The next housing market crash might happen in less than a decade, according to an article from The Atlantic Cities. An aging baby boomer population could serve as a daunting omen just as the market has been recovering.
As boomers sell their homes for more affordable residences, an increase by the millions of housing supply will create two classes of seniors in America, suggests Arthur Nelson, director of the Metropolitan Research Center at the University of Utah.
By 2020, Nelson projects there will be around 35 million over-65 households in the U.S. By then, he calculates that those seniors who wish to become renters will be trying to sell about 200,000 more owner-occupied homes than there will be new households looking to buy them.
By 2030, those units could rise to a half a million housing units a year, Nelson speculates.
“Ok, if there’s 1.5 to 2 million homes coming on the market every year at the end of this decade from senior households selling off,” Nelson said in The Atlantic Cities article, “who’s behind them to buy? My guess is not enough.”
Demographics look to complicate things even further, the article suggest, as the American education system roadblocks quickly-growing minority populations from earning the income needed to buy these homes.
“Between changing preferences and declining median household income because of poor education – because we’re not willing to spend money on education,” Nelson says, “that means we can predict the next housing crash, and that’ll be in about 2020.”
Aging in place will not be feasible among 90-year-olds, Nelson suggests, as these people realize that they cannot perform household duties like mowing the lawn or pay for repairs.
His suspicion is that “hundreds of thousands, maybe millions of those households in the 2020s to 2030s and beyond” will simply give up the house and walk away.
Written by Jason Oliva