Trulia Pushes The Panic Button As Young Adults Refuse To Move Out Of Parents' Basements, Get Jobs

Tyler Durden's picture

Well over a year ago, we first suggested that the conventional wisdom thesis for the bounce in home prices - namely a spurt in household formation - was dead wrong. Sure enough, as has been confirmed empirically, the only reason for the latest dead cat bounce in home prices has been the Fed, and banks complicit in engaging in "foreclosure stuffing." And while it was easy to deflect the topic of just what is driving the housing market (because none of the bulls would want to admit it is just another credit and liquidity-driven bubble) for over a year, with the traditional "things will be back to normal soon" fall back used every time, as time passed and none of the traditional ingredients for a housing recovery fell into place, some started scratching their heads. This came to a boiling point today, when real-estate firm Trulia, looking at the latest Census Bureau data on household formation, finally threw in the towel and rang the panic button as not only have young Americans set anchor in their parents' basement, but even refuse to get a job.

That, and the "foreclosure stuffing" of course, with 53% of vacant homes helf off the market, "the highest share since before the bubble."

Below, courtesy of Bloomberg, is the summary of what Trulia chief economist Jed Kolko wrote in a note.

  • Census 3Q homeownership, vacancy survey shows household formation “alarmingly slow,” vacancies “remain stubbornly high,” Trulia chief economist Jed Kolko writes in note.
  • "Slow household formation number is one of the most alarming housing indicators to come out this year"
  • Share of millennials living with their parents rose to 31.6% vs 31.4% y/y
  • Household formation 380k in yr leading up to 3Q vs L-T “normal” increase of 1.1m
  • No increase over past yr in young adults moving out of parents homes or getting jobs is “most worrying”
  • Vacant homes still pose “problem” for recovery
  • 53% of vacant homes were held off mkt in 3Q, highest share since before bubble
  • 10.2% of all housing units are vacant, unchanged y/y, higher than pre-bubble level of 8.9% in 3Q 2001

And yet:

  • Oct. Trulia price, rent monitors show asking prices rose 0.6% m/m in Oct., prices up 11.7% y/y, rents up 2.7% y/y

Why? Just ask Mr. Chairwoman. After all Mr. Chairwoman has been rumored (wrongly) to be very oracular when foreseeing housing bubbles. Like last time supposedly.

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LetThemEatRand's picture

So it's true that most people who post on message boards live in their parents' basements.   I knew it!  

Mom, shut up.  I'll take the trash out later. I'm busy.

Skateboarder's picture

West coasters aint got no basements. We take over the whole damn house. Hail to the hordes!

(I live with my folks because I love them and vice versa, plus half my salary goes home anyway)

icanhasbailout's picture

Getting a job doesn't get you out of the parents' basement, that's the problem here.

Popo's picture

Well, exactly what was the plan? That houses could continue to get infinitely more expensive, and young people would just suck it up and borrow whatever absurd amount was necessary to buy a shitbox?

Of course you can't keep raising the price of something forever without demand plunging. Did economists just figure this out?

economics9698's picture

You know being in my 50s should not disqualify me from moving back into my mom’s house.  We have laws on the books preventing age discrimination.

Skateboarder's picture

Punkass high school kid just came to my door and gave me the forced newspaper subscription speech that you can't get out of once engaged in. Upon enumerating all the options for me, I said "how about 5 bucks?" and he says everyone else been giving him 10. So I pull out my cash, see 20, 10, 5, 5, 1, 1, and he's trying to snatch that other five as I hand him the first one. Motherfucker!

TruthInSunshine's picture

The Fed has tried to engineer a stuff-the-banks-with-excess-reserves-to-their-gills so as to allow them to keep delinquent and foreclosed dwellings off the market en masse (releasing a very slow trickle).

Fannie & Freddie have helped to keep vacant dwellings off the market, too.

If the vacant residential units, let alone currently vacant plus should-be-vacant (i.e. the occupied but non-paying mortgages), were to be released at anything remotely resembling market clearing levels, the residential real estate market would deflate by 40% at a minimum within 2 years - and possibly a greater % - and those who bought homes in the last 5 years would be flipped so hard & fast on their "equity" that they'd think they had been water boarded.

markmotive's picture

Look north of the border. The situation is way worse in Canada. Parents are giving kids tens of thousands so they can GTFO to buy an over-priced crack shack.

