Rich Boomers, Broke Millennials, Ambitious Gen Z Fight for Housing

Kathy:
I blame the 2008 housing crash on Gen X. If it had been a larger population, there would’ve been enough people to keep the housing market afloat. But it’s such a tiny generation that there just weren’t enough of you.

Dave:
The cool thing about being a baby boomer is that they have all of the money, despite being just 20% of the population, they have 51% of the wealth. There’s this sort of stereotype that boomers don’t have to care and they’re all really rich, and that stereotype is kind of true, at least when you look at the statistics about it. Hey everyone, it’s Dave. Welcome to On the Market, as we often do on panel shows where I’m joined by James, Henry, and Kathy. As we are today, we’ve each done some homework ahead of time and we’re going to be talking about how each generation is shaping the housing market and the US economic landscape. So I’ve assigned to each of you a generation to take on. Kathy, how’s it going?

Kathy:
Great.

Dave:
Well thanks for being here. You have been assigned Gen Z because you have some Gen Z children, so I figured you’d be the best to represent them.

Kathy:
Well, I have one Gen Z child and one millennial, so I’ve got two kids and different generations. Amazing.

Dave:
Alright, well I don’t feel comfortable representing Gen Z, so I’m glad you’re willing to do it for us. James, you’ve got millennials. You’re a millennial, right?

James:
I’m just barely a millennial. I’m getting old now though.

Dave:
You’re an old millennial.

James:
You at the tail end, I was like, wow, I’m the older millennial. That’s not a good thing.

Dave:
Why? What’s wrong with that? That’s great. You’re experienced, you’re well seasoned.

James:
But I remember when I first got in real estate, I was the youngest person in the room wherever I went. Now I’m the oldest person in the room and I’m like, oh man. And it changed like that all of a sudden

Dave:
You are,

James:
You’re the old person in the room

Dave:
For sure. I know the feeling. You’re like barely 40, which is just not old at all. Henry, you have Gen X. Do you feel capable of representing them?

Henry:
Yeah, I absolutely do. I like should be Gen X, but I missed it by one year. So I’m essentially a millennial as well, but pretty much Gen X. Yeah.

Dave:
All right. And then that leaves me with boomers, which I’m completely unqualified to represent, but I do have a lot to say about it. So I’m pretty excited.

Henry:
Boomers typically have a lot to say about everything, so

Dave:
It’s

Henry:
Pretty on brand

Dave:
Judging by the length of my dad’s stories, they always have something to say and my dad listens to this podcast, so Hi dad.

Kathy:
Well, I’m a fringe boomer, guys, don’t hate me, but I am like three months into Boomer. Are you? But I identify as Gen Z, so if that counts.

Dave:
Okay. Yes, you can do whatever you want. All right. Well I’m excited for the show. I think there’s nothing people love more than making broad generalizations about generations and then hating on generations other than their own. So let’s just jump into this, Kathy, let’s just start with you. Tell us a little bit about Gen Z. Who are they? How old are they? What’s some fun facts about ’em?

Kathy:
Well, they are young. They are ages 12 to 27 years old. My daughter Krista is 25, and I keep telling her that if you looked at generations of 20 years apart, then she would actually be a millennial. She refuses to say she’s a millennial for whatever that’s worth.

Dave:
I think it’s not cool to be a millennial if you’re Gen Z. I disagree. Well, you’re not Gen

Kathy:
Z.

Dave:
You can’t voice that

Kathy:
From a Gen Z perspective. Yeah, she was pretty horrified at that thought. But
What’s interesting is that the oldest Gen Z, the first time they got to vote was the Clinton Trump era 2016. So they’re just all the years that they’ve been voting, they’re back to Trump against another woman. So it’ll be very interesting. Their political stance, the population is about 61 million of them, so that’s 20% of Americans, and this is the first generation that has really grown up with, they call them the digital natives. The millennials kind of got the iPhones and everything a little bit later. They were a little bit older, but Gen Z just grew up with technology. So as a result, they have an eight second attention span. Apparently they are very comfortable getting their news from social media. They don’t see that as a bad thing. A lot of what they learn is from YouTube and TikTok and so forth. That’s where they get their information.

Dave:
Well, that’s good. Kathy, we could talk badly about Gen Z as much as we want four minutes into this podcast. So all of them have stopped listening at this point.

