A recent article by RealtyBizNews presents the idea that a buyer’s market may be right around the corner. The article suggests this could be fueled by Baby Boomer’s selling combined with the younger generation’s insufficient purchasing power, leaving a gap in the market. Baby boomers currently own about two out of five residential properties in the US, with other generations only attributing about 14 million homes. Fannie Mae researchers suggest as many as 11.9 million of these older owners will leave their homes during the period of 2016-2018, with another 14 million or so between 2026 and 2036.
Without the younger generation’s financial strength or simple desire to purchase these homes, a significant gap could emerge. However, the article acknowledges that it is frankly impossible to predict what will happen this far into the future and also notes that growth and impact of foreign buyers may offset some of these issues.
What does this mean for you? Very little. The best time to purchase a home is when you AND your financial situation are ready. While now may be a great time to sell due to high prices and a great time to buy due to low interest rates, pushing either could lead to financial hardship. Predicting the real estate market is comparable to trying to determine the weather six months from now: we believe it will likely be cooler or warmer, but we also know that the temperature can vary significantly over any short period. In addition, we know that numerous factors, such as interest rates, local and global economies, social issues and even technology can affect the market conditions.
While the seller’s market has been exciting in recent years, perhaps a buyer’s market could be just as exciting. I will not try to predict what is coming tomorrow, but I will be ready to adapt to what opportunities for buyers and sellers the coming market may provide.