This page has been archived and commenting is disabled.
Boomer Doomer - The Other Side Of High Rents
Baby boomers now in their 50s have lower incomes, wealth, homeownership rates and more debt than generations before them, according to a report from the Harvard Joint Center for Housing Studies and the AARP Foundation. A third of Americans 50 and older spend more than 30% of their income on housing, while 37% of those 80 and older spend more than 30% on housing.
* * *
Rising rents have been cited as a reason millennials aren’t moving out of their parents’ basements. But, as MarketWatch's Amy Hoak details, higher rents could force some boomers to move in with their children.
So says Don Lawby, president of the Real Property Management franchise, a property management company based in Utah. He says it is shaping up to be a crisis for some boomers for the following reasons:
- The average rent for a three-bedroom single-family home in the U.S. was $1,363 in the third quarter of 2015, a 5.7% increase over the last year, according to Real Property Management and Rent Range, a rental information company.
- Workers 55 and over have, on average, saved only $150,300 for retirement, according to a Fidelity report from 2013. Assuming they withdraw 4% of their savings for income in retirement, their savings will generate about $500 a month, Lawby figured. With Social Security benefits, monthly income will average $1,791 (using figures from the Social Security website).
- That monthly income means the average retiree is likely to have a housing budget of $609 to $681 a month (going by the recommendation that 34% to 38% of income be used toward housing costs), way below the cost of renting a three-bedroom home.
Rental growth rates are the highest they’ve been since the recession, said Ryan Severino, senior economist and director of research for Reis, Inc., a provider of commercial real estate information. Reis data shows that rents rose more than 4% over the last 12 months.
“Vacancies have been tight for a very long period of time,” Severino said. “That kind of environment gives landlords leverage to raise rents.” Rents are eventually expected to taper off, however, as more apartment inventory hits the market, he added.
Yet some don’t see that tapering off happening soon. A recent Rent.com survey of more than 500 property managers predicted rents would rise an average of 8% over the next year. Eighty-eight percent of property managers surveyed said they raised their rent in the last 12 months. The report also found that rental vacancies were at a 20-year low.
Steep rises in rent make it very difficult for tenants to keep up, “unless you’re in the job market and in a position where your salary is moving with the cost of living as it increases,” Lawby said. And he’s not just talking about retirees already living on fixed incomes. If you are a boomer who lost a job during the downturn, it is quite possible that your employment opportunities have been limited and salary increases have stalled, he added.
“The boomers, they’ve come into an environment that, generally speaking, hasn’t been positive financially for many of them,” Lawby said.
»
- 36962 reads
- Printer-friendly version
- Send to friend
- advertisements -
Ha.
I am a retired boomer at 51 and live in a kick ass trailer, surf whenever there is swell, spearfish when there isn't, and play music with Spider and the boyz at a secret location on the east coast of Florida. It's cheap and awesome. It'c October 20th and 83 degrees with 40% humidity.
Why you ask? God's provision of course. Plus no debt, 10 year old suburban, 20 year old boat, free fish, and a wife that doesn't care about shiny trinkets and is still hot. I am living the dream.
You young punk yankee homos with your high rent, overpriced crappy college edumucation, commie overlords, and leased Audi's deserve to get loved tenderly by Bubba circumstance.
Live below your means for the next 20 years and you can do it too.
Suck it whippersnappers!
Boomers should've thought more about value creation and less about their house values. The average modern 4 bed brick built house in my city costs about 800k to buy today. The approximate number of bricks in that average house is 30,000. Thats 27 dollars a brick. The average price of a brick from a builders yard is 57 cents. A 4,700% markup from wholesale to retail? Thats some serious fucked up shit right there.
Here are some signs of a coming recession.
1. Business loans for M&A not CAPEX.
http://www.zerohedge.com/news/2015-10-15/there-goes-final-pillar-us-recovery-loan-growth-paradox-explained
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Fed sees 2 bubbles
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Families will need to start cooperating, as in starting and maintaining CoOps like the hippies tried to do in the late 1960's before the movement was put down and we wound up with Disco and the first Yuppie.
My wife is amazed when she visits clients in Boomer retirement villages such as that down the road in Walnut Creek CA. She finds them sterile, isolated, lonely, inefficient. She is from an old country where efficiency and cooperation within the community was very important. Common sense and a modicum of communal concern.
And, and I know many of you don't like this; when it breaks it will break along racial lines. Read it and get ready to live it. You will be better off with the devil you know.
I'm not leaving the U.S., externally. Internally I am already an expat.
As a long-term expat retiring at 65 soon, I concur with much of the Boomer dissing. Fact is, deluded masses follow the leader from yippie to yuppie or whatever the generational equivalent may be. For my father, it was hit the breadline to hit the beaches with a carbine in hand. What is the on-coming generational arc?
Don't know why a single person who retires on $1800 per month would even need a 3-bedroom house. If it was me I'd rent a trailer somewhere.
Don't be silly. There is no inflation. Look at the CPI...!! This whole shitshow is almost funny.
No cost of living adjustment for SS recipients this year.
I'd feel bad, but I won't get any SS at all when I retire.
Planning for the future has taken on a whole new meaning for our generation (I'm 3in with a 7yo and a baby).
Where those Russian haters crowds that always cry baby, russian will collasped economically?
SEE HOW FUCKED UP YOUR COUNTRY REALLY IS??
- - -
Your SS funds are being drawn by your govt to finance DEFICIT. And in return? Your govt gives SS-Funds UNMARKETABLE BONDS!! Nice!! Your SS-Funds CAN'T SELL THOSE BONDS TO GET MONEY FOR PAYING BENEFITS!!
http://www.factcheck.org/2013/11/who-holds-our-debt/
SSN, MED* insolvency.
http://thehill.com/policy/healthcare/213491-medicare-social-security-hea...
http://thehill.com/policy/finance/248816-social-security-projected-to-hi...
Really a SHITTY country....