Thursday, March 7, 2013

Demographic changes shift housing demand

Baby boomers built large homes on big lots (article):

...80 percent of new homes built in that era were detached single-family homes. A third of them were larger than 2,500 square feet. And most startling – "I checked my numbers over and over again,” a bemused Nelson says – 40 percent were built on lots of half an acre to 10 acres in size. 

But a much bigger chunk of today's new buyers want condos and urban town houses.  So do the aging baby boomers, now empty-nesters, wanting to downsize.  So what will the effect of this shifting demand be?
“Between changing preferences and declining median household income, ...that means we can predict the next housing crash, and that’ll be in about 2020.”

...“My suspicion,” Nelson says, “is that many hundreds of thousands, maybe millions of those households in the 2020s to 2030 and beyond will simply give up the house and walk away.”

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