AgeBasedSpendingPatterns

I’m looking out 20-30 years, around when I’d like to be heading into my own retirement. I’ve always been one for the long game when I finally get my head out of the sand. <grin>

If you find any demographics data for what kind of $$ beating age-ranges are taking on home prices, post ‘em please. Though I think the graphs below give us a pretty good idea who’s at risk.

Found this, which seems to track for some of the info. Interesting reading, though some of the claimed dates seem out of whack (like it’s older info and hasn’t been updated recently).

http://www.hsdent.com/class-1-predictable-spending-patterns-at-different-ages-and-stages-of-life/

A few pages later:

As larger groups of consumers age and spend more, the economy grows. When large groups in the population pass their peak stage in spending, the economy slows down.

If this is correct, as the boomers age, our economy will slow (duh, my grandfather and father spend a lot less than I do). If the recession lasts too much longer, when we come out, we will come out to a slower economy. Much slower since much of their wealth is being destroyed now (IMO). Either the spending pattern for a given demographic will change, or, more likely, we’ll have all learned our lesson and be stuffing our mattresses for years to come.

OK. Now it gets fun.

http://www.housingzone.com/giants/article/CA6555474.html

"After 2010, the leading edge of the boomers will pass age 65, and growth among the elderly population will substantially exceed that of younger adults… "This is best seen in the ratio of those aged 65 and older to working-age adults (aged 25 to 64). After decades of relative stability, this ratio will surge 30 percent in the 2010s and a further 29 percent in the 2020s, altering the balance to which we have long been accustomed."

The result will be a significant increase in the number of older home-sellers relative to younger home-buyers, though the impact will have wide regional variations. "For example, from 2010 to 2030, the ratio of seniors to younger adults is expected to rise 59 percent in New Jersey, 64 percent in Ohio, 66.4 percent in California, and 82.4 percent in Arizona, a magnet for retirement migration," the report says.

"We expect that this change will make many more homes available for sale than there are buyers for them," Myers says. A glut of baby boomer homes coming onto the market will be readily apparent after 2015, according to Myers, and will be felt especially in outer ring suburbs among homes built between the 1980s and the 2000s.

But they may choose to stay in their homes because of this, and possibly for a variety of other reasons too (read the link for their thoughts of the other reasons).

Page 10 of this link is interesting: It shows that the amount of equity people have in their homes has been dropping over the last 20 years. And debt is going up for older folks, a bad trend.

http://www.jchs.harvard.edu/publications/finance/w08-7_belsky.pdf

This part below seems to support my sentiments exactly, and seems to explain why the grubbimint is so all-fired hot to fix the housing market (well, they sure act like it, but their actions seem to indicate something else, don’t they now.):

Leverage is all important to the absolute and percent return on housing assets. Thus, the

tightening of credit standards in 2008 has reduced upside potential returns on investment for new

entrants to the market and has elevated downside risks. By leveraging less, the value of homes

purchased will be lower, all else equal, and thus the ratio of household wealth to consumption

and with it the marginal propensity to consumed from wealth. This could be a drag on the

positive influence of house price growth on consumption once the current turmoil has passed.

Summing up, housing wealth effects make a difference to the economy, and the

appreciation or depreciation of housing values which drive them make an enormous difference to

the balance sheets of over two in three American households. Efforts by policy makers to avoid

large swings in values would produce more stability in the economy while providing an

opportunity to build wealth in housing with less risk,