Kathy:
Oh, they’re not even listening anymore. Yeah, they’re done. But a really interesting thing is they can sense fakeness because they grew up with social media basically. So they can tell when reviews aren’t real. They’re just very savvy. So interesting. But as far as housing goes, 97%, at least according to recent surveys, 97% of Gen Z want to buy a home and many want to be able to buy a home by the age of 25.

Dave:
That’s pretty cool. I mean, you hear a lot in the media, people aren’t buying homes because they don’t want to, but I would imagine the desire to buy a home is still there. It’s just the affordability that’s slowing them down in terms of buying property.

Kathy:
Well, what’s slowing them down is they’re 12, they’re in

Dave:
Middle school,

Kathy:
But the oldest, like I said, are 27. And so there’s already a hundred thousand or so Gen Zers who have bought and those who bought in 20 20, 20 21, back then when rates were low, they would’ve been in their early twenties, but they’re in good shape. They didn’t have the affordability issues we have today. But these Gen Zers who aren’t really at first time home buyer age yet anyway, but they’re walking into a market that is very difficult.

Dave:
It’s interesting, I was creating a social content about this today, that they’re also not just unable to afford homes, but Gen Z is generally having a hard time affording rent right now. There’s actually the percentage of people who are between 25 and 35, so I guess this is millennials too, who are living at home with their parents, has hit the highest point since World War ii. So I don’t, generally speaking, I don’t like when we have to compare times to World War ii. It’s not a very good sign, and apparently it’s because people just can’t afford it. It’s not because of choice.

Kathy:
And it’s interesting because they basically are the apartment renters, right? Because these are young people just getting their career started according to some charts. They are also just about to get that bump in income because they’re just getting their jobs going. And some of these kids get out of college. They are actually the very highly educated group and a lot of the education again, comes from social media, but they are coming out of college with debt. Of course we know about an average of $37,000 in student loan debt, but very highly educated. And some of these kids come out and they’re making a hundred thousand dollars salaries, but still entering a housing market, that’s really tough for them because high prices, high interest rates combined.

Dave:
How do you think that will impact the rest of the housing market, Kathy, both in terms of apartment demand, housing demand? Do you think we’re going to see sort of a lag in those areas because this generation struggles to afford the pricing that we’re all expecting?

Kathy:
No, I think that there, it’s going to be great demand for apartments. So you’ve got a pretty big generation. They apparently want apartments with amenities. They want fast internet coworking spaces. They want a gym. So you’ve got to have the amenities in your apartments to attract this generation.

James:
They want it all.

Kathy:
They want it all.

James:
When I was looking at the Gen Z, they carry a lot of debt.

Dave:
Is that student loan debt though, or is it consumer debt?

James:
Student loan, but even credit card debt, they’re nearly average of 20,000 and their savings account is very similar on that. And then they make a little bit less than some of their average income is at 40,000 annually, which yeah, because

Henry:
Only half of them are working and they’re just getting started.

Dave:
Well, if I had a $40,000 income when I was 12, I would’ve been having the time of my life, I would’ve been falling on a

James:
Playground. Are you kidding me? Shoot. Yeah, but somehow they get credit cards too though, so 80% of ’em have credit cards. That’s pretty easy to do. Now I feel like Gen Zers are the millennials that are a little bit softer because they didn’t have to go through the recession and that’s why they’re living at home and they have a little bit more credit card debt and they just want a comfortable life.

Kathy:
I mean, that’s true, James mean they really, as far as the part of their lives where they’ve been conscious, I feel like when you’re under 10, you don’t really know what’s up, but have really seen a robust economy.

Henry:
They don’t have PTSD like the rest of us.

Kathy:
And that as a mother, that is concerning because in their minds, you just can’t lose. If you invest in this stock market, you just can’t lose. If you buy a house, you just got to figure out how to get in one because they’ve only seen it really go up unless some of the older ones might’ve seen family members lose their homes during the great recession. But in general, they haven’t experienced that

Dave:
Or a bad labor market. I mean briefly in certain sectors of the economy during Covid, but for the most of the last 12 years, the labor market’s been incredibly strong

James:
And they’re in tech, so they get hired up. They’re interested in a very growing field. And so I mean they have better potential making money. It’s a matter of whether they want to go get it or not.

