patrick.net

Does generation Y include immigrants?

How is Gen X only 48 million people if Gen Y is 78 million?
Also when exactly does one reach thier peak earning capability, and how does that impact your projections.

It is simple; less people were born between about that 20 year window than the previous one. I think it has to do with the fewer births during the great depression because of poor economic conditions. This would have reduced the number of potential parents between 1965 and 1982. 1934 plus 30 years (which is an average age for child bearing) and you get 1964, which is the end of the baby boom generation. Also, 1942 plus 40 years (which is basically when people stopped having kids) and you get 1982, the end of Generation X. Individual's peak earning years are between 40-55 years of age which is why they are upgrading to their second, usually larger, home. After the purchase is made, with debt of lets say $300,000, people have to pay their current income to the previous quick, short-term stimulus for the next 15-30 years. This is a drag on future years economic output because that money was already viewed as income to someone else. This $300,000 was created out of thin air by the banks through fractional reserve banking based solely on the belief that it will be paid back. These future dollars are all not going to the future economy, they are going to pay down the freshly created increase in the monetary supply. Hopefully their will be a large enough population to subsequently go massively into debt to make enough output, which is equal to income, for them to pay down their debt. Well, if there is not, the government can always take out trillions of dollars worth of debt annually…. which is exactly what they are doing.

At least we are not in the same position as Europe! By 2050 the US population will still grow by about 80 or 90 million. In Europe, demographers are expecting a decline in population of about 100 million!
Quote from the book "Fewer" written by Ben J. Wattenberg:

"In the year 2000 the population of all of Europe, stretching from Ireland to Siberia, including 47 nations, was 728 million people. By 2050, according to the UN Medium Variant projection, European population is estimated to be 632 million, a drop of 96 million people, and falling rapidly. In short, Europe down 100 million, America up 100 million."

I wonder what this will do to real estate prices in Europe!

There's actually an article that talks about this very subject.
www.scag.ca.gov/Housing/pdfs/trends/AgingBabyBoomers_GHB.pdf

Basically there is a curve that shows when people are more likely to move. As states have baby boomers that reach that peak it will slow further.

It isn't so much that people will automatically move to warmer climates but more like after a given time it will slow. How many 70-80 year olds move vs 50s and 60's?

If anything is considered an investment the planning is important. Housing isn't nearly as liquid as stocks but if there is a gradual move out some might get stuck. Even if a stock goes down to $5 you can still sell it. With a house it isn't nearly as easy.

It's all about Demographics. Thanks mdovell for the link, interesting read.

Bap33 says

does immigrants include invaders here illegally and their spawn dropped while invading?

Yes. But so what?

Bap33 says

does immigrants include invaders here illegally and their spawn dropped while invading?

You can thank the Catholic Church's position on birth control for that.

That's what I don't get about the "Pat Buchannan Conservatives." They don't like birth control and abortion, but they don't like the natural results of those policies either: hoards of poor, uneducated people being born into third-world cesspools like Mexico and then desperatley trying to escape.

"We'll defend you in the womb, but shoot you at the border."

The demographics for houses is bad in several places, and won't improve for social reasons.
Think why the demographics were previously GOOD for houses: a growing US economy, a growing US population, rising education levels,and rising median wages. These created a rising house median price, but it rose really with wage inflation.
NOW, the US economy is growing very slowly (1.7% 2011) the population is growing but with anchor babies of illegal aliens who do not achieve high education, and median wages are not rising, but falling.
Many of generation Y, like my friend's two kids, are marginally productive semi-slackers who won't save up the down payment for a house here in their adult lives.
Also, the anchor babies are not going to save up the down payment for a house either, they're not even going to achieve 4 year college degrees.
House prices are going down, it's like gravity. Gravity sucks, but it's the law.

clambo says

NOW, the US economy is growing very slowly (1.7% 2011) the population is growing but with anchor babies of illegal aliens who do not achieve high education, and median wages are not rising, but falling.

True. Our population is only growing due to immigration, and most of those immigrants are dirt poor. And the middle class is dissapearing. Fast. We're becoming a nation with "haves" and "have nots." Like we were 100 years ago.

Still, RE prices in the Bay Area could stay high if all of the "haves" want to live there. And I think there's evidence for that assertion. And if you're not one of the "haves", there's no reason to try and live there. You'll spend your whole life as a wage-slave to either Your Landlord or Your Bank.

wthrfrk80 says

You can thank the Catholic Church's position on birth control for that.
That's what I don't get about the "Pat Buchannan Conservatives." They don't like birth control and abortion, but they don't like the natural results of those policies either: hoards of poor, uneducated people being born into third-world cesspools like Mexico and then desperatley trying to escape.
"We'll defend you in the womb, but shoot you at the border."

