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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: gpowell who wrote (49393)	3/3/2006 1:22:44 PM
From: KyrosL	Read Replies (2) \| Respond to of 306849

<an aging boomer population causes a shift in demand AND long rates> How? Why?

To: gpowell who wrote (49393)	3/3/2006 2:40:59 PM
From: mishedlo	Read Replies (1) \| Respond to of 306849

I think what is not understood by many is that an aging boomer population causes a shift in demand AND long rates, such that both tend to reinforce price appreciation. I could not agree more about your premise about a shift in demand I could not disagree more about your conclusion Yes there will be a shift away from consumption to saving. A negative savings rate on top of boomer demographics ensures it. There is also a shift towards falling wages caused by globalization, outsourcing, etc. Who will be able to afford to buy boomers houses and at what prices? Look at the demographics in Japan. We are not as far along as they are but our boomers will be retiring in mass with insufficient savings to boot. I do not know what you mean by "long rates". I say they are headed lower after the FED reins in speculation. Those will not be enough to turn back housing just as it was not enough to matter for 18 years in Japan. It is IMO silly to expect price appreciation all things considered. We had a blowoff top in housing, 3 stand deviations above the norm, and you are expecting more appreciation? I do not think so. Nor do I expect appreciation in equities either. Mish