If Demographics Are Destiny…

Bill McBride at Calculated Risk put out a fascinating table on his blog recently that shows the coming changes in the demographics in the United States:

These numbers are amazing. In 2020, the most common ages will all be between 25 to 35 years old.

I get questions all the time from investors asking me about the impact that retiring baby boomers are going to have on the markets and the economy in the coming years. I think people underestimate the impact that the millennials — who recently overtook the boomers in numbers — will have to counteract their parent’s generation.

People seem to think that millennials are all going to live in huge cities their whole lives and never buy cars or houses and settle down. My guess is that my generation is simply putting traditional next steps into adulthood off for a few more years than previous generations. In the past people used to get married right out of high school or college. Now young people go to college (many for an extra year or two), then go to live in a big city for a few years to have some fun, maybe go to grad school and by the time they decide to settle down they’re in their 30s.

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Most people buy houses in the age 30 to 45 I think. So demand for houses will shoot thru the roof between 2020 and 2030. On the flip side rentals and multi family will soften as millennials stop renting and start buying, en masse.

So maybe the current trend of young people moving to SF will reverse as millennials start having kids and discover the joy of backyards and 2-car garages. You know, garages that can actually fit a minivan or two.

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Shoot. Forgot to include link to the original article


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I don’t feel like demographic analysis makes sense for the US since we have such an influx of immigrants. We can change our demographics quite a bit by changing who we let in.

One million immigrants a year vs 300 million. …may make make a small difference in a few locales like the BA…
Besides immigrants are usally young…may mean even more housing demand from 2020 -2030 than this guy is predicting …2020 is only four years away. If there us a slow down in demand in the next 4 years it will be overcome by this huge demographic shift…as powerful as in the 70’s when demand and prices skyrocketed. .

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Right. Besides housing think size of working population and spending power. 30 to 45 years old spend a lot because they have to. Houses and kids are not cheap. Both the stock and housing markets will have huge tailwinds at their backs.

The next 15 years will be golden. Buy buy buy! :fire: :fire: :fire:

Immigration has been slowing…in fact reversed going to Mexico…Trump’s wall may end up keeping more in than out…lol
The population of illegal Mexican immigrants in the US fell from approximately 7 million in 2007 to 6.1 million in 2011[56] Commentators link the reversal of the immigration trend to the economic downturn that started in 2008 and which meant fewer available jobs, and to the introduction of tough immigration laws in many states.[57][58][59][60] According to the Pew Hispanic Center the total number of Mexican born persons had stagnated in 2010, and tended toward going into negative figures.[61]