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Given the chance would we do as the Boomers did?
700 sats \ 9 comments \ @dingding541 2 Feb econ
Following on from #873783 the Baby Boomer generation has often been accused of making it worse for young people to buy real estate today.
For many Boomers, buying a home was a relatively affordable and straightforward process.
They benefited from low real estate prices, favorable interest rates, and government policies that made it easier to purchase homes with low down payments.
As a result, many Boomers were able to buy homes at a young age, often in their 20s or 30s, and watch as their property values increased over time.
However, as the years went by and the housing market continued to grow, the Boomers' decisions began to have unintended consequences.
Many held onto their homes, choosing not to sell or downsize even as they aged or their families grew up and moved out.
This limited the supply of available housing, particularly in desirable areas with good schools and amenities.
At the same time, the Boomers' children and grandchildren were growing up and entering the housing market themselves. But by this point, prices had risen significantly, making it much harder for young people to afford homes.
The average home price in many parts of the country had increased by 500% or more since the Boomers' heyday, while wages had not kept pace.
If we're being honest, how likely is it that if we had the chance to buy real estate at cheap prices today, how many of us would do exactly what the Boomers did?
Would we would snap up affordable homes in desirable neighborhoods and hold onto them for as long as possible?
Or would we forsee that by adopting this behaviour, it would impact future generations?
And then this begs the question, in the future will GenAlpha and future generations blame us for benefitting from cheap Bitcoin prices and driving up the price, making it impossible for them to own a whole Bitcoin?
You could say there are parallels?
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158 sats \ 2 replies \ @freetx 2 Feb
favorable interest rates,
Not exactly.
Interest rates in 1980 were about 13.5% and reached 18% in 1981.....
The high interest rates didn't destroy the boomers because in general few people had "investments", most people just had a savings account, so it was great to be getting ~10% in your regular bank account.
Part of the reason why boomers were able to make out so well on real estate was because housing prices were crushed by high interest, so there was no where to go but up, especially as interest rates moved towards 0 for nearly a decade. Added to that, the boomers had relatively little debt and so the high interest rates helped them because they had savings.....
There is more to the story (good paying jobs, etc).
how likely is it that if we had the chance to buy real estate at cheap prices today, how many of us would do exactly what the Boomers did?
Everyone would do it. Why wouldn't they?
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36 sats \ 0 replies \ @siggy47 2 Feb
My first mortgage was 18%, and it was a crazy negative amortization loan. I bought right before there was a big dump in the housing market. I didn't break even on that condo. Ever. I dumped it when I got married. I bought a house with my wife in 2007, right before the great financial crisis. I was lucky to hang on to it, but a lot of my friends weren't. This whole conversation reminds me of how I feel about bitcoin. I wish I bought it in 2012. When you zoom out the graph is straight up to the right. When you're living it the year to year ups and downs aren't so easy to navigate.
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36 sats \ 0 replies \ @Bell_curve 2 Feb
Because of high inflation, housing prices did increase by 4 or 5x between 1966 and 1983.
The stock market started gaining momentum in 1983. Inflation was under control by mid 1983. GDP grew by almost 7 percent in 1984.
Reagan won 49 states. Morning again in America
update: In 1970, the foreign born population was only 5 percent. 1965 Immigration Act was still new and illegal immigration was much much lower than today (hopefully this will change too).
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30 sats \ 0 replies \ @Aardvark 2 Feb
We definitely would because as you said, we're doing the exact same thing with bitcoin. Let's take it one step further, we're all way more educated on what's going to happen with bitcoin than the boomers were with property.
The boomers (for the most part) bought what they needed to live, where most of us are putting in as much as we can with no plans to stop.
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15 sats \ 1 reply \ @sangekrypto 3 Feb
If you own a house at a young age, your future is sure to be successful. If I don't have a house, let alone a house, I can't even buy a vehicle.
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0 sats \ 0 replies \ @SwapMarket 14h
Nonsense. Own house anchors you down and limits your horizons. I rented until the age 35 and lived in 4 countries following better job markets.
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15 sats \ 0 replies \ @0xIlmari 3 Feb
[...] making it impossible for them to own a whole Bitcoin?
You need a whole house to live in.
You don't need a whole Bitcoin for anything. (Maybe bragging rights.)
It's fine if Bitcoin goes to the moon if it demonetizes everything else because (a) things that you actually need will become more affordable and (b) whatever the next generations earn and save will appreciate (Boomers had to contend with money that loses value so they hoarded other things).
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15 sats \ 0 replies \ @Butterfinger 3 Feb
It depends what you mean by "we", people here on SN are not the average joe or one member of the masses that just follows what the majority do.
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24 sats \ 0 replies \ @Undisciplined 2 Feb
One of the things people conveniently leave out of the story is that Boomers moved all over for economic opportunities.
There still are many opportunities for those willing to move, or at least there were until fairly recently.
Our first house was $70k. By the time we sold it a few years later it was $170. The house we're in now has appreciated considerably (in nominal terms) from when we bought it a few years ago.
In a growing economy, each generation gets their opportunities.
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