The Million Dollar Crack Shack:

GetZeeGold's picture



I'll take the fairy pixie dust job that doesn't exist because of your asinine where do I report?

CheapBastard's picture

In the 1980's Housing Crash banks foreclosed, evicted and prices corrected downward a bout 30-40% and people bought them up to live in, not to rent or Flip out by the hundreds.

Families [who could afford the new prices] bougth these correctly priced homes and the housing market completely recovered in 3-5 years with real owners and real families living within their means in houses that reverted to the mean. [And the Dean of Princeton said over 750 bankers an dfinancial fraudsters were jailed]

Here we are almost 10 years after the beginning of the crash (2006) and it has only gotten worse. Fewer can afford a house, zero downs [or near zero downs] saturate the market, and the average American is up to his neck in debt.

TruthInSunshine's picture

Fruit of the poisonous tree = byproduct of central planning pollution

Thin_Ice's picture

Boom and bust, boom and bust. That is what the cycle used to be. But since the '08 bust, there has been no boom, hardly a whimper.

F-Tipp's picture

If living at home means less welfare being dispensed, I'll take the lesser of the two shitty evils.

HardAssets's picture

Never flash your cash in front of someone who can run faster than you.

Skateboarder's picture

Ex marathon runner, 5 minute mile on demand, even to this day of no running and only skating. I'll rough up a guy if needed, but I won't beat him up for something like stealing money from me. Hitting a girl or something like that on the other hand...

spinone's picture

Five minute mile starting ....NOW

edotabin's picture

" Baitin' "


LOL!!! +100

Jeremy Roenick's picture

Mom!    Meatloaf!   ....    Meatloaf!



Falconsixone's picture

I'd move in to my parents basement but then I'd have to take care of them (Slackers). Any "experts" checking on parents living in childrens murphy beds? I wish my kids would move back. I miss the constant drama, broken things  and wading threw a mess.

drunkenlout's picture

"laws on the books preventing age discrimination"

They kick in when you're 59 and a half, but you don't get the whole loaf until you're 67.  NB:  subject to revision, as you near those ages.

icanhasbailout's picture

> Of course you can't keep raising the price of something forever without demand plunging. Did economists just figure this out?


I had top professional economists and mortgage brokers look at me like I had two heads and an IQ under ten between them for asking that same question, back in 2005.

Imminent Crucible's picture

"It's difficult to get a man to understand something when his salary depends on his NOT understanding it."

Ghordius's picture

+1 in Europe the portion of their income people are willing to spend for shelter - be it for renting or buying - is one of the most remarkably constant figures

therover's picture

Shitbox. I vote for that to become an industry standard term. 


"Hey honey. Joe from Century 21 called and he said there are a few nice shitboxes we can look at on Sunday"

James-Morrison's picture

It is hard to imagine anyone putting shit in a box. 

I have seen pet owners shitbag, but never shitbox.

Maybe it is an East Coast vs West Coach thing...

Oliver Jones's picture

Our family used to call the stamp-'em-out-all-identical new homes in the UK "SBSBs" - or "Standard British Shit Boxes".

Bangin7GramRocks's picture

It worked that way for awhile. I used to watch these homes shows during the first bubble where a 40 year old doctor had to scrape to buy an $800,000 "mid-century" 1,500 sq ft. shit box. I was amused thinking what the fuck were the teachers and plumbers living in? Shipping container?

grid-b-gone's picture

It's not just young people reconsidering how much of their lives they want to dedicate to shelter.

The industry is trying to restart the good thing they had going until 2008. What they may not realise is that the '08 shock created a reevaluation. It also drove home the idea that RE does not always go up.

And there need not be a lowering of standards. Smaller often comes with higher quality and energy efficiency.

And yes, the shipping container is not just a joke.

There is a very real movement by young people to side-step traditional builders, banks, and contractors for obvious reasons.


LOL, and it's happening to boats, too.




Wahooo's picture

How long will it finally take for the myth of homeownership to be busted and the industry to get downsized. There are no financial advantages to owning a home. It's a scam.

outamyeffinway's picture

Seems the same thing is happening in Japan. Looks like the "new economy" is causing despondency across the globe. Should make for a bright future.


"Hey kids, work your asses off, get very little for it and watch rich people get richer! You'll have no retirement but the bread is good!"