Tell that to the Chinese (1.3Billion) and the Indians (1.1Biilion) and the other non-christan eastern nations who have a larger population vs Western nations.. Perhaps if the were Christian, they too would have had a lower population.

http://en.wikipedia.org/wiki/World_population

Mexico isnt that bad compared to Indo-China population.
Take a trip to India to see a real cesspools.

thomas.wong1986 says

Tell that to the Chinese (1.3Billion) and the Indians (1.1Biilion) and the other non-christan eastern nations who have a larger population vs Western nations.. Perhaps if the were Christian, they too would have had a lower population.

Something like 200 million of people were living in China and probably just as many in india when the pilgrams landed at plymouth rock. I think they had a little head start on populating their countries.

EconPete says

Demographics on why housing will drop for 10 years!

The declining Marriage rate should also be considered a demographic concerning real property pricing.
Era 2030 will see the last marriage in America, that's if the present rate of decline continues.

Single individuals are NOT the target audience for purchases of our traditional 3 bed 2 bath lawn mowers or rambling ranch style homesteads.
The Bay area has (in the last twenty years) realized a significant increase in construction catering to that single lifestyle. Japan & China's marriage rates are also on the decline.
Does this mean demand in Condo's will increase ?

EconPete says

Generation X are people born between 1965 and about 1982.

In addition, the birth control pill came out in early 1960's. How about Roe v Wade in 1973. Did that make a difference?

ThreeBays says

The thing I noted is that between 2010 and 2020 there is still an increase in the projected labor force aged 25 to 54, of about 2 Million. That to me seems like the "house buying" group, so demand will be there.

Thanks for the link. I see the 200,000 annual increase for 10 years, but you need to multiply that by the labor force participation rate. So approx 1.3 Million working people.

Great link. Who knows how reliable the conclusions, which is all i care about. I am on the edge of gen X (1964).
What a freakin mess!!!!

ThreeBays says

Between 2010 to 2030 the retirement age population will roughly double.

And jobs to care for the elderly will roughly double.. and the positions that once were held by all these retirees will become available to the next generation.

We might have a shortage of skilled people and huge wage increase soon.

BoomAndBustCycle says

We might have a shortage of skilled people and huge wage increase soon.

Except that those jobs will be overseas. LOL.

BoomAndBustCycle says

ThreeBays says

Between 2010 to 2030 the retirement age population will roughly double.

And jobs to care for the elderly will roughly double.. and the positions that once were held by all these retirees will become available to the next generation.

We might have a shortage of skilled people and huge wage increase soon.

That would assume the retirees have any money. They might for a little while. Another conclusion one might make is that the worker productivity in the elder care industry would have to double. We can't actually afford to pay for the retirement of all those people at traditional rates.

As far as the housing crisis that were in cause by many factors such as loan and credit balances, the uptick in inflation for counstruction materials, the subprime mortgage bulge....all that is another story.But when considering that different generational cohorts will pull us out of this mess is absurd.True once numbers our on file they stick, but just based on numbers as each cohort, like Gen X, moved through different life stages,you cant base it on just that...and from the looks of it...the Gen X workforce may be just the ones to boomerang the economy back to us.My parents were born during the Gen X bunch and are two hard working individuals who refuse this economy and housing crisis get to them.And my Generation Y doesnt even know what hit us let alone care about it.But hopes for a greener pastures are ahead just as my generation hits the workforce in a slower pace then in the early to mid 2000s.Gen Z is not far behind.....lol can we say echo?????

Life expectancy. Longer life expectancy means need the house longer and need to work longer.

It bothers me a bit to see the increasing usage of "Generation Y" as a synonym for the Millennial generation, born from 1982 to the mid 2000s. I remember first seeing this word used for the generation of people who bridged Gen X and the Millennials, born between the mid-1970s and late 1980s (basically the Ford, Carter, and Reagan administrations).

I think societal change now moves too fast for 20+ years to define cohorts of people. Someone born in 1964 had an upbringing and early adulthood that was wildly different from what someone born in the late '70s or early '80s experienced. There really should be a dividing line around 1973, the year of the Roe v. Wade decision -- the number of babies born dropped significantly at this time.

TMAC54 says

Does this mean demand in Condo's will increase ?

Absolutely. Also expect higher number of single moms taking care of 1+ children living in units supported by Section 8.

ThreeBays says

Hmm, I don't know. If this is correct then right around now the largest generation is settled in a home. They are going to be settled in there until they need to downsize, and are especially not going to want to sell while prices are low unless they have no choice.
So... you would expect fewer homes on the market, and right now that is what we see.

They don’t have a choice. California is not a destination for retired people. It happens now, retires are selling they houses for whatever can get and move to FL, CO, OR or AZ were houses are still comparably cheap.

We were in Central California for the weekend. I have to tell you, still very many people there talk about how much money they've made or will make from selling/buying their houses.

The attitude of "I bought a house and therefore I'm a winner" is still very prevalent in many places. Don't think this bubble will be over soon.