3 minute readMore resales on the market, many homebuilders believe, would be a positive in the Economics 101
Builders, then, are beginning to get what they wished for – more listed, for-sale existing home properties.
What’s got most economists’, analysts’, and housing observers’ interest is the downshift from a torrid market dynamic to an above-average hot market.
We’re interested in that, and it merits attention, but our real focus from a macro, 40-thousand foot view, is more in “the who” and less in the “how much.” It’s who’s moving now, who’s behind that swelling resale inventory and why that matters, because that’s where both opportunity and challenge lie for residential property investment, design, planning, construction, engineering, and development.
So, first, a few highlights of what looks to be a hybrid correction-inflection:
- New York Times real estate trendwatcher Candace Jackson clocks in with “Overheated Real Estate Market Begins to Cool.” Falling knife time? Not so much. The operative term Jackson attaches to here is “balance.”
- Here, Redfin culls research from its national network of brokers, transactions, and listings, with the headline, “Housing Market Update: 5% of Home Sellers Dropped Their Price in Recent Weeks.” Red flag warning? No way. Conclusion is, sellers are still in the driver’s seat.
- For your top-10-rankings fix on the matter, here’s a titillating “Boon for Buyers: 10 Cities Where Sellers Are Slashing Prices,” an Elena Cox roll-up of Realtor.com data. Blood in the streets? Not exactly when 255 out of 300 markets show few signs of price capitulation.
- And, here, Fannie Mae’s Economic and Strategic Research (ESR) Group cites still-constrained listed for-sale inventory as weighing on its housing activity forecast.
Two uber forces at work here in the dynamics of what’s pushing and pulling housing like a camel through the eye of a needle of a volatile economy will sound like deja vu all over again. One, the pandemic, which, it turns out, has legs. The other is the landscape shaping impact of a generational cohort on the move.
Millennials represent the “incoming” delta-force factor in homeownership demand as homebuying’s fastest-growing segment. Likewise, it may soon become evident that resale inventory increases will correlate to a disproportionate degree with Baby Boom-era sellers.
Here’s an underappreciated macro driver that folks like us will be recognizing with the benefit of 2020 hindsight during the 2030s.
Just as biological clocks, dirt-cheap interest rates, and heightened level “homing” instincts toward the full-monte of single-family living have together turbocharged Millennials lean-in on single-family, a Baby Boom inflection is taking shape.
- They will redefine a new 55-plus to 75-plus living, places, connections, priorities, resource-allocation, policy template.
- Their version of sheltered-in-place to the-right-place strategy will mimic Millennials “family formation” drivers, evolving an “extended family formation” household and community model.
- Existing homes – the repository of accumulated equity and wealth – are this age cohort’s ticket to that “extended family formation” move. Further, the moment, in a recovering economy, with new adult generations clamoring for homes, and fewer “anchoring” impediments to both selling and buying, is now.
A couple of month-on-month comparisons showing a growing rate of existing home listed-for-sale inventory does not a macro-trend make.
We’d be willing to go on the record, however, with a suggestion that a Baby Boom tipping point from long-time family homes into the “extended family” household and community will be one of the key forces of the 2020s.
Who’s ready for extended family formation, and the 55-to-75 economic makeover that lies ahead?
