Millennials: Getting killed by housing costs, or killing homeownership?

 

Dead Poets Society

Remember the scene in Dead Poet’s Society where Robin Williams stands on his desk, and challenges his students to change their perspective?  His message:  the way you see a problem or opportunity depends on where you stand.  So the blame built into the question, “Will millennials kill homeownership?” underlines William’s point, and will surely trigger hot buttons and heated debate today on Boston.com about who’s doing who wrong.

To put the debate in broader context, Real Estate Cafe recommends this background reading:

How the Housing Crisis Shafted the Next Generation

http://bit.ly/HousingShaft  (please share this short URL via social media)

And this rising concern.  Some, including the National Association of Realtors, are already wondering if the next housing downturn is already in sight.  They’re calling it the Great Senior Sell-Off, and we blogged about it recently in the context of rising rent burdens:

http://bit.ly/RentBacklash  (please share this short URL via social media)

If only 4 in 10 households can afford their rent, how will many accumulate enough savings to afford a downpayment or the reinflated housing prices of 2013?

DEMOGRAPHIC TRAIN WRECK?

Will the resulting decline in demand and plunge in purchasing power turn today’s rent burden into a deadlocked resale market or the next wave of short sales as aging babyboomers try to extract their shrinking home equity and / or share their inheritance in 2020 and beyond?

Here’s what one expert says about the Great Senior Sell-Off:

“By 2020, there were will be around 35 million over-65 households in the U.S. That year, Nelson calculates, seniors who would like to become renters will be trying to sell about 200,000 more owner-occupied homes than there will be new households entering the market to buy them. By 2030, that figure could rise to half a million housing units a year. “Between changing preferences and declining median household income … “that means we can predict the next housing crash, and that’ll be in about 2020.”

2020 is only six years away.  Are concerns about an intergeneration disconnect on housing shaping your real estate intentions?  Want to know why we think “Intention Inventory” will become more important than active inventory and how you can benefit from that mindset right now?

Contact the Real Estate Cafe to learn more.

Posted in Affordable housing, Buyer agent, Defensive Homebuying, DIY Homebuyers, FSBO: For Sale By Owner, Intention Inventory, Mlllennials, reVRM, Timing the market, VRM

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