[quote=patientrenter][quote=Russell]Bob,
We covered the baby boomer issue pretty well in the early days of this blog. I think most of us thought it is reasonable to think this could hurt future boom potential.[/quote]
Rus, I know you don’t usually want to get ‘pinned down’, but do you think that it’s more likely that home prices, indexed to average per capita income, will be higher in 20 years, or lower?
A true believer in the demographic driver theories of Dent would say lower. True believers in the power of the past 50 years to predict the future would say higher.
OK, buddy, whose side are ya’ on?[/quote]
I don’t have the academic basis on this topic to do anything but avoid getting pinned down :).
How does being in either camp affect the decision you make today?
I just see too many variables to make a choice that far out. The ratio could be academic. Could our standard of living go down,on average, with a result in either direction?
It is plausible that baby boomers will have attenuating effect on prosperity vis a vis real estate. Because of the liquidation of their assets and the expense involved in taking care of them in old age.
Besides any negative babyboomer effect I think our standard of living, to some degree, normalizes to the world’s standard because of globalization.There will always be an elite class for whom housing will not be a huge portion of their total wealth but this group won’t be defined within a national scope. This experience could be a process spanning much more than 20 years,of course. It certainly seems like it is well underway?
I still think it is most important for more average folk,like yours truly, to focus on the business cycle at hand and perhaps even have some confidence that good work within it,including hard nosed investing in real estate, will be rewarding.
