Thursday, 27 May 2010

Swirling the drain..........from Rico

Residential real estate is swirling the drain.

Why? What? Huh? You might fairly ask...especially if you get your news from the media and believe a 'recovery' has started, and believe Obama-Soetoro who claimed 'we have averted a disaster' (thanks to Team Obama).

There are 140 million personal residences in the United States today.
- Zillow says 20 million owners 'plan' to sell their homes if there is any improvement in price.
- Four million existing homes are currently on the market.
- Lennar, Pulte, et al have one million new homes for sale.
- There are one million bank-owned properties.
- Eight million mortgages are late on their payments.

Not very good numbers.

Now consider that the 80 million baby boomers are retiring at a rate of 10,000 per day, many wanting or needing to downsize residences as they age.
- Assuming they are downsizing from a 2,500 square foot home to a 1,000 square foot condo, and/or a 100 square foot assisted-living facility, that is a shrinking of demand of 4.3 billion square feet per year. [Figure roughly the size of San Francisco each year.]

Think the 65 million Gen X-er's are going to pick up the slack in the market?
- I would not bet on it, not with unemployment and taxes climbing...and inflation, serious inflation, has yet to hit.

Take away = It's probably NOT a very safe investment to make right now.

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