Population Boom a Boon to House Prices?
The combination of rising birth and immigration rates will boost New York City’s population by roughly a million people over the next two decades, according to the NY Times. Even if the building boom continues (and it’s bound to at least have some hiccups), the demographics will have to provide upside pressure for prices as…
The combination of rising birth and immigration rates will boost New York City’s population by roughly a million people over the next two decades, according to the NY Times. Even if the building boom continues (and it’s bound to at least have some hiccups), the demographics will have to provide upside pressure for prices as we see it. Obviously, a host of macroeconomic factors, like low savings rates and rising interest rates, and the potential for exogenous shocks (like terrorist attacks) could all do their part to hurt homeowners, but all else being equal you gotta figure that a 12 percent rise in the number of people needing housing will, all else being equal, translate into higher prices over this period.
A Million More People by 2025 [NY Times]
Will, I want you madly!!!!!!!!
This article ignores the deficit & coming collapse of the dollar, global warming, the rise of China, Iran’s nuclear weapons, the “End Of Oil” as well as the collapse of agriculture, aquaculture and algae farms, which will force us all to live crammed in hot, dusty tenements while a small over-class controls us. All we’ll have to eat is Soylent Green, and it’s MADE FROM PEOPLE! SOYLENT GREEN IS PEOPLE !!!!
It is this kind of thinking that is leading otherwise intelligent people to buy real estate they can’t afford.
Maybe the rich boomers are moving in, but as Anonymous at 11:13 pointed out, many people cannot afford the city even when young – why would they be able to do so when they retire? Not everyone is an investment banker and most people don’t manage money as well as Anonymous at 11:31.
Yes, I apologize for overdoing it. I meant those people with children who are not willing to live in a small apartment and who want a house. The people I’m refering to all had kids and “needed” more space. The only options they had given their budgets were moving to areas of Brooklyn they weren’t comfortable or going to the ‘burbs.
“If you earn less than 200,000 a year (as they all do), there is nowhere to live.”
My wife and I earn far less than that and we found a nice apartment. Sometimes it’s not how much you earn, but how well you manage what you have.
Half of my friends and coworkers have left the city for the burbs in the last 3 years due to rising real estate prices. The reason the city is getting wealthier is that middle income folks can’t stay here. The editors, architects, and film/video people I know have either fled or are considering it. If you earn less than 200,000 a year (as they all do), there is nowhere to live. If I hadn’t bought in the Slope eons ago, I’d be out of here in a flash.
I note that this population “boom” amounts to 0.69% per year. This rate reverses the population declines of the 1970s, but hardly represents a juggernaut. Furthermore, NYC is growing significantly slower than the US as a whole which is growing at 0.92% per year. Finally, NYC housing growth is comparable to population growth rates.
I wouldn’t rely on population growth to generate excess returns for housing.
What makes you think the boomers will all leave? Many of them are moving in from the burbs.