Kathy:
So I think focusing on the housing market, this is going to be a generation that will, again, 97% say they want to own a home. That’s because they’ve only seen prices go up. Why would you not? And if you are a real estate agent and you’re wanting to market to this group, you would want to do it on social media and you need to have everything digital and fast and quick. And if your website is slow to load, forget about it. Again, this group also is kind of good with their hands, so they might want to be flippers. They might want to be able to buy an older house and fix it up because they can learn so much online.

Dave:
That’s a good point.

Kathy:
But this wave is just beginning, so there’s a big population that we’ll be looking for a place to live.

Dave:
Alright, so Gen Z is going to be shaping the housing market for decades to come, but how are millennials and Gen X impacting the housing market right now? We’ll hear from James and Henry on the other side of the break. Hey everyone, welcome back to On the Market, James. Let’s talk about millennials. Tell us about this group that three of us belong to. Tell me about myself.

James:
Millennials get a lot of flack and I don’t agree with it because I think unlike Jen Z, we have a little bit more backbone. We went through the 2008 housing crisis and I think that changed a lot of different things. But the millennial groups, they’re typically 28 to 43, born between 1981 and 1996, and they make up 72 million people in the us, which is 22% of the population,

Dave:
Biggest generation. Now

James:
I feel like there’s a gap between the millennials though. There’s the late stage millennials or the older ones that are in their late thirties, early forties, and they have a little bit of different perspective than the earlier millennials that are 25 to 35.

Dave:
Yeah. Do you remember dial up internet or do you remember a time before the internet? I do,

Henry:
Yes. Now you’re creeping in on the Gen Xers,

James:
But you look at it’s difference, and I know I talk a lot about this, but savings, right? Because I feel like I’m a later stage millennial where I got my career going. We were raised during that time to go to college, get your career, get working right after college. And that’s what I did. I did that in real estate and then the market fell down on me in 2008. So I feel like they went through a little bit of something harder. Either you are a young professional, they got rocked by the housing crisis or you were coming through junior high high school and people’s parents ran into some really hard times. 3.8 million homes were foreclosed from 2008 to 2010, and those things leave a mark. I think it has molded the millennials quite a bit because the 35 to 44 year olds, they average savings account is $28,000.
The 25 to 34 year olds, their average savings is $9,600. And I think it comes from when you go through harder times like 2008, we had to work really hard to get out of that hole and you get whiplash out of that. I still have whiplash from 2008. I still leverage things. People think it’s a little weird. I under leverage certain things. You see it in the millennials, but you also see it in the work ethic and the growth because I think the kind of 35 to 44 year olds that I know, they either do kind of two paths. Either they’re kind of a failure to launch and they’re stuck making 60, 70 grand a year or they really excelled and they excelled from the hard times. And so that’s why I love the millennials. I think they get a bad rep, they work hard, they build, they are investors. 51% of ’em own real estate and they believe in real estate.

Dave:
I’m kind of surprised to hear that you’ve probably heard this, but at least earlier five, 10 years ago, there was all this thing about how millennials weren’t buying homes and they didn’t want to buy homes, but that just seems like nonsense. I think a lot of millennials couldn’t afford to buy homes because many of us became adults right around the great recession and it was super difficult to qualify for loans at that time, especially if you were right out of college. But it sounds like according to the stat you just threw out, James, that millennials have caught up in terms of home ownership at least.

James:
Yeah, according to this, it said 2024, the home ownership rate went to 54.8% from 52 in 2023. And I think that has to do with is they’ve gone through hard times, they want to invest, they learned that they have to be responsible and also they’re part of the tech boom. And so they kind of came up in the era where tech really started exploding. So they have higher incomes like in the Pacific Northwest, a millennial averages 70 to $90,000. Average

Dave:
Income

James:
Nationwide is around 50,000 and so it’s higher than some of the other generations. And so they have a little bit more income, they’re a little bit more savvy of the tech. And then they grew up in a social media era of explosion of how to buy real estate, how to invest during the pandemic, and they just put that money to work and they started buying.

