There are probably some interesting conclusions to be drawn from the 10-12 years statistic and the upward trend this is on regarding tenure. Especially considering that Boomers have miserably little equity in their homes (some $50-60k at the median). While many of them have, at this point, retired and likely moved, it would seem likely that a lot of this statistic would be drawn by fewer Boomers moving around over the last decade or so and instead continually refinancing their home. Maybe they are hanging on to the space for the sake of putting up their Millennial children, who are, of course, more living with their parents later and later into their twenties. That's not the reason for low inventory, though. Millennials living with parents, or Millennials being much more likely to live 4 to a 1,100sqft apartment should have a relieving effect on inventory. It doesn't quite make sense.
But strictly speaking directly to your point, no. Boomers staying put is actually good for housing. The more people stay put, in general, the better it is for everyone. Fewer people moving should mean that there are fewer displacements overall and there's less scrambling when it comes to everyone finding their home.
I've found "low inventory" is actually very broadly misunderstood term. I've been writing about it. I shared my thoughts on the term in a discussion elsewhere as it applies to my market in Fayetteville, NC. I will copy it here. See below:
Now, I'm not specifically sure what you're looking at, but a lot of people will say Fayetteville has low inventory. I think this is a reasonable way to describe the situation if you're looking at it in relative terms. And for 98% of people's uses, it gets the point across. The people who own aren't willing to sell while the people who are interested in buying need to buy, and therefore prices are going up. When we talk about inventory, we're usually trying to talk about price. But in terms of closed residential sales, here are my MLS's numbers over the last four years.
2017 - 7,999
2018 - 8,727
2019 - 9,462
2020 (YTD) - 8,791
This turns the narrative on its head. That is a firm upward trend. And *even* if 2020, in its last 70 wintery days, sells at only half the pace of its first 296, we can still expect it to get over 9,800. And this doesn't even consider the increase in wholesale activity that we know is taking place in our market.
Again, most people you talk to, even most brokers, they don't see a lot of homes available on the market, they'll swear up and down inventory is low. That's what low inventory is supposed to mean. Certainly prices agree to this. We can look at average sales prices and get the same conclusion. Total sales volume (rounded) stated as well.
2017 - $165,782 / $1,326,000,000
2018 - $172,547 / $1,506,000,000
2019 - $180,039 / $1,704,000,000
2020 - $195,329 / $1,717,000,000 (YTD)
That's what's supposed to happen when you have low inventory. Prices go higher. And that figure there is worth noting. 2020 has surpassed 2019's volume and with over two months to spare. You've probably figured out by now how this circle squares. Last piece of the puzzle. Average days on market.
2017 - 97
2018 - 85
2019 - 75
2020 - 53
This is our pretty clear culprit. Houses are in such demand and even at such high prices that the reports that suggest inventory is low are only looking at listings that are active within a given window of time. Because time on market is compressing, this metric is giving us lower perception of the volume going through the market. There are more houses under contract at all times, but fewer that are actively listed and accepting offers. And these houses are also selling for more.
Does this make it a bubble? We'll see what happens, but I don't think so. I've very fimrly believed in the thesis that we have yet to be hit by the true force of the wave (the so called Silver Tsunami) incoming from the north. I think it's more accurate to say that that's the bubble that's bursting. COVID tends to obscure the statistics somewhat, and it's confused the market operation in places like the Tri-state area, but I have a feeling that we're hanging out on the price plateau of NYC real estate. When COVID recedes, when the equity market loses the mania and prices dive down (possibly dramatically) to reflect future earnings potential, and when people start getting laid off or told that their office is going fully virtual and they can work from anywhere in the country, I have to assume that that is when we are going to start seeing the dramatic effects of the gargantuan pan-American urban/suburban-area real estate bubble burst.
