If you think the housing prices will bottom in 2011...

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ocpop_IHB

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If you think the housing price will bottom in 2011, think again.



http://www.latimes.com/classified/realestate/news/la-re-lew10feb10,0,5165011.story



The gist of the story:



"Now, 78 million boomers are about to enter their twilight years when homeowners tend to become sellers rather than buyers. And as a result, the USC duo expects there will be "many more homes available for sale than there are buyers for them."



As the elderly become more numerous than the young, and shift into seller mode, the researchers postulate, the market imbalance could come quickly around 2011, causing housing prices to fall."





Most macroeconomic forecasts are about as right as flipping a coin, but something to think about.
 
uuuhhh ohhhh the world will collapse.... houses will sell again for $50k.... (in the greater L.A. area)



you just keep paying rent and tell yourself how much money you will save (the money that will crash in the stock market going parallel with your prediction in the housing market)...
 
I would comment on the "straw man" argument presented above, but it was so lame, so far removed from anything anyone has even suggested, it isn't even worth the time I have already wasted typing now...
 
<a href="http://www.economist.com/">The Economist</a> did several articles on this, and after flmgrip's post, I am too lazy to find them.





Don't worry about us housing bears, I mean, it's not like we have been right or anything like that. Damn crystal ball... you said the foreclosures would only be as bad as 92. WTF? They are breaking the worst year's numbers from 96 like crazy. I need to find a more pessimistic crystal ball, this one is just not doing a good enough job. All the predictions have not been pessimistic enough.
 
2011 is early for the baby boom effect. Heavy selling doesn't come until the 70s, and of course the baby boomers weren't all born in 1946! It won't be until 2020-2025 that a large group of boomers is in the net selling category. By then the millenials aka echo boom will be into peak buying years, so I don't see this particular demographic change having a big effect.
 
>2011 is early for the baby boom effect. Heavy selling doesn't come until the 70s





Yea, but how many people here are willing to wait 62+ years?











Before you respond, I am being intentionally obtuse.
 
I agree with FairEconomist. This phenomenon, if it happens at all, will be spread out over time rather than occur in a tsunami type wave. Also, the Baby Boomers may not decide to downsize, particularly here in California. Downsizing is supposed to lower your expenses, but if you have a proposition 13 tax rate that is very low (i.e. you bought 30 years ago,) downsizing may actually cost your more money. Many Baby Boomers may decide to age in place. In Florida, the turnover of properties due to death of a senior citizen has been going on for decades. It has not depressed housing prices there in the past.
 
From the article"



"Historically, seniors don't become net sellers in Arizona, Florida and Nevada until they reach 75. But the opposite is true in 13 other states -- Alaska, California, Connecticut, Illinois, Indiana, New Jersey, New York, Maryland, Massachusetts, Michigan, Minnesota, Ohio and Rhode Island. In those states, the crossover starts at age 55."



It is hard to tell from my experience whether this is true or not. I know a lot of people who have move to California to retire as well as people who have moved out of the state to retire.
 
Property tax limits can really make a difference. When I calculated the NPV of our prop 13 restriction back in 2006 when I was thinking about selling it came to about 8% of the value of the house. Add in the 6% broker fee and 2% for sheer hassle and 16% of the value of the house was going to be lost by the process of selling. That was pretty powerful incentive to stay, and will be when I'm 65 too.
 
<p>Talking about bottoms, this why the bottom is still far away.





Paulson is bad liar. My 5 year old son is a much better liar, he can tell me with a straight face that he already brushed his teeth when he hasn't done a thing.</p>

<p>What scares me is his body language, tells me all the things that he already knows but he's trying to sugarcoat.





From Calculated Risk:





Q for Paulson: Is the worst over?





Paulson: The worst is just beginning.





<embed id="VideoPlayback" src="http://www.youtube.com/v/ETQj3a221EQ" width="425" height="350" type="application/x-shockwave-flash" wmode="transparent" quality="high"></embed></p>
 
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