Dave:
And it just seems like millennial just demographics and behavior is driving so much of the housing market over the last few years. We all know that low interest rates were one of the main drivers of the rapid acceleration prices we saw over the last few years, but I know it’s boring, but a lot of it just has to do with demographics. We have the largest generation in the US are now just in their early thirties, which is peak home buying age. People are starting families, they want to buy homes, and so there is all sorts of demand for housing, even pent up demand for people who can’t afford to buy right now. There’s all this data that hundreds of thousands, if not millions of millennials still plan to buy a home as soon as they’re able to afford one. If that were to happen, which to me at least provides a lot of price support for the housing market. It’s like one of the reasons why even though mortgage rates have gone up so much, we haven’t seen prices decline is because as soon as things get a little bit more affordable, there’s just basically a backlog of millennials waiting to buy all these homes.

James:
I think they could affect the inventory though too because they kind of live a little bit paycheck to paycheck. They do carry more debt than other generations. They have $33,000 in student loans. Their average credit card debt’s 27,000 to 40,000, so it’s a little bit higher. I think they kind of came from the era of printing money when banks are getting bailed out, they’re used to using debt to buy other things. But one thing about millennials, they love to travel. That is one of their top of their list, and I think they own home ownership because they want financial freedom and they know you’ve seen this boom of millennials buying short-term rentals, traveling the world and just living off their real estate income.

Kathy:
Doesn’t everyone like to travel though? Yes,

James:
I

Dave:
Think so. But

James:
There’s a difference between traveling and traveling to where you’re not increasing your savings. I travel when we save up a certain amount of money and then we go do a vacation. They’re just living and they’re using it and that’s why their savings accounts are a little bit lower and their debt’s a little bit higher.

Dave:
I feel personally attacked.

James:
But this could cause that lock in effect. If they’re not making much more money and they’re not saving more money, they can’t trade, right? They’re locked in on that mortgage and they can’t afford to trade up at that point. And so I think that the millennials will cause a little bit more lock and effect as well.

Dave:
All right. Well, thank you for representing our generation. James. Let’s move on now to Jen x Henry, did you say you’re borderline or are you officially Gen X?

Henry:
Yeah, so the Gen X age range is between 1965 and 1980. So they’re between 44 and 59 years old. And I was born in 81, so I’m 43, so I’m just on the cusp, but I totally identify with the Gen Xers in terms of everything that they’ve had to deal with. This is affectionately known as the latchkey generation because

Speaker 5:
This

Henry:
Generation typically had two working parents. And so typically working parents work till five, 6:00 PM and you get out of school as a child of them around two to 3:00 PM And so there was this timeframe between two and five or six when we used to just be at home. Dude, that was the best part of growing up. It was the best. You would just be at home unsupervised. The only rule we had was just you had a list of chores to do and then don’t answer the door for anyone at all. Other than that, you just ran amuck in the house and it was an incredible time. But yeah, this was the latchkey generation, so two parent households that were working. We grew up on MTV grunge music, but the turning point here is we saw the rise of technology. So people in this era, remember a time before personal computers, before cell phones, right? I remember having a pager, that’s how someone, if they wanted to call you, they would beep you and then you had to call them

Dave:
Back. You’d have to go find a payphone, find

Henry:
A phone, and then put money in it and then call them. I would go play basketball at a park. My dad would just drop me off. And then when I was ready to be picked up some 2, 3, 4 hours later, I would go to a payphone. I would call him collect. And instead of paying for the collect call when it asks who is the call from, I would just say, pick me up. And then I would hang up and he would decline the charges. That’s how I would use a pay. I love that.

Kathy:
I blame the 2008 housing crash on this generation on Gen X because if it had been a larger population, there would’ve been enough people to keep the housing market afloat. But it’s such a tiny generation that there just weren’t enough of you. There’s

Henry:
65 million Gen Xers in the us, so it’s about 25%.

Dave:
Wait, so are you just saying we should just have had more of a Ponzi scheme where we just kept pushing more people in to keep housing prices artificially?

Kathy:
I mean that’s basically what’s saving the housing market right now is the millennials. There’s just so many of you that we just can’t have a collapse right now. That is

Henry:
True. But this generation, because they saw the rise of technology tends to be tech savvy, they tend to be technically diverse in their nature and they’re hardened. They’ve got some PTSD because they were old enough to be financially impacted by both the.com boom in the two thousands and the 2008 great recession. So they were of financial maturity age when those things were happening. So there are Gen Xers who were heavily financially impacted by both if they were investing in the stock market there, which makes them very much concerned right now about ensuring that they have diversity in investments, ensuring that they have savings, ensuring that their children are financially prepared for the future. And so unlike the younger generations who are spending a lot of money on leisure and travel, this generation tends to be more concerned on spending their discretionary income on investing and ensuring that their is taken care of.

