A highly recommended read on the differences between baby boomers', Gen-X and Gen-Y's views on home buying... and why it's hurting a lot of boomers financially.
There is a lot of good analysis here. Points that I found especially relevant:
- People's real estate needs change as they get older. Folks who have stayed in or around Boston all their lives now want to move to warmer climes for retirement. But who's going to buy their million dollar palaces in the 'burbs?
- Predicting the future based on any single generation's characteristics is really hard. The author cites some famous economists whose predictions were 180 degrees off target - because they failed to account for immigrants or the boomers' continued prosperity.
- The boomers' classic mistake of tying up all their net worth in their houses; thinking that they'll always be able to sell it for more than they paid.
- The positive effect that upwardly mobile, highly educated immigrants bring to the community. In all the discussions of the financial crisis and its solutions, I've yet to come across a journalistic piece that is so articulate on exactly why America needs to open its doors to more immigrants.
- The conflict between short-term and long-term interests. Wealthy homeowners don't want lower-income people entering their communities and accessing the good schools their taxes paid for... but 20 years down the line, those well-educated kids will be same wealthy adults that today's homeowners will be selling to. It's an interesting give and take.