Newly, >>>One of the homebuilders noted that while the r.e. market has slowed, nothing in the greater economy or demographics has changed and therefore he foresaw a continuation of the rise after a lull.<<
Demographics have changed?? To what extent? I think Greenspan said something like "you don't know you have a bubble until it pops." Are the demographics that much different than five years ago. In September of 2001 we had 2,405,000 new and existing homes for sale. Last month we had 4,303,000 homes for sale.
Looking at the demographics and census information, our population grows a bit less than 3 million a year. Each household has about 2.59 people. That's additional 1.158 million households. Of course some will rent and some will buy.
Looking at it another way, the number of youths turning 22 years old and potentially moving out on there own is about 4 million a year. That number is up on avergae about 250,000 from five years ago. However, census figures show that those gaining age of independence will remain the same for about the next 15 years.
Of course over the next 15 years the number of folks dying will increase. That will weigh on demand as well.
And then again you have immigration. I have no idea how much that will increase or decrease over the next 15 years.
Back to your point, I wonder what the builders see in demographics that they think home sales can pick back up to the recent high levels. Home ownership has increased from about 66% to nearly 70% over the last 5 years. This really did not have as much to do with demographics as it did with lower interest rates and creative mortgages. I think we know that a portion of those folks are in over their heads with homeownership. I would not be surprised to see the percentage of owner occupied homes decrease here, or at best flat-line.
AI
