How The Baby Boomer Bubble Will Affect Real Estate Prices
Many think that the current housing mess will be a relatively short-term affair that should see a return to normalcy within the next few years. But, a “generational housing bubble”, fueled by the same baby boomers who have been bidding up prices since 1970 as they moved up the housing ladder, may portend poorly for domestic real estate sales.
As retirees become more numerous than the working young, shifting into seller mode, researchers postulate that the market imbalance could come quickly around 2011, causing housing prices to fall. For most of the American life span, the rates of buying and selling remain closely related because those who sell one house typically buy another.
When people enter their late 50s and early 60s, as the leading wave of baby boomers has now done, buying and selling are in balance. When they reach their mid-60s, though, sellers start to outnumber buyers. And when they hit their 70s, sellers dominate.
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