By Mike Bodeen · 18 September 2023
As our readers are aware, the Bodeen Team has been sharing for awhile about a housing shortage that may be more chronic than anyone wants to believe. We’ve been exhorting prospective first-time buyers to get into the game even though we’ve passed through a huge home appreciation increase and are currently experiencing higher mortgage rates.
One of our concerns has been the acquisition of single-family homes by large corporations. They are buying and holding (read: renting). Builders, especially in Phoenix Metro, are building thousands of single-family detached homes and condo/apartments: to rent! Some of these builders then convey the project to the corporations. The obvious result of this certainly helps supply a needed rental market but does nothing to help folks affordably get into homes to own.
We’ve continued to report ad nauseum about how our high interest mortgage rates are giving prospective sellers zero incentive to sell and buy. They’re (we’re) staying put. What we’re left with is the basic rules of life to gain inventory to sell, such as death and divorce.
Then recently, I ran across an interesting article from Stacker Media, strongly suggesting that we Boomers are the ones hoarding housing.
https://stacker.com/real-estate/boomers-are-hoarding-all-houses
Stacker points out that the Boomer generation (those born between 1946-1964), though not the largest generation by population, nonetheless controls the lion’s share of America’s real estate market and has for the past quarter century.
The article points out that the Boomers, especially the wealthy and educated, are living longer and are staying in their homes longer – because they can. Boomers are now aged between 59 and 77. According to a 2022 University of Michigan survey, 90% of adults between the ages of 50 and 80 say its important for them to age in place.
Per Stacker: “Not only are the boomers hanging on to what they have longer than in the past, but they’re also buying more homes than other generations. Over time, the Silent Generation has declined as a share of overall buyers—as have Gen X, who are in their more stable, child-rearing years. Bucking the trend, the share of boomer buyers spiked from 2022 to 2023. While some are downsizing to more manageable homes, others are becoming snowbirds and owning separate homes for the summer and winter months. Still others are deciding to try their hands at real estate investing, scooping up homes to use as rentals.”
As a Boomer and a career real estate professional, and one who owns multiple properties, I’m certainly bullish on owning real estate, but to be honest, I never thought I’d see the day approaching when affordable options are all gone. I’m greatly sobered for our younger generations.