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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