OK Boomer, Who’s Going to Buy Your 21 Million Homes?

[ironchef]

Which reminds me, my area is becoming primarily renters now. Time to get out. Good thing I bought my house 20 years ago eh.

Rent it out so some poor schmuck now has to pay $5K/month in rent to you.

 

[nooby_mcnoob]

Rent it out so some poor schmuck now has to pay $5K/month in rent to you.

That's the idea. Fucking idiot government/central banks. They need to dis-incentivize this bullshit. I rented it out already a couple of years ago when I was living in a sweet downtown apartment and it was free money.

Fucking bullshit. What world are we creating. I hope my children leave North America and force an economic collapse.

 

[destriero]

what happens to valuations when 20MM homes are for sale with no natural buyers?

 

[ironchef]

Most of the homes will be tied up in reverse mortgages because boomers are the most fiscally irresponsible generation of our time.

This should read "banks will repossess 21 million homes in 30 years". Clickbait title designed to get millennials excited for something that will never come.



Everywhere is becoming a renters paradise. Rents aren't locked behind 30 year mortgages, can be raised at will (usually the second you catch wind someone caught a raise at work), and generate perpetual income. Pair that with deep Chinese investment in west coast real estate, falling home building numbers, and you've got a delicious recipe for permanent serfdom.

Turning your home into a rental should be a painful and expensive process. It brings down home values, ruins neighborhoods, and creates significant inequality in the form of perpetual rent relationships. Imagine reaching your retirement and not owning a home - how anxiety inducing.

Actually at today's price (in SoCal, NYC SF...), ownership doesn't make financial sense, rental return on capital also doesn't make financial sense.

 

[Option_Attack]

Sorry, you lazy millennial f-ups. I ain't sellin'!

 

[ironchef]

what happens to valuations when 20MM homes are for sale with no natural buyers?

Home building, creation << household formation so I don't think there will be an oversupply.

Even if there is, using 2007-2009 as a guide, it will quickly (within a few years) work itself out. The smart money will keep some of their powders dry and will be able to pick up some housing bargains like in 2009-12.

The beauty of the US financial system is imbalances will be corrected quickly.

 

[ironchef]

Sorry, you lazy millennial f-ups. I ain't sellin'!

No problem, can't afford to buy prime lake front property! I will rent it from you instead.

 

[Handle123]

Oh come on, if you are a trader, these are fun places to live.

https://www.bankrate.com/finance/real-estate/4-strange-unusual-homes-for-sale.aspx

 

[nooby_mcnoob]

what happens to valuations when 20MM homes are for sale with no natural buyers?

It doesn't matter unless they are forced to mark to market. Since a lot of the boomer houses are paid off, they can hold indefinitely.

 

[gaussian]

Actually at today's price (in SoCal, NYC SF...), ownership doesn't make financial sense, rental return on capital also doesn't make financial sense.

Yes, it seems like financial suicide to live in any of these paragons of modern society.