There will be an excess of supply of housing as boomers die. Those younger baby boomers will see the value of their home equity decline as housing pricing drops. Young people will be able to afford a house in the future.
And the oldest baby boomers that don’t die will be moving into assisted living opening their housing to the total housing supply.
Baby Boomers: US Born (1946 - 1964)
| Total Generation Size: | 85,358,000 |
|---|---|
| Total Deceased: | 33,942,936 |
Frequency of Death: Every 14 seconds
| Projected 99.9% Extinction: Circa 2079 |
|---|
| Methodology: This real-time model utilizes a Standard Sigmoid (Logistic) Curve to calculate population decline. Unlike linear models, this reflects the biological reality of aging, where mortality rates accelerate during mid-life and taper during the centenarian phase. |
This clock utilizes US Census Bureau data and actuarial curves to estimate population decline. It assumes a maximum lifespan of 115-120 years (Projected Extinction: 2079) with a generation-specific life expectancy benchmark adjusted for the 1946-1964 cohort.
Also there are over 6.9 million Silent Generation still alive.
Since the youngest of the cohort (born 1964) would be 115 in 2079, that would seem to be an overly generous estimated lifespan for the last 85K.
DB2
As my post described the methodology of the analysis, I think your nit-picking. There is a finite small population that may live longer than 110 years.
What’s “magic” about 2035? About a third of boomers are already dead and whatever housing they lived in now belongs to someone else. Maybe by 2035, it’ll be 45% or 50% dead, or whatever. But the boomers were born across a large span of nearly 20 years, and they (we) will mostly die off across a similar span of time. No one year has any particularly large spike in numbers, and even if it did, the spike wouldn’t amount to anything particularly significant with regards to housing.
Now, the high cost of housing may decline for other reasons, primarily the fact that something that can’t continue, generally won’t continue.
Plus the oldest baby boomers alive likely have exited their home and are in an assisted living facility.
The very wealthy will buy the houses, because they are consuming every asset class, always looking for somewhere to put their ever growing wealth.
That will continue to drive up prices and the trend of young families unable to afford a home.
Whoever has all the money controls the market.
Tax wealth, not work.
In the future, we will subscribe to homes and autos.
Sure it’s a nit, but there is no way there will be 85,000 people in the US over 115. Google tells us that there is currently one fully verified such person (Naomi Whitehead of Pennsylvania).
DB2
The wealthy tend to put money to work in more productive assets. The govt continues to print money, eroding individual purchasing power. It disproportionally impacts poorer groups.
On top of that, you add on policies that restrict development, increase property taxes, and forced minimum wage rate. It increases the cost to build and of home ownership.
Beyond that, the economy is never a winner takes all. It’s the fallacy of an ideology that mistakes a real economy for the game of monopoly. There is a market to be served building affordable housing. If left largely alone to do so, it will solve the issue.
I believe it was Mark Twain who wrote “Buy land, they’re not making it anymore.” Is this to become true of housing as well? It doesn’t seem likely.
DB2
And also unproductive assets.
In fact, when the top % rake in too much cash relative to labor, we get asset inflation - which we have had for some time.
The top % only spend a tiny part of their money on consumption, so the rest of their cash has to go somewhere.
It goes into assets, any assets or perceived assets.
Single family homes, HVAC companies, optometrist practices, crypto, speculative stocks, less speculative stocks, private credit, corp bonds, Treasurys, you name it, need a place to put all the cash.
That government deficit spending? A bunch goes into healthcare and defense spending and back to the top %.
It doesn’t go in to buying starter homes, at least not to a significant degree. Depending on where you want to define wealthy, for most, the bulk of assets are held in private or public ownership of businesses, personal and primary real estate holdings, private equity and alternative pooled investment assets or funds.
The steepest appreciation of hard assets in recent years occurred during the COVID era. What happen at that point? Near zero interest rates and flood of money into the system driving up basic asset prices from housing to vehicles.
Do the wealthy have impact on some asset prices? Sure, they have an impact. If you want to buy real estate in Malibu, Telluride or Big Sky or West Palm Beach, you will see elevated prices because it tends have limited supply and the enclaves of the wealthy. If you own a vintage Ferrari is it going to appreciate because of rare supply and deep pockets, it probably will.
These are not the areas and assets most Americans are looking to buy. The truth is the Govt hides the real damage in terms of inflation in how it calculates CPI. Many experts think the real inflation rate (which is more accurately described as vectors depending on the specific asset or service) may be north of 5% annually. So, a house that cost $200k 25 years ago now costs $677k, simply because of the erosion of inflation. That’s without any additional premium for geographical location.
I would be all for ending deficit spending. But, whether you choose austerity measures or continue spending, anyone that has excess capital to deploy over their income and household expenses is going to continue to improve their financial position over those that aren’t saving. This is the escape velocity that everyone should strive to achieve.
Again, it’s a Robert Reich style of argument that ignores the economic benefit to larger group. Musk took the capital he made from the sale to Paypal to build Tesla and Space X. He became a trillionaire along the way, not by robbing the poor of something. Along with his personal wealth, he made more employee millionaires than any other person in history.
Bezos’s stake in AMZN is worth roughly 250 Billion. But, it represents only 10% of the companies total market cap of $2.3 Trillion. Jeff kept only a small % of the total value of AMZN that has enriched lots and lots of other investors employees. Of course, none of this addresses the taxes paid that support govt administered activities or their own charity works. Bezos’ ex-wife has pledged 50 Billion of her ownership in AMZN to fund charitable efforts.
I’m speaking of all asset types.
Of course the wealthy “have impact” on asset prices - it’s not the working folk, they don’t buy or own many assets.
This is axiomatic.
I was born in '64. I’ll make it. So far, so good.
Best of luck!
Hold on a minute, cricket. The oldest are turning 80 this year. Google tells us that:
“Approximately 1.4% to 2% of all U.S. seniors live in assisted living facilities. When focusing specifically on adults in their late 70s to mid-80s, this figure is estimated to be slightly higher, but the vast majority of 80-year-olds still live independently or with family.”
DB2
Well, yeah, because all their needs are met and they have excess to invest. A growing number of people have little to nothing to invest, so they cannot compete with the growing hoards of cash the wealthy have.
Government prints money because they don’t have taxes receipts… from the very wealthy.
Can you see how this is a vicious cycle, getting worse year after year? And loading government debt on the working class so the very wealthy can own everything?
You say it in your first paragraph, yet somehow miss that the very wealthy are amassing exponential wealth at the expense of everyone, including the government.
The year geezers begin the trip to assisted living. It will be a flood as years go by.
And those in poor health head to assisted living sooner.
You will note the Baby Boomer generation is heavily front loaded. All those h*rny men returning from WW2.
What those numbers don’t address is those who aren’t looking for a place in assisted living – "the vast majority of 80-year-olds still live independently or with family.”
DB2
Are you suggesting those that save and have more to invest should be penalized for doing so?
Nobody that spends everything they make can compete with savers. These are economic realities.
Sounds like this might be a spending problem as much as a revenue problem. Regardless, I fail to see how this bridges the gap between savers and net spenders.
I didn’t miss it nor do I care about the absolute difference in wealth or even that it is growing. I do care about base standard of living and class mobility. Whether someone else is a billionaire or Trillionaire matter little to me, it’s irrelevant as to my own financial security and or perceived opportunities. It’s a fallacy based on the idea that wealth amassed in one place is taken from someone or someplace else. What is destroying the purchasing power of the poor and the middle class is the printing of money. McDonalds isn’t charging 3x for a value meal because Jeff Bezos is a billionaire.
