I came across an article today and thought it would was an interesting discussion topic.
Bloomberg.com’s piece, “Young U.S. Adults Flock to Parents’ Homes Amid Economy“, was an eye opener for me. I immediately thought of the impact this has made on parents wanting to buy condos and developers wanting to sell their new inventory to those same parents.
It took me back to 2004, 2005 and 2006 when condo developers were salivating over the prospect of thousands and thousands of baby boomers downsizing from their 3,500sf homes to move into a in-city suite. Statistics and projections were pointing towards a massive opportunity for developers. I can remember sitting in meeting after meeting with consultants, architects and planning managers that all had the same vision. The real estate market was a on fire and the next step in the process was the Baby-Boomer “downsize movement”.
Obviously we know where the story goes from there. In late 2007, the U.S. entered the biggest rescession since the Great Depression and the rest is history. Values for homes fell – handcuffing the boomer generation to their existing homes. Furthermore and as the article suggests, more and more kids that had recently left home and graduated college, came back to move in with mom and dad.
Seeing the recent progress in sales for projects like Bellevue Towers, Enso, Escala, Olive 8 and 1521 seems to point at a stronger recovery for the Seattle region. I can speak for multiple clients in the Boomer generation that have recently purchased an in-city unit. Market fundamentals have improved. I wonder, how many Boomers dealt with this issue – continuing to care for their kids, while enjoy the fruits of their labor (financial goals, traveling, condo purchase).
I’m interested in your thoughts.