Dave:
And how are they tracking on that? Because the older Gen X are starting to approach retirement age, to me it feels like Gen X has sort of had a mixed bag, right? Because if your older one and you grew up in the nineties, you grew up in a very strong economy, then it crash in 2001, crash again in 2008, but then you’ve had a lot of good times in this latter half of your professional life probably. So how do they compare in terms of preparedness?

Henry:
Yeah, so the average household income for a Gen X here is around 90,000 annually. And the median retirement savings for Gen X is around $64,000, but about 37% of them have no retirement savings. And so,

Dave:
Oh my

Henry:
God, it’s about right in the middle. But the benefit to the Gen Xers is that you are right. They saw some upside after those crashes, and they’ve had the best economies to purchase homes in terms of interest rates. So a lot of them have been able to buy homes on low interest rates and then have afforded the upside of the market to be able to grow equity and appreciation in their homes.

Dave:
Yeah, that is good. I mean, I feel like it’s one of these things where if you were doing decently, you’re probably doing great now, but if you fell behind a little bit and weren’t able to capitalize on that, you’re probably not in a great shape.

Henry:
And to add to the answer to your question, the average debt for Gen Xers is around 140,000, but that includes mortgages and student loans. So it’s not so bad when you think about it from that perspective.

Kathy:
Yeah, mortgages don’t count. It

Henry:
Includes mortgages, student loans, a lot of it. And then the other parts are credit card debt, obviously.

Dave:
When you were researching this, Henry, did you see any information about how X plans to operate in the housing market, get to the boomers in a minute, but millennials are still just trying to raise their family. Do you get the sense that they’re trying to move up, they’re trying to downsize what’s driving their decision making in the housing market?

Henry:
Stability and comfortability in retirement is driving it. So this is also a generation who’s not afraid of the hustle culture. So a lot of them are either trying to get stable and so they’re trying to build up savings to get stable or they’re stable and they’re trying to make sure that their next generation coming up is stable. Approximately 71% of Gen Xers own real estate. So you mean that’s a lot. A lot. So they have investments and that’s a high homeownership rate.

Dave:
Yeah, because the national average is 66, so that’s pretty size. And

Kathy:
That’s huge because they got hit the hardest after the great recession. They were at first time home buyer age, and man, boom, they just lost the home they had bought. So it’s pretty cool to see them recover.

Dave:
That is good

James:
To hear. Yeah. Well, they also got the benefit though of the upswing when they were doing that first time home buyer credit in 2008, nine, where you get your closing costs reimbursed. They got a lot of that benefit and they bought housing at a very low price. And so they’re in a good position, they make the highest amount of income and they bought during the right times,

Henry:
They make the highest amount of income right now. And their parents were the generation that found a job and worked that job until they retired, and they don’t want to do that. So they take advantage of the career and job hopping to get higher income. So they have been increasing their income because they’re working a job until they feel like they’ve maxed out, and then they job hop to get that big bump in salary. And so they’re able to earn more. And a lot of them are in higher management positions. Now,

Kathy:
I would just like to speak to the Gen Zers for a moment. Those of you who think that Gen Xers are not cool and you don’t like them because maybe they’re your parents, back in the day, gen X was very cool. Gen X is responsible for skaters for the X Games. This was the cool generation back in the day.

Dave:
Well, it’s so funny because Gen Z style and fashion is mimicking Gen X. It’s all eighties, it’s very Gen X style right now. All the neon, the baggy pants, the tucked in shirts, they’re copying you. Kathy,

Henry:
When I was researching Gen Xers to figure out what do they spend their discretionary income on, you can tell that this is a generation that is very focused on ensuring that they’re comfortable. So the main things they spend their discretionary income on are investments in retirement planning, then health and wellness because they want to be able to live longer now and take advantage of the advances in healthcare. And then third is family support, so making sure that their family is taken care of. And then fourth is travel. So top three things they’re concerned about are being comfortable, being healthy, their family’s taken care of, and then they travel.

