[quote=livinincali]Boomers are in their peak asset accumulation years still. They are near the top of the wage scale and all looking for assets to fund their retirement years. Assets are purchased with discretionary income, while mortgage debt is debatable stocks and bonds are not. The problem is that not only will some boomers look to cash in their assets, the demand for assets from the boomer generation will shrink as well. We all know the next generations for the most part as broke as hell and up to their eye balls in debt. Always ask yourself who are you going to sell to. Could your kids or your neighbor kids afford to buy your house at it’s current price. You have to sell to somebody’s kids.
I just don’t see how this ends well. At a macro level I expect most assets prices to crash as the supply/demand curve switches. That said there are probably various pockets of assets that will always remain valuable, it’s just incredibly difficult to guess right. The bottom line is comfortable retirement for the masses is a new concept in society and we likely don’t have the economy or resources to support it.[/quote]
In total agreement with this. The combination of Boomers reducing their spending/accumulation, along with the reduced relative purchasing power of their kids (the incredible debt loads and lack of good jobs) is the greatest threat to asset prices, IMHO.
I don’t think that Boomers will necessarily sell their homes as they age, but the kids who inherit these homes likely will, especially if there is more than one heir. The Boomers’ kids are broke, and selling Mom & Dad’s house (and stocks, bonds, etc.) after they pass is the only thing that will allow many of them to climb out of their financial holes.
