I just came across a report that confirms what I've been saying for almost 2 years! People are getting tired of living in crowded homes and putting their lives on hold. The "demographic component of housing demand is strong; it’s just the economic and psychological components that are holding things back". New households are being created faster this year than they have since before 2007. With a low inventory of homes available this could go a long way to help jump-start the housing market.
Over the past few years we have seen an increase in the "moving-back-in-with-Mom-and-Dad" phenomenon. College graduates have been unable to find jobs upon graduation and return to live with their parents. Now that employment is begining to recover these graduates are excited to get their career going and move out on their own.
Rise in employment also helps those who have been doubling-up in homes because they can't afford a mortgage. Whether they are living with family, or renting, the improved employment market will empower these individuals and families to take advantage of low home prices to start their new household.
According to this report there has also been an increase in cases of Shaken Man-Child Syndrome which is making it even more dangerous for single men to be living in their mother's basement. :)
During the economic down-turn, there has been a decrease in divorces across the country. In 2011 a survey was conducted among people who had canceled their divorce. 38 percent indicated that the recession prevented them from getting a divorce. One St. Louis law firm, which specializes in divorce cases, had a 20% increase in customers during the first quarter. "There is a pent-up demand for divorces,” the principal partner says. He attributes the rise to improving economic conditions.
Other conditions that contribute to the shadow demand include immigration, natural growth, and forced renters. People who had to foreclose or short sale are not able to purchase a home. As their credit recovers they will be able to purchase new homes and add to the increasing demand.
People have been putting their life on hold for a long time. As psychological and economic conditions improve we will see a large increase in new households created. It is predicted that there will be between 750,000 and 1 million new households created in 2011 in the US. The current market cannot sustain this increase in demand. Either prices will increase, or more homes will come on the market to be sold.
About the Author:
Utah Dave - Daybreak Neighboorhood Expert and Local Resident
My friends nicknamed me Utah Dave in high school because they said it didn't matter where we went in Utah, I would know how to get there and who we needed to talk to. The name sticks today as UtahDave has formed into a professional real estate network of Neighborhood Experts all across the state. I live in Daybreak with my wife and 4 amazing children. I enjoy dancing (which is how I met my wife Dawn) as well as traveling, coaching, and learning.
