Over the last several years, I have taken every opportunity to attend classes from Charles Shinn when I hear he will be in Northwest lecturing. When Charles talks – people listen. Take a moment to read a recently published article on the next wave of buyers.
Every time we have had a housing cycle, the industry has had to change. I have always said, the buyer coming out of a downturn is different from the buyer going in, and this is definitely the case this time. The housing product that was in demand prior to the collapse of the market is not what the new customer wants during the recovery. The longer and deeper the housing cycle is, the greater the change in customer preferences.
For the last 40 years, we have been following the baby boomers through their life cycle changes with our housing products. Coming out of this cycle, the baby boomers are moving into the downsizing stage of their lives. However, they will not return to the market in any significant number until the housing prices at least stabilize. They are over housed and can postpone the buying decision.
The next population group, the Generation X, now in the prime home buying age of 28 to 44 years old, is only two-thirds the size of the baby boomer generation. The generational gap will contribute to a significant decrease in demand of the most popular housing product that was available prior to the recession.