Do Demographics Affect The Housing Market?

Published on
December 18th, 2019
Duration
20 minutes


Do Demographics Affect The Housing Market?

The Expert View ·
Featuring Laura Kusisto

Published on: December 18th, 2019 • Duration: 20 minutes

Will aging populations lead to a housing glut? Laura Kusisto, reporter at The Wall Street Journal, argues that generational churn will leave houses – and in fact, whole neighborhoods – empty as baby boomers age and millennials flock to coastal cities and refuse to replace them. Kusisto argues that these demographic changes could cause a chronic oversupply of housing that will have profound impacts on the economy and society. Filmed on December 10, 2019 in New York.

Comments

Transcript

  • JE
    Jonathan E.
    19 December 2019 @ 11:05
    more women please
    • AK
      Ado K.
      20 December 2019 @ 10:09
      Lets keep stuff like this away please, RV delivers great insightful guests. Who cares about what gender or ethnicity these guests have. The importance is the information that we obtain from subscribing, lets tune into signal and not noise (gender politics)
    • WM
      Will M.
      29 December 2019 @ 15:01
      Ado 100% agree.
  • dp
    david p.
    22 December 2019 @ 23:17
    70% of the USA's GDP is based on Consumption. Buying a home, fixing it up, furnishing it carry the economy and property taxes allow local politicians to continue to tax and spend. You are probably much better off NOT owning a home unless it is a multi-unit building. The ideal scenario would be to buy a building that you can live in and use the rest for a business, in essence living "rent free" If municipal pensions start to fail, local taxes will need to be raised to pay their pensions. This could discourage a lot of people from owning anything
    • SC
      Sean C.
      27 December 2019 @ 21:58
      When my parents come from the UK they are always amazed at how quickly things get built in the US compared to the UK!
  • JL
    J L.
    23 December 2019 @ 22:31
    Rent minus interest is just the premium of a put on a potentially failing society that will probably see wealth punished in the next one or two decades, perhaps people are right not to buy?
  • dp
    david p.
    22 December 2019 @ 23:11
    She nailed NH. When they started talking about expanding I-93, I spoke to the politicians in charge at the time and make several suggestions on adding rail down the center with Bus lanes (that could be used as express, HOV or special transport lanes as well. They never look to the future and updates are usually obsolete before they are started. When I go to China, I see them add infrastructure in hours. In the USA, it is year and years and by the time they finish, it needs to be repaired again.
  • TB
    Thomas B.
    21 December 2019 @ 22:27
    Post WW2 home ownership rose pretty consistently through to just before the last bubble bust, getting to around 69% in 2006. it's now back to 62%, a rate not seen since the sixties. That prior growth overlays with a spatial fix that had new build SFH in ever further sprawl. Those car dependent exurbs will be hit hardest as the boomers seek to sell en mass...
  • WB
    Wesley B.
    18 December 2019 @ 18:56
    I think housing mkt will be challenged by the life cycle of Boomers AND Millennials, but I don't think the habits of one generation will be much different than the other. The houses that the Boomers own now that Millennials don't want they WILL want but it will be later in life. There will be some gaps in time that will be difficult because supply and demand aren't in balance but I think it will be ok in the end. I am seeing Millennials now move to my suburban town and they readily admit that they had no idea life in the burbs was so much easier than that in the city. When you have a couple kids and realize that you can't go out all the time or simply may not want to anymore the suburban life begins to have some appeal. Regarding the death of smaller cities, I think this is total BS. Bear mkts are the author of Bull mkts. We are are seeing people leave SF en masse to go to smaller cities with lower cost of living and businesses are following them. Where will they go when Austin and Denver become too expensive? They will move to another city that offers a lower cost of living.
    • TB
      Thomas B.
      21 December 2019 @ 22:16
      Agree that many mid sized cities will be quite resilient. I actually think the coastal cities (or London, Toronto etc) have more stretched multiples and will see bigger corrections in the mid term. Inner suburbs could fare quite well. I don't fancy the chances of the exurb dormitory sub divisions, that are completely auto dependent.
  • DC
    Darren C.
    21 December 2019 @ 02:18
    I had/have a bias against university professors that had never worked in the real world and journalists. I may have to revisit my bias against journalists. In my defence when I was in the middle of a newsworthy event what was being reported was unrelated to what was actually happening. So, yes I did find this interview useful.
  • AK
    Ado K.
    20 December 2019 @ 10:05
    In Europe the demographic decline is in many countries even more severe than in the US, here you can already see what Laura is talking about. Many people in North Sweden who had houses worth around 50 000 USD some 5 years ago and thought it would be worth 100 000 USD by the time they reached pension now have to face the reality that the value of their house is zero since nobody wants to move to the rural area where they live. It is quite a sad site, and when driving through these places you see more and more abandon houses, where the children do not even want to inherent the house due to it merely being a liability, so they just do not even legally claim it.
    • JM
      John M.
      20 December 2019 @ 18:37
      shocking.
  • fT
    forecast T.
    20 December 2019 @ 18:33
    Look @ crime rates. Demographics don’t matter.
  • TE
    Tito E.
    20 December 2019 @ 08:54
    Thanks Laura. Really enjoyed your take.
  • AC
    Andrew C.
    20 December 2019 @ 01:12
    The more you look at the future the more it changes because you looked at it. Price changes fundamentals. If boomer houses become cheap, millennials will buy them
  • NR
    Nelson R.
    20 December 2019 @ 00:41
    Laura says she is a Journalist, she should be managing capital.
  • CL
    Chris L.
    19 December 2019 @ 17:39
    So, say boomers (and/or millennials) flock to coastal cities, effectively leaving middle 'Merica. Would that not offer opportunities outside of coastal cities? What may be an oversupply regionally, coastal cities cannot even support their populations now; and it's the coastal cities that are the most expensive.
  • T
    Thomas .
    18 December 2019 @ 19:45
    Impressive analysis.
  • GC
    George C.
    18 December 2019 @ 18:50
    Interesting but nothing new here.
  • CM
    Chris M.
    18 December 2019 @ 17:12
    I can attest to areas in the rural south. Homes in my wife's hometown in the foothills of NC have not appreciated at all over the last few decades. Her family home, which was in one of the nicer neighborhoods in town, was bought by a family friend and renovated. This person just put the home on the market for $400,000 (4,600 sq ft - nice home) and couldn't sell it over 2 years. Zillow lists the value at $325,000. Towns in the 8,000 to 15,000 population range have some, but not enough, amenities like shopping, restaurants, and recreation (much less good jobs) to attract millennials and Gen Z to stay or move there. Though she mentioned cities like St. Louis and Cleveland, believe it will be these smaller cities that see a surplus of homes going forward.
  • TO
    Toby O.
    18 December 2019 @ 16:20
    I met a headhunter who told me he had two big problems with Cleveland. First, when doing a national search, getting candidates to consider moving to Cleveland. His second problem was getting them to leave. ;-)
  • RM
    Richard M.
    18 December 2019 @ 14:55
    Very interesting and enjoyable interview. Laura brings up some points I had not previously thought about regarding boomers and the unloading of their monstrous Mc-mansions and how that might affect their moves to retirement locations. Very good!
  • CB
    Chris B.
    18 December 2019 @ 14:13
    A demographic tsunami is coming and very few people are talking about it, let alone planning for it. From interest rates to home ownership profiles and everything in between will be affected. Thanks RV for bringing this back into focus.