What Happens To The Real Estate Market When All The Boomers... Die?

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My Other Channel: @HowHistoryWorks

Edited By: Andrew Gonzales

Music Courtesy of: Epidemic Sound

Select Footage Courtesy of: Getty Images

All materials in these videos are for educational purposes only and fall within the guidelines of fair use. No copyright infringement intended. This video does not provide investment or financial advice of any kind.

#finance #realestate #business

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It doesn’t mean anything to be Working class or middle class anymore… The only thing that matters is if you own a home or if you don’t.

The home you live in now statistically makes more money than you do and the last hope that a lot of young people have to catch up is getting a house gifted to them by a relative... which begs the question. What happens to the real estate market when all the boomers… die?

There is an old saying that the best time to start investing was 30 years ago, the second-best time is right now. But that conventional wisdom might not hold up in today’s market. Buying a home at the right time could set you and family up for financial security for the rest of your life. The only thing is, the right time was when you were still in school and if you try to buy a home now you will be taking on record high interest rates, record high prices AND record low availability all at the same time… People sell homes for two reasons, because they want to and because they HAVE to. Nobody who already has a home WANTS to sell it because most Americans have been able to lock in record low interest rates. If they sell their house and buy another one, they will get a new mortgage at interest rates which will TRIPPLE their payments on a home of the same value. According to data from the national association of realtors, eighty-seven percent [87%] of new home purchases are made using a mortgage, and the average down payment of a first home buyer is only seven percent [7%]. This means higher mortgage rates are worth avoiding at all costs.

A report by the wall street journal found that even when homeowners moved interstate, they would hold on to their homes and rent them out and then rent another house to live in… Everybody that wants to sell their home is waiting for interest rates to fall. Everybody who wants to buy a home is also waiting for interest rates to fall. And everybody who is stuck renting is being forced to compete with people who already own a home but don’t want to sell it because they have locked in a sweet interest rate.

The players in the real estate market are in a Mexican standoff, but the renters are stuck fighting with a Banana. The only hope for people who just want to buy a home is to get it off someone who NEEDS to sell. According to another report published by the national association of realtors the average home seller in America was SIXTY!! [60] years old!

So it’s time to learn How Money Works to find out why you probably won’t benefit as much as you are hoping from the boomers passing down their homes…

[PhillKaggitz]

My first financial mistake was being a sixth grader instead of buying a house. It has been an uphill battle ever since.

[Ben-kzkm]

It's like playing Monopoly. But everyone else has been playing for ten rounds already, all the properties are already sold and the the game board is on fire.

[Beatricegove]

Asking a real estate agent whether you should buy a home right now is like to asking an alcoholic whether they think you should have a drink lol. Homes in my neighborhood that cost around $450k in sales in 2019 are now going for $800 to $950k. Every seller in my neighborhood is currently making a $350k profit. Simply unreal. In all honesty, deflation is what we require. The only other option is for many people to go bankrupt, which would also be bad for the economy. That is the only way to return to normal.

[NicholasBall]

Back in 2007, during my time working in real estate, I witnessed people purchasing newly built homes from builders with the plan to sell them before the closing of escrow to another buyer for a profit. The crash hit hard and fast, and I vividly recall many of these units ending up foreclosed upon, with the builder's plastic still covering the carpets.

[NixonAngelo]

My dad and I had the same job in the same metro area. In 1969 he bought his first condo in the Los Angeles area for $16k and his annual income was about $12k. When I started the same Job in 2010, that same condo was worth $300k and my annual income was $65k. Today, it's worth over $420k and has similar mortgage interest rates as in 1969. I currently make around $110k a year and my father's income never went over $70k a year in his prime. To have the same purchasing power today, my income would need to be about $323k a year.

[dnkjxcr]

Law should be updated to make corporate home ownership illegal

[AHomelessShoe]

My biggest financial mistake was being born.

[Aarrenrhonda]

For boomers and senior citizens, the current market and economy are unnecessarily harder. I'm used to simply purchasing and holding assets, which doesn't seem applicable to the current volatile market, and inflation is catching up with my portfolio. My biggest concern is whether I'll survive after retirement.

[Falconlibrary]

I love getting financial advice from a generation whose job hunting experience consists of walking into a place where they wanted to work, asking if that place had an available job, and getting hired on the spot.

[Mostly_Safe]

The fact that housing is considered an investment is one of the biggest issues. Limiting how many homes a person can own and getting investors out of the housing market should help normalize things but at this point, I'm just hoping for a Thanos snap

[LoughBellis]

I suggest you offset your real estate and get into stocks, A recession as bad it can be, provides good buying opportunities in the markets if you’re careful and it can also create volatility giving great short time buy and sell opportunities too. This is not financial advise but get buying, cash isn’t king at all in this time!

[wierdwisdoms]

I love how we went from growing people told me I could do whatever I wanted if I worked hard enough to being grown working harder than we ever have and still not being able to do the most basic things like owning a home.

[Erick-bgcw]

Can’t begin to tell you the amount of people that I’ve seen take care of their aging parents and sacrifice their own life, career and family, just to find out mom and dad had drained all of their money to fund their medical and living expenses. Leaving them with NOTHING. I work in banking so I see this almost on a weekly basis.

[Unlimitedpowah]

"Housing is so bad I'm going to have to live with my parents!"

Me: Wow... your parents have a house?

[oOfretlessOo]

"Permanently exiting above-ground real-estate market" is the coldest and most polite phrase I have heard this week.

[rainmanslim]

I lucked out. My aunt invested heavily in real estate during the 80s and 90s and owned several homes, she sold most and one of them she left to me after i was asked late past year how the place i was renting is and i told them that the new landlord was doubling the rent so id likely need to move back in with mom again at 30.

I'm immeasurably grateful for this and live is finally improving after 12 years of constant struggling to stay out of poverty, but the fact the real estate market is so fucked that only the ultra wealthy can buy a home is horrific. We need to treat housing as a product again, not an investment.

[flubby]

As someone who has worked in the retirement housing community I find it hilarious to hear my fellow millennials talk about how they will have to wait to retire or get a house when their parents finally die. I cannot count the number of times I have watched boomers drain their savings to live 5 years long all the while leaving their kids nothing. I would bet most, if not all, of the boomer's wealth in any form is going to medical expenses, care and retirement housing. Boomers inherited the greatest wealth a generation has ever built and given that they are some of the most shellfish and spoiled people in our history, they would rather bury themselves in gold than give it to their kids.

[littywitty]

Our greatest mistake was not buying homes when we were in elementary school. Our 2nd biggest mistake is that we aren't on the streets protesting these practices

[sarawilliam]

I'm in Michigan, and the housing market here over the past 7-8 years has been unprecedented. Houses that were purchased for $130K in 2015 are now going for $590K. These are tiny, poorly constructed 950-square-foot homes in quiet, mediocre neighborhoods. Meanwhile, nicer, average-sized homes in better neighborhoods that were over $300K a decade ago are now selling for $750K+. It's wild.

[brandillysmom]

When all the boomers die, equity firms will buy up all these properties, or as many as they can, and rent/lease/airbnb them out to whoever or just let them sit until they fall apart. Just my opinion.