Todd Huttunen began appraising more than 20 years ago with a few years off in between to pursue a career in cabinet making. He relegated that to hobby status and is currently an appraiser in an assessor’s office. His best friend dubbed him The Hall Monitor because of his rigidity and respect for rules. He offers Soapbox readers tongue-in-groove insight on appraisal issues. This week Todd immigrates to the baby boomer issue in housing demand. …Jonathan Miller
During the period known as the “Baby Boom”, which began in 1946 and continued through 1964, the birthrate in the United States averaged about 4,000,000 a year. By 1965, when the population was 194,000,000, “boomers”, who were then between 1 and 19 years of age, represented 39% of the total population. We have been the driving force affecting – well – everything since we first arrived. And you can bet that for the next 40 years or so, until the last of us is dead and buried, what we do will determine, to a great extent, the kind of world we leave to those of you who are under age 45. Based on what we’ve done so far, young people have reason to worry .
President George Bush and former President Bill Clinton were both born in 1946, the inaugural class of the baby boom, which numbered 3.47 million. They were the first “boomer” presidents but there are more to come in 2008 and beyond (so hopes every candidate not named McCain). Nevertheless, they represent the beginning of the 75 million strong, class of baby boomers, which is largely responsible for where we are today, in terms both cultural and economic.
As a result of our sheer numbers, nearly every major cultural shift, social upheaval or political trend of the last half-century has been a direct result of, or a reaction to, the demographic tsunami  that is the baby boom. Each decade has brought its own issues but boomers have played a starring role in each of them. Beginning in the 1950’s, when the first of us were only toddlers, new housing was constructed on a previously unimaginable scale, in the form of cookie-cutter developments like Levittown .
When Bill Clinton and George Bush were teenagers, in the 1960’s – civil rights, the “The Great Society ” and Vietnam became the big issues of the day. But since most boomers were born between 1954 and 1962, it wasn’t until the 70’s that the full force of our numbers began to be felt on the popular culture. That decade brought us feminism, environmentalism, sex, drugs and rock and roll (not to mention Watergate and a general distrust of government). Partly as a reaction to the excesses of the two prior decades, the political pendulum swung back to the right starting with Reagan in the 80’s.
Something else started in earnest right around 1984. Boomers, in large numbers, started buying houses and prices exploded upward throughout most of that decade. Although there have been occasional, minor downturns in the market since then, the overall trend in real estate for the past twenty or so years has been one of steady increases, with some periods, 1998 2005 for example, of unbelievable increases.
It is not a coincidence that the boom in real estate, which by-and-large took place over a twenty year period, reflected the demand created by a generation of baby boomers, whose prime home buying years are now behind them. Is there any reason to believe that as boomers move from the “demand” to the “supply” side of the equation they will have any less of an impact on the real estate market in the years ahead than they’ve had on most every other issue in years past?
That’s why it seems to me that all the chatter about “corrections”, “bubbles”, “soft/hard landings”, “bottoms”, etc. misses the point. Even when you allow for the possibility that immigration has helped do what the birthrate in this country has not, which is to add to the number of future potential buyers, it seems to me that “demand” in the coming years has no hope of keeping pace with “supply” as boomers age and go from being buyers to sellers. To suggest that the impact of baby boomers on real estate in the next two or three decades will be any less significant than their impact on the major events in every other decade since the 1950’s is folly.