Future Consequences of the Great Housing Boom of 200205

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Future Consequences of the Great Housing Boom of
2002-05

• Raphael Bostic and Dowell Myers
• University of Southern California

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Key Questions

• How big was the run-up in housing prices?
• What is the current risk for market stability?
• What are the consequences for migration and
  employee recruitment?
• What are the affordability impacts on the
  younger generation? Can they buy?
• How does this bode for the retirement of the
  Baby Boomers?

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• What ARE the most important consequences?
• First some facts
• Then we debate the Top 3 consequences

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A View of the West
House Price Index (1995100)
Source OFHEO
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But Californias in a Different West, Folks!
House Price Index (1995100)
Source OFHEO
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How the Mighty Have Fallen Trends 1 Year Ago
Source OFHEO
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How the Mighty Have Fallen Trends Today (!!)
Source OFHEO
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Foreclosures Are a Story
Source Foreclosure Radar
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But Jobs are a Story, Too
Annual Employment Growth (Percent)
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Median Value for Owner-Occupied Housing Units in
2000 and 2005
Source Doris Lei, University of Southern
California
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Climbing the Mountain to California
Affordability Barrier for Migrants from Different
States
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Mounting Generational Hurdle 2005 vs. 2000
Median House Value to Median Income of Age 30-34
Source 2000 Census and 2005 American Community
Survey
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Ratio of Seniors per 1000 Working-Age Residents
Ages 25 to 64
California US
Source Immigrants and Boomers, Figure 3.2
Seniors per 1,000 Working-Age Residents
2010
2000
1900
1950
Year
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Average Annual Rates of Buying and Selling
Per 100 People of Each Age in California
True rate is 8.1
Buyers and Sellers per 100 Population
Source PUMS 5 Percent, 1990 and 2000 Immigrants
and Boomers, Figure 11.1
Age
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California Net Home Buyers by Age, 2010 to 2030
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Projection of Excess of Buyers Over Sellers in
2020
Hispanic Asian and Pacific Islander
Black Non-Hispanic White
Number of Buyers Less Sellers
Source Census 2000, PUMS 5 percent file for
California Immigrants and Boomers, Figure 11.3
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Most Important Consequences ??

• Bostic says

Myers says
1. The hangover
1. The California island
2. The crunch
2. The growing generational divide
3. Piggybank Mirage
3. The lemming effect
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Thank You
For more information, Google popdynamics
Raphael Bostic and Dowell Myers
School of Policy, Planning, and
Development University of Southern California