US Homes Listed for Sale due to Old-Age Deaths

[GON]

A subject briefly discussed on BITOG, earlier today I came across a chart that depicts this category of home sales. Interesting to note that although there will be an increase in home sales due to old age, these homes will equate to less than one percent of all homes being on the market for sale.

" Societal shifts: Listings from aging baby boomers are not a ‘silver tsunami.’

Aging baby boomers are adding few homes to the resale supply—not an overblown “silver tsunami.” The number of homes listed for sale due to aging baby boomers is increasing, but gradually.

Baby boomer deaths will lead to 772K homes listed for sale annually by 2033—a big number, but less than 1% of all owner-occupied homes. Not all these homes will be for sale, as many will transition to single-family rental units."

 

[dishdude]

Sounds about right, just have to hope investors don't buy them all up.

 

[daves87rs]

Sounds about right, just have to hope investors don't buy them all up.

Expect most to. Hoping people avoid those reverse mortgages………

 

[CKN]

Expect most to. Hoping people avoid those reverse mortgages………

Nothing wrong with reverse mortgages. Bank loans you 100,000 dollars. ( House currently worth 300,000- paid off) House appreciates to 400,000- heirs sell house- pays off balance and keeps equity. Please tell me where the issue is?
Don't misunderstood me, I don't have one- but there is so misinformation floating around on these things.

 

[PandaBear]

Reverse mortgage at the right rate is not a bad thing. If you get a subprime rate it is a horrible deal whether it is a reverse mortgage or a regular mortgage.

The biggest problem is usually SOME people of all age are horrible in financial planning, and they don't really see the consequences of their own actions until they are dead broke.

BTW, buying a home at market rate today to rent them out at market rate is a very low return business. Currently the landlords are subsidizing the tenants. The main reason large investors do this is because almost all investments are overpriced right now and they have to diversify. If they put 20T into one asset (say S&P500) it would blow the price out of water and overpay. There's only so much you can buy with all the QE going on since 2008.

 

[demarpaint]

Reverse mortgage at the right rate is not a bad thing. If you get a subprime rate it is a horrible deal whether it is a reverse mortgage or a regular mortgage.

The biggest problem is usually SOME people of all age are horrible in financial planning, and they don't really see the consequences of their own actions until they are dead broke.

BTW, buying a home at market rate today to rent them out at market rate is a very low return business. Currently the landlords are subsidizing the tenants. The main reason large investors do this is because almost all investments are overpriced right now and they have to diversify. If they put 20T into one asset (say S&P500) it would blow the price out of water and overpay. There's only so much you can buy with all the QE going on since 2008.

I agree with you, here is something often overlooked. Right now [IMO] the real estate market is overpriced, not that I'm complaining. Reverse mortgages can be tricky. Years ago my FIL took one, he maxed out the amount he could borrow at the time. Long story short at the time he took it the housing market was high. The market turned south and when he passed he owed more than the house was worth, some might say that is impossible, it can happen. After some quick math we let the house go into foreclosure, it was his loan and we had no responsibility what so ever for it. His siblings got nothing from the sale of the house, and the bank took a small hit when it finally did sell.

 

[BMWTurboDzl]

I agree with you, here is something often overlooked. Right now [IMO] the real estate market is overpriced, not that I'm complaining. Reverse mortgages can be tricky. Years ago my FIL took one, he maxed out the amount he could borrow at the time. Long story short at the time he took it the housing market was high. The market turned south and when he passed he owed more than the house was worth, some might say that is impossible, it can happen. After some quick math we let the house go into foreclosure, it was his loan and we had no responsibility what so ever for it. His siblings got nothing from the sale of the house, and the bank took a small hit when it finally did sell.

Sounds like your FIL did it right.

 

[BMWTurboDzl]

Sounds about right, just have to hope investors don't buy them all up.

I occasionally see these and it's about 50/50 as to whether the property sold to an individual as a principal residence or as an investment. These homes are generally older with a comparatively higher level of deferred maintenance.

 

[demarpaint]

Sounds like your FIL did it right.

That's a good way to look at it. At the time he didn't want my mother in law taken out of the nursing home she was in and go into a Medicaid facility. He felt that was the only choice he had, and he was not taking any advise from anyone.

 

[BMWTurboDzl]

That's a good way to look at it. At the time he didn't want my mother in law taken out of the nursing home she was in and go into a Medicaid facility. He felt that was the only choice he had, and he was not taking any advise from anyone.

I wish my mother had done a reverse mortgage. She instead downsized and has been using the excess proceeds as a slush fund to "upgrade" her now less expensive house.

 

[Astro14]

Nothing wrong with reverse mortgages. Bank loans you 100,000 dollars. ( House currently worth 300,000- paid off) House appreciates to 400,000- heirs sell house- pays off balance and keeps equity. Please tell me where the issue is?
Don't misunderstood me, I don't have one- but there is so misinformation floating around on these things.

In principle - they’re fine, but there are so many unscrupulous companies in that space, and so many foolish homeowners, that bad deals abound and many people are ripped off.

 

[AZjeff]

Sounds like your FIL did it right.

Stuck it to the man? Agree he didn't owe his siblings a dime but always nice to leave something for the kids. An old guy at church did the same, he passed, his wife lived in the house and when she passed the value had come up to break even.

