Boomers won't let go of their homes

I'm not going to blame boomers for holding onto arguably the most reliable asset they own.

But there is a generational problem in this country where younger people cannot reasonably afford housing. And no, it's not because they're drinking $5 lattes daily. That's irresponsible spending, don't get me wrong, but it doesn't even come close to making up the difference for a down payment on a house.

There's a variety of reasons for the problem and no single person to blame:
1) Value of housing as an investment, leading wealthy people and corporations to purchasing multiple properties as investments.
2) Aging population. People generally have more money when they are older. We have an aging population right now, leading to them naturally having a greater share of the housing, naturally increasing the price for younger people looking for housing.
3) Simple supply and demand. The rate of increase in housing in Florida simply has not kept up with the increase in population to Florida leading to a shortage in available housing.

I'm not blaming anybody for acting in their own best interests. But the end result needs to be considered a problem.

 

Capitalism is great for delivering artificial scarcity. Pretty much anyone that owns a home already benefits from that. Its as close as some of us will get to "owning the means of production." Its been many decades since building public housing was something anyone and the government were interested in doing. Everything is driven by the politics of "dont let my home/rental value disintegrate."

 

This sort of stuff says and solves nothing.

My generation deserves plenty of crap for its sensitivity and work ethic.

However, "laziness" is far from the primary reason my generation cannot afford housing. If Boomers had to deal with the same market as us adjusted to scale, Boomers would've had a much more difficult time affording housing. Instead, they dealt with a market ripe for the taking. They are the aging population, they didn't have to deal with one clogging the housing market.

I'm not going to blame Boomers for "existing," but let's be honest about the circumstances each generation has had to deal with.

 

I don't like the idea of public housing, but I'll admit I don't have a good answer to this problem.

Some of it will naturally go away as Millennials control the market more. But based on the country's demographics, that change will happen much later into the lives of Millennials than their predecessors.

 

Well it will be interesting when a couple of generations largely priced out of homeownership become the prime voting demographic

 

Who's building houses like that anymore though? My property might have been considered a "starter" home like 40 years ago (technically it was built for retirees moving to FL I think). It sold for like $39k when it was built (which accounting for inflation would be ~$150k today). I could conceivably ask like $300,000+ for it now lol, the price has basically doubled for anyone buying now. I guess some look at townhomes or condos, but if its between financing to the gills a condo/townhouse vs a home, I think its a no brainer on where the equity is more likely to build, even if you borrow more on the house.

 

One positive is boomers will soon be checking out. That will reduce the drain on SS, Medicare, and medical for those that have supplemental insurance. Also free up homes unless passed down to heirs. We need another covid type disease to finish the job.

 

I have a friend that works in the government of another state that will go unnamed. Did a lot of budget work then for the Speaker of state house, later the Governor. Their unfunded pension situation got a lot better with Covid due to earlier deaths. Still in deficit, but much better. And they know with a large population exactly how many should die when. Though that it is impossible to predict with an individual, it is very stable and predictable with a large population. And Covid caused a LOT of excess elderly death

 

May be true, but the issue is even starter homes are out of reach for couples starting. I have a few late 20s and early 30s in my family that are looking. 3 bedroom, ~1400-1500 sqft houses (similar to my first house) in good family suburbs are going for 500-600k, at 7.5%, and insurance will be $5-6k a year. I bought a similar house, 20 years ago for $200k. I bought another 10 years ago for $250k. Rates were 4.5-5.5% and my insurance was $1k a year.

By most metrics these young people in my family are ahead of where I was at the same age. But while buying a house was attainable to me, they have almost given up on buying.

 

Something similar is already happening in the used market for Harleys in particular and other touring (and sport touring) motorcycles in our area. There are so many boomers having or choosing to give up riding that the used market is saturated and prices are declining. I just unloaded our Softails and am looking at the BMW R nine T. However, I found a gorgeous 2013 Honda CB 1100 in The Villages with 5600 miles that is very interesting.

 

Agree. Blaming Boomers is ridiculous. Some people love their house, especially if they raised a family there. The can stay as long as they want. Boomers also had to deal with double digit interest rates during some of their prime years.

The issue isn’t Boomers or any other generation. The issue is supply and bad monetary policy by several administrations. The government needs to find a way to incentivize builders to build affordable housing, and provide breaks to those buying their first house.

 

Like getting rid of some of their existing debt? *Runs away*

 

I’m not a fan of debt elimination. Was thinking more along the lines of tax breaks or lower rate loans. But none of it will matter if builders only build large, luxury homes.

 

Incentivizing builders is easy. Incentivizing owners to have their home values decrease by having builders create supply that would bring prices down substantially nationwide is much harder.

 

Why would you have to incentivize owners?

 

Are they going to get on board with your plan to dramatically lower prices by creating more supply knowing their (admittedly inflated) home value collapses overnight? You need to keep those people happy somehow. And of course where you put those starter/affordable houses will be a hot potato too. Not unlike public housing in the 70s. People with expensive houses dont really want cheap housing near them, because of that home value thing. Its not as easy as just handing builders a bag of money, because there are politics involved here.

 

Prices aren’t going to drop dramatically. And again, why do they need to get onboard? They don’t really play a role in this equation. Housing prices react to market conditions like everything else. People might lament their Zillow estimate is lower but I don’t see them attacking the Capitol over it.

 

If prices arent going to drop dramatically, then you arent building affordable housing, so why are we giving builders money again? If there is no radical adjustment of supply you are just letting some air out of the bubble temporarily.

 

So is this millennial hate only restricted to boomers? What about us Gen x and others. Do we get lumped into the same category or are we all good?