Will immigrants save housing?
From the New York Times Key Magazine:
The Immigration Equation
The Immigration Equation
It’s often said that immigrants do the jobs Americans don’t want to do. They’ve just been assigned another task: Buy the homes of the baby boom generation. But this task is one that native-born Americans simply can’t do. There won’t be enough of them.
Many of the 78 million boomers, the first of whom turn 60 this year, will sell their property over the next two decades, says George Masnick, a research affiliate with the Joint Center for Housing Studies at Harvard University. Some will move to a smaller home or to their second home, others will move into a managed-care complex. And for some who never moved, it will be their estate making the sale. What many boomers should be asking right now is who will buy their 34 million homes. The buyers may well be immigrants, and not necessarily legal ones (about 12 million of the 35 million foreign-born people in America are illegal immigrants, according to estimates from the Center for Immigration Studies, in Washington).
Demographers say there aren’t enough potential homeowners in the echo boom (the children of the baby boomers) or in the generation that comes after that (still without a catchy name) to soak up that supply, no matter how slowly it goes on the market. (It is presumed that the bulk of the Gen Xers will have done their home buying by then.)
Without sufficient demand, prices will fall. Masnick predicts that as many as 90 percent of the homes will be bought by native-born Americans. “But the last 10 percent is central,” he says. “Without that 10 percent, it will be a buyers’ market.”
...
The good news is that there are enough young first- and second-generation immigrants to do the job. The popular telling of the American dream that has Smith selling to Schmidt who then sells to Shapiro will record the next chapter with Sung and Sanchez doing the buying. Dowell Myers, a professor at the University of Southern California who studies the impact of demography on urban planning, says, “The odds are that a white baby boomer won’t be selling to another white.”
...
But it’s no sure thing that immigrants will save the day. A lot can go wrong. “The danger is downward mobility,” says Fred Siegel, a professor at the Cooper Union for Science and Art, who has studied immigration patterns. “If a significant portion of recent immigrants are downwardly mobile, then that is bad news for the boomers. Who will afford the McMansions?”
12 Comments:
Will immigration save housing?
No, not under current system.
It took 10 yrs for us to get perminent residency, aka green card. Both of us with Master Degrees from US Universities, me a chemical engineer making 6 figures, wife a CPA.
If US keep favoring illegals, there will be fewer high paying legal immigrants. 12 million out of 35 million are illegals, guess how many of them are lawyers, scientists, engineers, doctors, CPAs, none. If US thinks day labors can buy baby boomers houses, fine.
{{{Demographers say there aren’t enough potential homeowners in the echo boom (the children of the baby boomers) or in the generation that comes after that (still without a catchy name) to soak up that supply, no matter how slowly it goes on the market. (It is presumed that the bulk of the Gen Xers will have done their home buying by then.)}}}
That is incorrect for the NYC/NJ. Gen Y & the Echo 'Children' will have a huge of money to spend on housing which will ensure surging home prices, rents & consumer spending for years to come.
The bulk of home buying in Manhattan, Hudson county and on Long Island are those in Generation Y or those who are between 25-35. They are the ones who are buying most of these condos going up downtown and on the JC / Hoboken waterfront.
Much of the home buying & renting is being done by native born Americans from other parts of the country who come to this area after college graduation with a six figure job in hand and another $100,000 or so in cash to buy a condo or co-op apartment.
You guys are kidding yourself if you think that there is going to be any 'real' slowdown or anything resembling the last real significant economic slowdown from 1990-1992.
And most of these immigrants you speak of will be relegated to the outer reaches of the outer boros and the cheaper parts of Nassau & Suffolk where they will live 5 to a one bedroom apartment.
who needs 'expert' demographers and researchers anyway. everyone knows the anonymous $300 jeans guy knows the 'real deal'
Once again, Grim, when you post an article, you leave out just enough to fully "slant" it your way.
Here's what you left out:
From the NY Times article on immigration and housing:
"The good news is that there are enough young first- and second-generation immigrants to do the job. The popular telling of the American dream that has Smith selling to Schmidt who then sells to Shapiro will record the next chapter with Sung and Sanchez doing the buying. Dowell Myers, a professor at the University of Southern California who studies the impact of demography on urban planning, says, “The odds are that a white baby boomer won’t be selling to another white.”
He or she will be selling to what we today call a minority, though in many communities, whites may then be in the minority. “The immigrants will take up the slack,” Myers says, “and it will be huge.”
The even better news, Masnick says, is that “the second-generation immigrants will hit the housing market just when they are needed most.”
