Rick: Good morning. Welcome to the week in review for November 25th 2019. I am Rick Zich. I’m an advisor here at Southwest Investments. Joining me is Bart Schannep, cofounder and president of Southwest Investments. Good morning Bart.
Bart: Good morning. How are you Rick?
Rick: Doing excellent, excellent. Now I hear you’re in the business of making predictions.
Bart: Well, yes. Let’s talk about predictions. The problem with trying to make predictions about the future is that we bring the present with us. What I mean by that is all of our reference points are what’s happening now. We’re trying to project that into the future, and it doesn’t work.
Case in point, Wall Street Journal on Saturday November 23rd had an article called ‘How Boomers Could Cause Housing Glut’. What that’s all about is 1.7 million baby boomers are going to be selling their homes due to either death or moving into assisted-living-type places between 2017 and 2037. The concern there is that’s going to create a lot of housing glut in retirement communities where Millennials or younger people don’t want to live.
Okay. If you look at the map, you can see that where these sun-city-type places, these retirement communities are in some serious cities that have housing shortage for blue-collar workers. Okay. What I’m suggesting is if all these homes are going to be going up for sale, you cannot make the argument that there’s not enough housing in these popular cities.
The homes that baby boomers will be vacating will either come down in price where blue-collar workers can afford them, or more realistically, the whole community will be repurposed. Where these communities were originally developed around pickleball and going out on the golf course or hanging out on the lakeside, if Millennials or the next generations want something else, these communities will simply change to that.
To see a prediction that old folks are going to die and no one’s going to buy their homes, the author of this article clearly hasn’t been around enough.
Rick: Things change. They don’t stay the same. Is that right? Alright. Well, very good. Thank you Bart. I appreciate you taking the time this morning. Thank you for joining us. Remember to like us on Facebook and Twitter. We’ll have lots of miscellaneous posts that you can enjoy throughout the week. We look forward to seeing you next week.