Wednesday, June 22, 2011

BOOMERS COULD MESS UP THE HOUSING MARKET


Could there be a new trend in housing happening in the US?   

Over the past year I’ve had a couple of people over 70 write me and ask me about modular homes and if they are worth the money.  I always say that in head to head competition with site built homes, modular is better for a couple of reasons.  Things like quality, in-factory inspections, quick delivery and occupancy times and a couple of other things.

But yesterday I got an email that made me stop and think about the future for retired Americans.  The writer asked if any modular factory built houses for two families.  He and his wife have a house that has a small mortgage and they know another couple in the same situation.  Both are empty nesters and friends.

With the economy in the shape it’s in, they are considering moving into a single home, sharing a large kitchen, dining room and laundry area but having separate bedrooms, baths and living rooms.  They would share all costs which would allow each couple to purchase things that they now consider luxuries. 

I told them that they needed to contact a modular home factory, after visiting websites, and ask who the builder was covering their area.  Then they can sit down with the builder and design a home that fits their needs.   

I also told them that they should sit down with a lawyer to work out the details including what would happen if they find they not compatible or if one of them dies.  Details like this are as important as the house design.

They need to sell their homes quickly, take the equity and try to build a home that requires little or no mortgage.  Here is the problem that might be hinder their efforts however.

The oldest of the baby boomers — the generation of 78 million Americans born between 1946 and 1964 — have already turned 65. As the generation continues to age, some warn that there won't be enough Americans around of working age to buy all their houses.

"Older people are a ticking time bomb for the housing market," says Dowell Myers, a demographer at the University of Southern California. "What we've gone through recently could be nothing compared to what we have five years from now. When the boomers start to sell off their houses, there are going to be too many boomers and not enough buyers."

The boomers will not be leaving their homes all at once, suddenly flooding the market. And the housing preferences of younger Americans have yet to be determined.
More traditional factors, such as availability of credit, will ultimately be more important in determining price growth than demographics.

Dual, non-related families living under the same roof might become a reality for us over the next decade.  This could be another opportunity for the modular housing factories.

6 comments:

Anonymous said...

There already is a considerable movement toward this, albeit typically on a larger scale. See http://www.cohousing.org/

Anonymous said...

Older people often times has greay property and knock down homes. This is great for new construction. Every old timer house inmy neighborhood becomes an instant build.

Everything is different from neighborhood to neighborhood.

Dale Beck said...

I have already set several 2 family homes for people in this same situation.

Anonymous said...

WHAT - knock down homes. C'mon anonymous! So now the deal is we tear down our senior citizen's housing so we can have the lot to build on - I DON'T THINK SO!
Didya ever hear of helping those seniors with their property instead of trying to buy it out from under them to build a new home so YOU CAN MAKE TONS OF PROFIT??? Or, are you living in a neighborhood that is a step away from urban renewal? Still, we cannot take away the homes of seniors because we 1) do not like the condition of their home; or 2) want the use of their property to build new homes; or 3) we are just greedy and want ours regardless of how it may hurt others?

Anonymous said...

Knock down homes are not necessarily homes of senior citizens. In our area, we look for boarded up homes and then call the banks and buy the homes cheap and then knock them down and rebuild. You would be surprised by the number of boarded up and abandoned homes in urban areas that make good knock down build up properties.

Modular Home Place said...

What about the "Golden Girls"?