Kathy:
That’s nice. And again, that’s not how they used to be because these are the people that kind of ruined skiing. They brought snowboarding,

Dave:
They brought snowboards out. Alright, well thank you Henry, that was great research. Appreciate you telling us about what is known as the forgotten generation. In fact, our producer Jennifer, when we were coming up with the idea for this show was like, alright, we’ll do baby boomers, gen Z and millennials. I was like, you forgot what? So thank you for representing them. All right, time for one last quick break, but when we come back, the generation that none of the rest of us can afford to forget about baby boomers. So stick with us. Welcome back investors. Let’s jump back in. Now it’s my turn to talk about the baby boomers.

Henry:
This’ll take a while.

Dave:
Yes. So this is a group that they are now between 60 and 78 years old, born between 1946 and 1964. And this was just basically an enormous amount of people born after World War ii. All the GIS came home, the American economy was just absolutely humming and people wanted to have a lot of babies and they did. The cool thing about being a baby boomer is that they have all of the money, basically. They have all of the money in the United States despite being just 20% of the population. They have 51% of the wealth in the United States, and they’re credited and often cited as having one of the luckiest runs in terms of when you were born and when positive things happen for the economy and sort of dodging bullets in terms of negative things happening in the economy. And so there’s this sort of stereotype that boomers don’t have to care and they’re all really rich. And that stereotype is kind of true, at least when you look at the statistics about it.

Kathy:
I have to jump in, Dave,

Dave:
Please.

Kathy:
I have to jump in. I’ve just got a toe in the baby boomer world.

Dave:
Okay,

Kathy:
Tell me all of my siblings, because I’m the youngest of five, they’re all boomers. When I was a news reporter and also when I started the Real Wealth Show, our stories back in 2005 were very concerning for the baby boomer group because they were in no way close to being able to retire. And all the stories that we were doing back then were like, how are we going to take care of this massive generation, the biggest generation yet when they don’t have a retirement plan in place? So it hasn’t really been that easy historically speaking, it’s really the past since 2012 that they have made up for their losses and where they become wealthy and maybe they were just at a place in life where they had higher salaries and could take advantage of the past 10 years of growth.

Speaker 5:
That’s because in 2020, the house they bought for $2,000 in four nickels went up to worth 1.5 million.

Kathy:
Well, but many lost their homes during the, I mean mostly that was the Gen Xers, but the younger boomers lost their homes too in 2008. So yes, of course they are the wealthiest, but it’s better than the stories that we were doing back then. Again, this is just 2000 5, 6, 7. The biggest concern in the headlines at the time were, oh my gosh, baby boomers are not prepared for retirement and we’re going to have to figure out how to take care of them.

Dave:
That feels like it’s just an American problem. People are not, oh wait, every generation is not prepared for retirement, unfortunately. That’s just like a big issue.

Kathy:
That’s true. Yeah.

Dave:
But I think the interesting thing about baby boomers and what’s going on in the housing market and the economy is the, so-called Silver Tsunami. Have you heard of this
Idea that as baby boomers aged, that it was going to wreak all sorts of havoc in the economy, but particularly in the housing market? I’m just going to say there are a lot of people who have predicted housing market crashes starting in 20 14, 20 15, 20 16, saying that all of a sudden all of the boomers were going to start selling their homes and it was going to flood the housing market with inventory. Well, actually, the thing that boomers care about is aging in place. If you’ve never heard this term, it’s basically that more people than ever want to live out the rest of their days in the home that they raise their family in or that they’re living in currently don’t want to either move in with a family member or into some sort of assisted living facility. And that is locking up a lot of inventory in the housing market right now.
Whereas a lot of people were expecting tons of people to be selling their home. The opposite is happening. A lot of boomers not only are maintaining their primary residence, but they own second homes as well, and they are taking up and absorbing a lot of the inventory that normally Gen X, gen Z millennials would be buying right now. And so I actually think this is a really interesting development, and if boomers actually do continue to age in place, this could put upward pressure on housing for a long time to come because there’s just going to be less turnover and less inventory for younger generations to buy.

Kathy:
On the flip side, that what is it 78 trillion of wealth that they hold and the oldest of the boomers are what? Close to 80. The younger generation should be very kind to the boomers because there’s an enormous amount of inheritance coming.

Henry:
Well, for some

Dave:
People,

Kathy:
For some people

Henry:
Also, they don’t really hold the keys to that decision after they hit a certain

Dave:
Age.

