An interesting article came out warning about where the next housing crisis may come from. The Atlantic Cities site, has a post saying that the Baby Boomers are going to have a hard time finding buyers of their homes when they go to sell.
According to data from the American Housing Survey, from 1989 and 2009, 80 percent of new homes built in that era were detached single-family homes. A third of them were larger than 2,500 square feet. And most startling – “I checked my numbers over and over again,” a bemused Nelson says – 40 percent were built on lots of half an acre to 10 acres in size. Now, he says, 74 percent of new housing demand will come from the people who bought these homes, now empty-nesters, wanting to downsize. via the Atlantic Cities
The idea that the larger “McMansion” style homes will be harder to sell makes a great deal of sense. Those in their late 20′s and 30′s have just gone through a rough recession and have seen the damage that a housing recession can cause. Those coming out of college are so buried in student loans that housing purchases are beyond their ability. And the typical empty nest baby boomer just does not want to heat and cool such a large house in the face of high utility costs.
With the large amount of oversized homes built in the last 20 years, we know there is a huge amount of inventory that will be out there. So my question to you is, where is the demand for the larger homes going to come from?