BluefoxToday blog : Housing demand poised to return on account of echo boomers

Housing demand poised to return on account of echo boomers

Even though it looks like the slumping real estate market is showing some signs of improvement, like here in Las Vegas bank REOs in the lower half of the marketplace are selling briskly, there remain steep hurdles to overcome before it can be declared healthy again. Mortgage funding is hard to come by, many homeowners are upside down and unemployment is high, just to mention some of the obvious problems.

But if the focus is shifted over into the near future, then there is some reason to be optimistic about what's to come. Here is why. Harvard University's Joint Center for Housing Studies declares in its annual State of the Nation's Housing report that once the recession begins to fade, the real estate market will recover nicely due to favorable demographic developments.

According to the report so called echo boomers, the roughly 75 million citizens born between 1979 and 1995, will form the backbone for it. In the next 10 years they will spawn from 12.5 million to 14.8 million new households and that naturally means increased demand for housing. Everyone can easily put their arms around this theory.

What type of housing will they be looking for is another question? The present slump and the serious value erosion it brought along with it in many areas, most notably Las Vegas and much of Arizona, California, Florida, must cause many would be home buyers to pause. If it happened now, it can recur. They are feeling the pain as their parents are faced with the effects of negative equity.

What about the availability of mortgage money? It'll predictably take lenders a few years to work their balance sheets back to sustainable health. And then what? Underwriting standards are going to be stricter from here on out and only time will tell what they will be in two or three years. That factor, too, will definitely have an effect on how much demand the echo boomers will actually generate.

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Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst 

www.BluefoxToday.com - syndicated mortgage, housing and property management blog

eskokiuru@gmail.com
My cell: 702-499-1006

Comment balloon 8 commentsEsko Kiuru • June 23 2009 11:51PM

Comments

I'm seeing a strong surge of conservatism among the echo boomers. Couples with 2 good jobs want to purchase homes that one income can qualify for (still not an easy thing to do in our area)

Posted by Vickie Nagy, Vickie Jean the Palm Springs Condo Queen (Coldwell Banker Residential Real Estate) over 9 years ago

Esko:  That "echo boomers" is a cool term, and is new to me.  Actually, I heard it the first time today on the radio when a commentator was talking about sales possibly getting better.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) over 9 years ago

Esko,

thanks for the information about echo boomers. I do believe standards will continut to tighten unless government steps in and makes them loosen again. I hope not:)

Posted by Mike Frazier, Northwest Tennessee Realtor (Carousel Realty of Dyer County) over 9 years ago

Esko, first we had "baby boomers" and I guess now we have "echo boomers".  It does not matter to me how they lable the Buyers, if they are buying I am OK with what ever name they give to them :) :)

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 9 years ago

Vickie,

Let's hope echo boomers will strengthen the market as predicted.

Posted by Esko Kiuru over 9 years ago

Karen,

It's new to me, too. Trying to stay current on things.

Posted by Esko Kiuru over 9 years ago

Mike,

Mortgage guidelines will stay rather tight for while yet, I believe.

Posted by Esko Kiuru over 9 years ago

George,

I wonder how they, who knows who they are, came up with this echo boomer label.

Posted by Esko Kiuru over 9 years ago

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