There seems to be a widespread belief that this so-called housing bubble or boom started only when Greenspan tinkered with interest rates.
Actually, the boom began in the mid 1990s in my area, and since that time, many beancounters who study the housing market have concluded that demographics are one of the biggest factors driving the real estate market.... i.e., large number of new household formations, baby-boom "echo generation" kids now of home-buying age, immigrants buying homes, etc.
I don't see an end to this (have a 25-year-old who will probably be in the housing market along with all his cohorts within the next 5 years).......unless something happens to render all the graduates unemployed who have been pouring out of colleges and universities in recent years.
If recent and upcoming graduates can't find jobs in our economy, then they'll move back in with mom and dad. Which of course, means parents won't sell and head off for cheaper housing outside the cities, further constricting the normal ebb and flow of real estate inventory.
Inventory is constricted enough, already, by zoning rules, anti-growth regulations in densely populated areas, and a plain old shortage of vacant land for new building in some areas.
Schools at every level in urban areas have been getting more and more overcrowded for years now. There's a lotta potential homebuyers in that crowd. Anybody wonder where they're all going to find a place to live near their jobs? |
