Just a very random example of what 4plex is saying is true.
I moved from Clairmont to Mira Mesa in the winter of 06. I began walking around my neighborhood to try to learn the area in a way alot better than you can get in a car. I do this in every area I live in.
I met a couple having a garage sale, selling most everything but the kitchen sink. Wondering if this was one of those mystical “repo” sales I had heard so much about on late night infomershals, I started talking to them. Nope, they were older boomers, 58 and 55 I think, who were the houses original owners from 1986. They had bought the house for something like 120k, and just sold for 500k.
1) They were terribly disapointed that they ONLY got 500k. They felt the house was easily worth 550-600k but they had to move now so couldnt sit it out any longer.
2) They were moving to the midwest to a house closer to the kids that was gonna cost them 85k. It was time to “retire someplace we can afford.”
This was their retirment plan. They were cashing out. They got out just in time, i think this was like March of 07. I dont think alot of their long time neighbors are going to be so lucky.
So 4plex I think you are correct in your revision of your post. They may on paper have equity and be ok. But they are nowhere near as rich as they had counted on as in their minds this money had already been allocated to retirment and “spent” (ie they couldnt blow it). Anything less than peak pricing was crushing.
More and more retiries will have to sell into a depressing market inorder to retire, with the ones to the door first getting the biggest crumbs left. Are alot of boomers staying put, sure, ofcourse. But the boomers are a big generation, and not everyone needs to try for the door inmass to kill a weak market.
In short, I do think this theory has legs, even if not every boomer is planning on selling. The demand just wont be there as boomers try to get out, and the supply will be of the must sell kind, even if it isnt so on paper.
