Baby boomers busted by housing market collapse
It also says that what baby boomers do in the coming decade will be no less important than when the bubble was inflating. There are 78 million of us, and in 2011, the population of senior citizens (a term that I’m predicting boomer vanity will drive into extinction, by the way) will be growing at a rate that’s faster than that of the general population.
The Urban Land Institute’s study, called “Housing in America: The Next Decade,” divides us into two groups: older and younger (though I’m not about to blurt out which one is mine). The older group, aged 55 to 64, will continue to work, either out of necessity or choice. The news here is that just a few years ago, boomer studies were predicting that we’d put off retirement for the latter reason, that we liked the busy-ness of work. Those studies, though, were before the stock market shredded a generation’s 401(k) plans. Now, the money is doing the talking.
The real estate takeaway for this older group is, in the institute’s verbiage, that many boomers will be “trapped” in their suburban homes until values recover. Not only are they waiting for their homes’ values to emerge from underwater status, but their houses, the institute says, tend to be bigger and farther out in suburbia than the next generation wants.
The younger boomers (aged 46 to 54) also won’t have an easy time selling their homes. These people are in their prime earning years, but they’re facing flat incomes and the ugly truth that many of them have very little home equity. In the olden days (five years ago), they would have been prime candidates for purchasing vacation homes, a prospect that now, for the aforementioned reasons, is “greatly diminished,” according to the institute.
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