 

[demarpaint]

Stuck it to the man? Agree he didn't owe his siblings a dime but always nice to leave something for the kids. An old guy at church did the same, he passed, his wife lived in the house and when she passed the value had come up to break even.

That wasn't his intent, but trust me the way those reverse mortgages are structured the little man is the one who often gets stuck. Fortunately that wasn't his case. My FIL was a WW-II Vet stuck in his ways. All he wanted the best for his wife, and at the time that was not a Medicaid facility.

 

[BMWTurboDzl]

Stuck it to the man? Agree he didn't owe his siblings a dime but always nice to leave something for the kids. An old guy at church did the same, he passed, his wife lived in the house and when she passed the value had come up to break even.

More like he broke even said for bad timing of the RE market which isn't something he could've controlled. The flip side is that his kids could've been pitching in to help keep mom at the facility with the hope that they get some of that money back when the house sells in whatever state it was in. Avoids any animosity between siblings and adult children

My stepfather was in a facility for 3-4 years at $60k/yr and there are many which cost 2x-3x that.

 

[SC Maintenance]

Meredith Whitney has a thesis on baby boomers - not just from deaths, but also from downsizing or going to a care facility, or moving to a more retirement friendly location, will cause a housing glut in some locations.

The generations after the Boomers is significantly smaller and in general less well off, and less likely to have a family hence these big mcmansions in the burbs may not be desirable.

The other piece of this is in the past a retiree in New Jersey or Michigan used to be able to sell their house there and buy something comparable in Florida or Phoenix, and that is no longer the case, or not as much as in the past, so selling and moving is no longer an automatic possibility. That might affect the buying end also.

All real estate is local. Changing demographics like this is something no one has a model for - its the first time the next generation is smaller, not larger.

 

[Triple_Se7en]

A subject briefly discussed on BITOG, earlier today I came across a chart that depicts this category of home sales. Interesting to note that although there will be an increase in home sales due to old age, these homes will equate to less than one percent of all homes being on the market for sale.

" Societal shifts: Listings from aging baby boomers are not a ‘silver tsunami.’

Aging baby boomers are adding few homes to the resale supply—not an overblown “silver tsunami.” The number of homes listed for sale due to aging baby boomers is increasing, but gradually.

Baby boomer deaths will lead to 772K homes listed for sale annually by 2033—a big number, but less than 1% of all owner-occupied homes. Not all these homes will be for sale, as many will transition to single-family rental units."

View attachment 226649

We may not be selling / buying any homes by 2033. Global forecast is that we will not own both the home and the land everywhere on earth. The upcoming Great Reset will enter-in a new financial age. All transactions will be recorded and digitalized and need approvals.

All part of the moneyless society already in non-reversible progress. Not good news for the Cartels.

 

[BMWTurboDzl]

Meredith Whitney has a thesis on baby boomers - not just from deaths, but also from downsizing or going to a care facility, or moving to a more retirement friendly location, will cause a housing glut in some locations.

The generations after the Boomers is significantly smaller and in general less well off, and less likely to have a family hence these big mcmansions in the burbs may not be desirable.

The other piece of this is in the past a retiree in New Jersey or Michigan used to be able to sell their house there and buy something comparable in Florida or Phoenix, and that is no longer the case, or not as much as in the past, so selling and moving is no longer an automatic possibility. That might affect the buying end also.

All real estate is local. Changing demographics like this is something no one has a model for - its the first time the next generation is smaller, not larger.

The other issue is capital gains. Some states have a cap on equity (primary residence) which isn't subjected to capital gains and the older boomers who live in expensive states (ex, California) are finding out that they will have to pay cap gains on some portion of their sale proceeds. The tax acts as a deterrent from selling.

 

[daves87rs]

Nothing wrong with reverse mortgages. Bank loans you 100,000 dollars. ( House currently worth 300,000- paid off) House appreciates to 400,000- heirs sell house- pays off balance and keeps equity. Please tell me where the issue is?
Don't misunderstood me, I don't have one- but there is so misinformation floating around on these things.

In theory, I would agree.

My concern is with the companies that do these. Many want you the access the full amount, on top of the fees they throw on there. Many prey on boomers needing a few bucks, and in the end- it get sold to investors to make a tidy profit. They prey on fear…..

I watched a long time neighbor down my street fall for this, and her kids lost both the money and the house. While there are honest companies for the reason you used above, more are looking to take advantage….

 

[CKN]

In principle - they’re fine, but there are so many unscrupulous companies in that space, and so many foolish homeowners, that bad deals abound and many people are ripped off.

So basically-it's like anything else.

BTW-many reputable companies have these as well.

 

[CKN]

I agree with you, here is something often overlooked. Right now [IMO] the real estate market is overpriced, not that I'm complaining. Reverse mortgages can be tricky. Years ago my FIL took one, he maxed out the amount he could borrow at the time. Long story short at the time he took it the housing market was high. The market turned south and when he passed he owed more than the house was worth, some might say that is impossible, it can happen. After some quick math we let the house go into foreclosure, it was his loan and we had no responsibility what so ever for it. His siblings got nothing from the sale of the house, and the bank took a small hit when it finally did sell.

A house being worth less than what it was-is either a long time ago or in some less than desirable area. Houses less than a million dollars taking a $100,000.00 dive isn't going to happen. I know many are in the twilight zone on here thinking that-but it won't happen.