Medicaid, which requires complete impoverishment. They let you keep a modest house if your spouse is still living in it, but they take that too when the spouse dies. There will be nothing left for heirs.

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#15

Well, if you’d bought a house 40 of those 60 years ago, you would own it now, and your payment would have likely been half of what you are paying in rent. And if you were really hard pressed, you could borrow against the value of that house in a tight spot. I’m a landlord and I’d take an old mortgage any day.

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#16

Fixed that.

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#17

I doubt there will be a lowering of housing prices here. I’m in Austin and there are many young people with loads of money, they are already actively buying real estate from older folks and driving up prices. The real estate here is highly desirable and i don’t see a scenario where prices would go down in a meaningful way unless the market itself crashed

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#18

I bought my house 14 years ago. 14 years of rent would have been 400K out the window. 14 years of mortgage payments started going to equity some time ago. Sure I have put some money in for maintenance and refurb, but six years from now we’ll own it outright, and (conservatively) it’ll be worth twice what we paid for it.

I have a number of friends who moved here around the same time I did. They have to move again every few years, to a crappier apartment or neighborhood, as their landlords raise their rent past what they can afford.

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#19

From the Google:

“During the baby boomer years, 1946 - 1964 (inclusive), 75.8 million Americans were born. The ratio of males to females has stayed relatively constant. There were approximately 1.05 male births for every one female birth. The biggest year of the boom was 1957 , when 4.3 million boomers were born.”

This is for the USA, not Britain but ten years off from what Cory writes. Not that he is always that accurate about a lot of things.

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#20

That’s a large part of the reason I suspect, yes.

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