What a bargain.

fockewulf190's picture

They will take the bread away as well, and then wonder why Johnny ran amok with his AK and saved the last slug for the back of his throat.

akak's picture

Wanting a rewarding and even semi-fulfilling life, or any semblance or degree of physical and financial self-reliance, as opposed to being a regimented, low-wage (or no-wage) drone under the constant and total surveillance and control of the state, will soon automatically be considered "anti-social terrorism".

phoolish's picture

New Economy - New Slavery

HardAssets's picture

People will be slaves, if they allow themselves to be slaves. Nothing can be done without the co-operation of the population.

Their parents and grandparents may be cowards (who think they are grasping on to something). But I wonder if young people will go along with it so readily. Will propaganda trump self interest and the will to survive ?

HelluvaEngineer's picture

Hmmmmmmm...wonder if this is all that pull forward shit come home to roost.

Freddie's picture

Europe has been like this forever.  People have a three story house where all the generations live.

Young people in the USSA by a fairly large majority voted for this aka to make their life shit - probably forever.  

Deal with it.

vortmax's picture

As if wages for young people aren't bad enough, for many it's impossible to even rent a crackerbox studio apartment after Uncle Sam's cut for taxes, Obamacare, and defaulted student loan wage garnishments.

donsluck's picture

Only an idiot would opt for higher education in the current degree bubble, unless one has a firm idea how to make it pay. Unless you are already rich, of course.

hankwil74's picture

Wayyyy too simplistic.  Only an idiot would choose a private education.  There is nothing wrong with going to a community college for 2 years and then finishing up at a state school, all while working and leaving yourself with no debt.  

bigrooster's picture

Amen brother!  That is exactly what I did.  To say that you don't need a degree is idiotic.  Most 100k+ will not even interview you if you do not have a 4 year degree.  I should know I interview 40+ people a year.

Is it a good idea to go to Harvard and take out 200k in student loans?  Hell no.  I had about 10k in student debt after earning a 4 year degree and had that paid off 4 years after graduation.  Can you make 100k+ without a degree, of course.  My brother is a high school graduate and is a line man for a huge electric company making over 100k.  The point is that you need a skill of some kind.  So all you assholes who bash higher education go fuck yourself.  You are probably poor fucks who regret your choices in life.

mayhem_korner's picture



But don't assume that a degree makes one smart or useful...nor does it portend barter-able skills in the event the fiat-based "economy" goes the way of Gomorrah.

Parrotile's picture

Depends entirely on the subject choice. STEM  degrees are certainly "harder" in terms of graduation requirements, but the commensurate utility value (and so revenue capacity) is higher too.

On the flip side - learning a Trade can produce a far better ROI, especially if you live in a Country where the Government has mandated a  "Licenced" Tradesman monopoly on services (e.g. Australia), and there's the opportunity to use your skills where there is a demand - such as the current "Mining Boom" down under.

Even local Electricians seem to be living VERY well thank you (at least going by the size of housing, number and size of "Big Boys Toys", and suchlike), which is interesting, and may be of relevance to the future of educational "need" in the West.

jerry_theking_lawler's picture

Then, when you get a 'real' job in private industry that physically creates wealth, and you prove yourself as worthy, maybe they will pay for your advanced education, which you can pursue on your own time......again, keeping you debt free....and productive.


well, that is the model I took....then I talk to my friends in the public system, they had large loans, the .gov paid off some or most of it, pays them huge sums of money, sends them back to school and gives them time away from work to pursue advanced degrees. The moral of the story....I'm the fucking sucker because of my beliefs that I would be rewarded for my hard work producing true outlook is changing though after reading Ayn....may let these true 'suckers' have it very soon. (and after dealing with fucking lazy idiots over the last few years industry, what comes next is going to be GRAND).

doctor10's picture

lessee now-a "job" doesn't pay for college, doesn't pay for a house-WTF work?

XenoFrog's picture

Baby boomers want to blame all this on the young people who "won't" go get jobs.


Too bad they can't go get jobs because all the baby boomers refuse to or can't retire.

Bobbyrib's picture

That and they outsourced all the white collar jobs.

Vendetta's picture

I don't know anyone who 'voted' for the so-called 'free trade agreements' ... in fact, there seems to be very few who actually understand its implications but there are plenty who seem to defend them vigorously though they have not demonstrated a particularly deep understanding of what they support.