Henry:
And so their children, or typically it is the eldest daughter, is the one who’s going to make that decision on whether they get to age in place or not. And typically their children are the Gen Xers who are busy and preparing for the future and are probably, I think a lot of them are going to end up forcing those parents to sell because they’re either going to move them in with them because they’re prepared and financially able to, or they’re going to put them in care.

Dave:
Totally. Yeah. I think that’s going to be one of these interesting things, but Well, I guess there’s two things. One, as lifespans actually in the US it’s gone down, but that picks back up that lifespans continue to get extended, even if that decision is forced on them, Henry, it might be later.

Henry:
That’s true.

Dave:
And I think what we’re seeing is that it’s spread out a much longer People saying like, oh, there’s going to be a housing crash in 2015 because the first Boomer hit retirement age obviously didn’t happen. And that’s going to be spread out over a very long period of time. And as we talked about, since millennials are a bigger generation, I think we’re probably going to see a lot of those homes as they are sold, get absorbed. But the same thing is true. Henry actually wanted to ask you, because I know you’ve been thinking about exploring assisted living facilities, that means that a third of boomers, which is something like 8 million people are planning to move into a different type of housing situation, which could create other opportunities like those you’re pursuing in assisted living.

Henry:
Yeah, it’s interesting. I have a unique perspective on all of it. Yes, I do and am pursuing an assisted living community because I do think there’s a big problem that needs solved there. But I also have one aging parent, my mother who we tried to do in-Home Care for and could not. And so we had to put her into a community and then sell her house. So we did add that inventory at a fairly young age for somebody retired. And my father, on the other hand, we will have to drag him out of his house kicking and screaming. He is going to stay there until he physically cannot stop us from removing him from that house. He’s never going to sell it. It’s paid off and he wants to stay there until he passes. And so I’ve got parents on both ends of the spectrum. And so I don’t know, man, we’ll see how that goes.

James:
I feel like they have just the best assets though. It’s like, and they grew up when America kind of hit High Rev and they have the Dave Ramsey approach when they kind of grew up like, save your money, buy an asset, buy a house, save for it, and it’s kind of paid off, right? They’ve taken on a little bit less debt, but I mean, baby boomers nationwide, they have 18.65 trillion in home equity. That’s insane. Which is 42% of the total real estate wealth in the United States.

Dave:
Dude, that’s like almost the whole US national debt. We should just take it from the baby boomers and pay off the debt.

James:
You know what? They should just sell it all and donate it. I mean, why not?

Kathy:
That’s simple.

James:
I think the lock-in effect, sometimes people talk about them flooding the market, but reverse mortgages are a real thing. And when you have assets, I, and you have assisted care facilities that are expensive, and that’s a huge hindrance on families cost of living afterwards or taking care of your parents. I think you’re going to see a really big increase in reverse mortgages over the next 10 years. They have the assets, they have the equity.

Dave:
Totally.

James:
Unfortunately the millennials, we can’t afford to pay for our parents, and I think that they’re going to have to be paying for themselves. And so we might see more lock in effect just because they’re going to use their equity to live.

Kathy:
A lot of that money is going to be transferred to senior housing and senior care for sure. Okay, you guys, just to give a little bit of love, just a little tiny bit of love to the boomers that get so much hate. The oldest of the boomers were 64 years old, so a lot of boomers at the end of their fifties and in their sixties in 2008 when their retirement went down 50% during the 2008 stock market crash. So all these people, all these poor boomers who had saved and done the things lost half of their retirement when they were retiring. So for them, have the comeback that they’ve have. It’s cool. It’s cool. We got to give ’em a little love.

Dave:
That’s fair. Hopefully it didn’t sell at the bottom.

Kathy:
Right.

Dave:
Alright, well that is our generational debate. I love how we set up these shows, not as a debate, but it always just turns into a debate of who’s the best. We all are just overly competitive. Competitive, but it was a lot of fun. So thank you all so much for being here, and thank you all for listening to this episode of On the Market. I’m Dave Meyer, joined by Kathy Beck, Henry Washington, and James Dard, and we’ll see you all again soon for another episode. In just a couple Days on the Market was created by me, Dave Meyer and Kaylin Bennett. The show is produced by Kaylin Bennett, with editing by Exodus Media. Copywriting is by Calico content, and we want to extend a big thank you to everyone at BiggerPockets for making this show possible.