Grant Cardone Prophecy

[John Matthew Johnston]

I recently watched a video of Grant Cardone predicting that when all the baby boomers die off there will be a large surplus of houses which will drive down prices across the board. You hear a lot about shortage of houses but don’t really see much predicting excess housing. What do you guys think?

https://fb.watch/gOI2Ev7At9/

[Dan H.]

Quote from @John Matthew Johnston:

I recently watched a video of Grant Cardone predicting that when all the baby boomers die off there will be a large surplus of houses which will drive down prices across the board. You hear a lot about shortage of houses but don’t really see much predicting excess housing. What do you guys think?

https://fb.watch/gOI2Ev7At9/

 There are already many markets with declining populations.  In general these markets have long term RE appreciation below the inflation rate (so price has declined in inflation adjusted dollars). The Midwest has many such cities (some of which have done ok over the last 5 years). Look at neighborhoodScout at various cities and you can see that cities like Detroit and Cleveland are cheaper today than the were in the year 2000 in inflation adjusted dollars.

At BPCon the closing speaker indicated only 2 states had natural (not including immigrants) population growth (Utah and North Dakota).  I have not attempted to fact check her statement but I am assuming it is factual.  This implies that 48 states do not have natural population growth.  This implies before immigration, there should be no need for more housing. 

The US does not have a housing shortage.  Certain areas in the US have a housing shortage.  

The extent that boomers dying off will dictate a shortage of housing is largely dependent on the number of immigrants admitted to the US.  If no immigrants are admitted to the US (not going to happen) we would have an over abundance of housing as the boomers die off (based on 48 states not having natural increasing population.  If an abundance of immigrants are admitted to the US, there will continue to be many cities with housing shortage.

My market has a long history of long term appreciation far in excess of inflation.  I expect for my market, this will continue as the baby boomers die off (regardless of the number of immigrants admitted to the US).