So for every 10 net new jobs created, one SFH is getting built. And probably a lot of those are replacing tear downs. That plus strong in income growth means more cash chasing fewer homes.
Not to mention many people retired but are staying in their SFH for another 25 years.
Up here in Escondido, I often thought of the number of SFH occupied by retired persons was a risk but as I realize that many of them will live to be 80+ perhaps 90, the day of reckoning seems to be a bit further off than I’d thought a few years ago.
I don’t know how much good data there is on value/income impact of one generation dying off and the transfer of property to a younger one with perhaps lower income and less capability to support the high price as they are “buying in” vs. having ridden the appreciation up over decades.
I guess much depends on the relative numbers and the length of time i.e. a 10% transfer over 10 years wouldn’t have the same impact as a 20% transfer over years. At this juncture, it seems like realtors/investors buyers would just welcome more inventory in general. Would be interesting to know if there is data as to why sellers sell (moving/retiring/death) etc.
If there is significant fluctuation, then perhaps there is a potential inventory overhang at some point but don’t see it in near/mid term.
“I often thought of the number of SFH occupied by retired persons was a risk but as I realize that many of them will live to be 80+ perhaps 90, the day of reckoning seems to be a bit further off than I’d thought a few years ago.”
Agree, and something I’ve mentioned on other threads is the fact that we, as well as everyone we know and talk to (especially in CA) plan to pass all of their properties on to their families.
Most have continued to acquire more property–especially during the
recession–but I know very few people who have sold any of their properties in at least the past 10 years, maybe longer, so we’ll also have to see what impact that aspect may have in years to come.
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