Interesting column written by Ken Harner, Washinton Post. One of the causes for the housing crisis in several cities is the Boomers reluctance to leave their homes after retirement. Boomers account for 55% of all the nation's home equity, nearly $8 Trillion. There are a lot of reasons they are not moving. Many of the cities that feed the migration to AZ are having extreme housing shortages and 10+% annual median price increases. In Seattle 70% of new construction is now apartment buildings. Boomers are rejecting that option. Finding a smaller home or condo to downsize into is very difficult. No one can predict where/when they will go but they will be arriving with unprecedented amount of equity.
Perhaps a more accurate measure of house appreciation are the Case-Schiller indexes which measure prices of homes sold over time. There are very few markets where homes are actually appreciating (and selling) at a rate of 10% annually according to Case-Schiller. Markets such as Seattle, San Francisco and Los Angeles are among them. There are housing economists (not related to the real estate industry) that are indicating these markets have entered into a dangerous bubble fueled by other economic bubbles (tech?) and foreign investment. As the foreign economies teeter (think China here) those dollars may be quickly flying away. I'm not sure those (bubble) markets feed much demand in the Phoenix area.
Thanks for your response. Using Seattle as an example. As of Nov 30 th there were <3000 listings in King County. A balanced market would have 9000 listings in December. There are 6000 new residents moving into the county each month creating a housing demand far exceeding inventory. That population gain is not a fluke. It has been consistent and on going fueled by Amazon, Zillow, Microsoft, Starbucks, Costco, Google and many more. Amazon is doubling its Seattle headquarters workforce short term. The 10% growth I quoted is real and has been consistent since 2011. The Seattle area did not get hit as hard by the housing downturn as many other markets. Can't agree with you that Seattle and San Francisco are bubble markets. I would also say that Washington state has a significant amount of residents who have moved to AZ either as winter residents or as permanent residents. Thanks again for your input. BTW...I notice you live in "the cities" I am a native Minnesotan.
Here's the thing about boomers...there's so many of them the numbers game simply means there will always be a huge percentage who age in place and another percentage who will want to move to warmer climates. I've written often from the Del Webb Sun Cities Museum archives were the DEVCO projections only 6 to 8 % of the eligible population will ever be attracted to age restricted living. Obviously those percentages are up a bit, but not much. It doesn't matter though. With 10,000 baby boomers reaching retirement age a day, there will be a steady stream of buyers for the Sun City type lifestyle. What matters most is Sun City stay relevant and current by evolving like it has. Reinvesting in our community to the tune of a hundred million dollars over the next 12 years is what will help shape our future and entice retirees (and those still working to move here). And of course with winter here and snow falls reaching up people's backsides we'll look even better. Can anyone tell me why people who can afford to get out of those ugly winter storms doesn't? I don't get it.
They probably don't want to leave family. However, Snowbirds solve that problem. Unfortunately, Snowbirding is an expensive way to go.