I like what you do here, Grim, but your selective editing can be misleading.
"The bulk of home buying in Manhattan, Hudson county and on Long Island are those in Generation Y or those who are between 25-35. They are the ones who are buying most of these condos going up downtown and on the JC / Hoboken waterfront"
I can sum up these kids easily. They are the Greenspan children. These kids only know credit and everyday will be the roaring 20s.
Too young to know of hard times and slow downs. You know the debit levels of these people? Its staggering. Actually, its out right dangerous.
Its credit my friend that is making this all happen. Loose credit has it ramifications which will eventually slow things down and make your salary worthless.
"You guys are kidding yourself if you think that there is going to be any 'real' slowdown or anything resembling the last real significant economic slowdown from 1990-1992."
Any what makes you think this?
I would love to know. Perhaps you know something we don't? If so, by all means...do tell.....do tell...
;)
SAS
Said before but needs to be said again for anon 10:07 pm. Real estate never goes down in NYC; it's only up and up and up in the center of the world. We're a magnet for nothing but talent that can rake in six figures by the time their 25 yrs. old. Aren't interested in having a family, don't no what community means, wouldn't need or want a house like McGreevey's, but hey, a rising tide lifts all ships. Opps, sorry about the China reference . . . . Forgot, we're the center of the world--first Athens, then Rome, then London, then NYC, and never ever anything else to follow. Elysian fields forever and ever. Stars and stripes too!
WM
I think folks are confusing issues here. The discussion in this article refers to trends which will be fairly long term either way. Many of the responses and IMHO most of what the blog has been about are short term questions about the current "bubble"
Not sure that Gen Y and Echo Boomers can pick up the slack once Baby Boomers start moving out of the picture after 2010....
It seems true that a certain portion of the buying activity in Manhattan, Hoboken, etc., is driven by Gen Y twentysomethings "buyers" (with their rich Baby Boomer parents actually paying the money). But it's one thing to buy your twixter kids a "Hoboken condo" in their early twenties while they delay the real world for another 5 or 10 years for "grad school", "finding yourself", a "sabattical" yadda, yadda. It's quite another to be subsidizing this generation when they are in their thirties and forties. At some point (late twenties, early thirties) this generation will have to start standing on its own and generating its own high income. Can they actually do that? Maybe I've missed something, but no economist I've read is predicting that this generation is going to do that due to their debt levels and the future of our economy.
There will always be trust fund babies. But for most young people in our area, they won't be able to afford their their first home purchase until late thirties. I'm guessing, in the meantime, they will be stuck in urban transit village type rental markets..
Hhahaaha. Oh well the Times knows it can't do a short-term rosy piece on RE without looking stupid, so it has to play suckup to its RE advertisers in its ill-timed glossy by doing a long-view thumbsucker.
The latest census trends (reported by the short-term memory losing Times) show that NYC is losing more residents than it is gaining, and that immigrants are increasingly just using NYC as a jumping off point before heading to more affordable lands.
I do know however that immigrants have fueled the buying frenzy in the boros -- by being suckered into taking out risky loans -in those "100 percent financing" "owner pays closing" ads that peppered the newspapers during boom times.
The epicenter of the housing bust here will be filled with sad stories of immigrants who will lose their homes. All because of a mania fueled in part by speculative lending, and in part by the media, who selectively remember data or just can't seem to add up the numbers.
Our median homeowner incomes here are not sufficient to support asking prices for properties. This charade worked in easy lending times, but those times will be over very shortly, and the walls will come tumbling down, and those young people and immigrants will be renting, or leaving.
You can double talk all you want
about housing in NJ. Facts and
numbers are the real truth.
NJ has a white flight problem.
It also has a company flight problem .
NJ has become a welfare state.
It has been sucked dry and it
is upside down as in a BK.
Read the papers today.Orange as
an exampl. Revaluation has doubled
many taxpayers real estate taxes.
Who will replace the home owners
who want to get out. An illegal
Mexican? I dont think so.
It goes on and on in NJ, and many
other states.
Look around you.Who are these people?
I graduated from college, but I have trouble understanding this NYT article. Please help me...
1) "second-generation immigrants": How are they different from "native-born Americans"?
2) “The odds are that a white baby boomer won’t be selling to another white.”:
The article says the native-borns can absorb about 90% of the baby boomer's homes. I believe the Whites still make up about 65% of the population. That means the majority of those who buy the homes will be White.
Am I missing something?
Or is this article sub-standard somehow?
No, it is just a typical NY Jazeera article. It once was a quality newspaper, but certainly not anymore.
Post a Comment
<< Home