patrick.net

http://finance.fortune.cnn.com/2012/11/27/first-time-homebuyers-housing-market/?section=money_topstories&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+rss%2Fmoney_topstories+(Top+Stories)

Where have they gone?

In October, the share of buyers purchasing their first home dropped to 34.7%, the lowest point in at least three years, according to a survey of real estate agents. This compares with 37.1% in June and the 40% range it has historically hovered around.

Goran, it depends on the region.

In coastal CA, they can sell to wealthy immigrants, flippers and plenty of the BB's kids that DO have high paying jobs. If housing inventories stay super low, then there will be enough people with money to pay the silly premiums that are now being commanded. Not ALL of the BB's kids are broke and living in the basement. In fact, a lot of the high-earning ones happen to live in coastal CA. With super low inventories, you don't need hordes of monied people, anyway.

As for the rest of the country, well, there is probably more reason for concern on this front. The Baby Boom was ~20 years long though, so there is about that much time for them to unload their properties, too. Per the US census, there are 77.3 million BBs. If they, nominally, have one house that they are going to sell over the next 20 years, that is ~3.9M houses per year, which would approximately double the current sales volume. The BBs are just starting to hit retirement age, and it will probably be delayed for many of them. Assuming sales volumes remain about how they are today, plus the BB's houses, we might get back to historically normal volumes. I am not expecting a flood of houses to come crashing prices down, personally.

bmwman91 says

The BBs are just starting to hit retirement age, and it will probably be delayed for many of them.

Yes, 60% of boobers believe they will work into their 70s, as sadistic as that sounds.

bmwman91 says

If they, nominally, have one house that they are going to sell over the next 20 years, that is ~3.9M houses per year, which would approximately double the current sales volume.

That's my point. Either the boomers continue working into their golden years, or they unload their homes and downsize so they can actually not die in the office.

I know what option I'd choose.

Not saying the extra volume will crash the market, but who knows.

Then I guess everything is alright then.

Sorry Goran, the bad guys won. (bad guys being the fed/Wall Street/government/RE industry). House prices will remain high in the areas we live. There is hardly anything available to downsize to, especially since the cheaper RE market is being consumed by investors & insiders. The lower end stuff will reappear on the market sometimes, but it has been flipped and probably has an asking price that is not enough less than the BBs current house to be attractive. With so many BBs under water, they will be living there and paying it off forever anyway.

Options for first time house buyers like us are limited to a) take it in the ass and overpay, or b) move far away. Accept it. Life is a little more tolerable once you do. Waiting for a train that never comes really sucks the life out of you. Call me a quitter, but I gave up on a free market.

bmwman91 says

Options for first time house buyers like us are limited to a) take it in the ass and overpay, or b) move far away. Accept it. Life is a little more tolerable once you do. Waiting for a train that never comes really sucks the life out of you. Call me a quitter, but I gave up on a free market.

It is frustrating that our government wants to increase the debt load of its citizens just to satisfy their banking buddies, but it's not sustainable.

I'm not waiting for it to fail. I know it will fail and continue to live life. It failed before. Why wouldn't it fail this time?

Did the cheap no-doc free money loans work?
Did the $8,000 tax credit work?
Did HAMP/QE1/QE2 work?

No, none of those things worked. Why would cheap money work this time around? Why would QE work this time around?

The only thing that is surprising is that Obama/Bernanke think their strategy will work.

Something tells me the Boomers will be less concerned about the Boomers, than the Liberal petty collective is.

I think once your at the point you can audibly pass gas in company, and remain expressionless, what happens to your house is the least thing on your mind.

I doubt if Mattlock is on their minds.

They'll either live in their homes, they've created for them selves while they can or die, or will be put in old folks homes by their greedy kids, that despise the Boomers anyhow.

So the real question is, who will these greedy bastard kids of boomers sell their mom and dads life work to?

CaptainShuddup says

So the real question is, who will these greedy bastard kids of boomers sell their mom and dads life work to?

To their less fortunate greedy bastard friends?

Goran_K says

To their less fortunate greedy bastard friends?

Glad I could help.

Goran_K says

bmwman91 says

If they, nominally, have one house that they are going to sell over the next 20 years, that is ~3.9M houses per year, which would approximately double the current sales volume.

That's my point. Either the boomers continue working into their golden years, or they unload their homes and downsize so they can actually not die in the office.

I know what option I'd choose.

Not saying the extra volume will crash the market, but who knows.

I suspect many of them have paid off their homes. Given the choice between paying only maintenance & taxes vs selling and renting, many will probably choose the former.

In CA, Prop 13 will encourage many to stay and pass on the homes to their kids. Who knows what the kids may do with the homes, but either way it'll either give them a place to stay for cheap or they'll have enough $$$ to finance a home-purchase of their choosing.

That's assuming their kids want to live in the home, or even stay in the area.

Goran_K says

That's assuming their kids want to live in the home, or even stay in the area.

Like I said, even if the kids sell the homes, they'll have enough $$$ to buy another one somewhere else.

I think we're already seeing some of the effects of it now with the large amounts of cash purchases. Not all are investors, many are kids spending their parents/grandparent's money. Price/Income ratio will never tell the whole story when there's a Wealth component lurking.

bmwman91 says

the bad guys won

No truer words were ever spoken. The bad guys won, made tons of money, and have it in reserves. Corporate profits are up, and banks have more money then they know what to do with so they speculate.

Those sweet heart deals of residential housing selling to investor groups are at $150K per unit on average down from a median price of $226K on avergae nation wide.

The longer the can gets kicked down the road the more income the banks, speculators, and investors make. It's just another little cog in a bigger wheel of cash returns for cash.

So, you can wait until the cows come home for residential home prices to come down.

There will always be buyers, and if you look at the stats the buyer pool is small, and affluent, a lot of you people are probably affluent, you don't want to buy because of the price, or the fact prices are going down.

The only way to win is to get rid of the debt. The student loans have to be the biggest banking scam in history, but I don't really know that. Credit cards should be outlawed. Mortgages should be paid off.

If you buy a house you should figure on paying it off. Where's the problem with that?

You don't want to hear about it, but buy a cheap property, pay it off, fix it, sell it, and move on to the next one.

A family used to move an average of three times to get into a dream home, today that want that Dream, today.

Nobody wants to work any more. Nobody wants to work the angles, everybody thinks magic will happen.

David Losh says

Nobody wants to work any more. Nobody wants to work the angles, everybody thinks magic will happen.

FHA, HAMP, Welfare socialism etc.

Henry Ford built his company with $700,000 (inflation adjusted).

Elon Musk can't even reach profitability with $500,000,000 from the government.

This country is doomed if we don't stop being lazy.

zesta says

Like I said, even if the kids sell the homes, they'll have enough $$$ to buy another one somewhere else.

That's assuming the homes are paid off free and clear, or have any amount of equity at all. Boomers aren't known as the frugal generation.

No one is going to buy anything with an anchor.

Goran_K says

Who will the boomers sell their homes to?

Why sell? I didn't know BB have no kids.

Do you know what the average boomer retirement account looks like?

To retire, most boomers will need to sell, and that's assuming they have equity. Many boomers will probably work into their mid-70s, and die in the office if they can't profit from a sale.