(This is an excerpt from an article I originally published on Seeking Alpha on July 19, 2013. Click here to read the entire piece.)
“‘It’s romantic for the first 15 years when you’re turning 65 and retired…But aging in place among 90-year-olds? 95-year-olds?’ Many of these people…won’t realize that they can’t mow the lawn or pay for repairs until they’re really elderly, and the market for the their homes has collapsed even further.” – from “The Great Senior Sell-Off Could Cause the Next Housing Crisis” in the Atlantic Cities, March, 2013, an interview with demographer Arthur C. Nelson.
In late May, I made the case against the “Great Senior Sell-Off,” an idea promoted by demographer Arthur C. Nelson in an interview with The Atlantic Cities called “The Great Senior Sell-Off Could Cause the Next Housing Crisis.” At that time, I mainly focused on addressing Nelson’s claims and concerns one by one. I concluded that the concept of a Senior Sell-Off said little new beyond the implication that growing, economically vibrant cities/regions will likely absorb the passing of housing stock from boomers to younger generations just fine and declining areas will suffer even more. I doubt that the passing of the baby boomers will ignite a full-fledged housing crisis.
In this piece, I take a broader view of related research that suggest seniors are not likely to be massive sellers of homes no matter what the demographics are regarding the size of any particular cohort of age groups. To the extent that baby boomers will behave like elder generations before them, the majority of their housing stock is not likely to transition until the obvious precipitating shocks of abrupt changes in health, nursing home admission, or death. Moreover, with life expectancy projected to hit 80 only for those born in the year 2020, those people still clinging to homes in their 90s will represent quite an achievement on multiple fronts! I believe there is little to fear from 90-year olds finally deciding to sell their homes, even in the worst housing markets in the country. Any “crisis” is likely to be less about housing in general and more about the potential reduction in value of inheritance (bequests) in those parts of the country not enjoying sound economic growth. (For background on recent research refuting fears that baby boomers will significantly slow down economic growth see “Will Baby Boomers Drag Down Growth?“, April 13, 2013).
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(This is an excerpt from an article I originally published on Seeking Alpha on July 19, 2013. Click here to read the entire piece.)
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