How low is low? Has real estate bottomed out?
Via @TheBubbleBubble, some advice about not thinking the real estate bubble is done imploding:
I’d have no business whatsoever buying houses until this demographic tsunami is well underway, which years from now: businessinsider.com/matt-kings-mos…
— Jesse Colombo(@TheBubbleBubble) March 25, 2013
Via Business Insider, ‘The Most Depressing Slide I’ve Ever Created’ demonstrates that we are not generating enough of a next generation to buy our houses:
Citi’s Global Head of Credit Strategy, Matt King, has a knack for putting together useful illustrations.
Here, he examines one of the implications of one of the most powerful forces in all of economics: demographics.
King explained his charts to us like this:
It’s what I like to call “the most depressing slide I’ve ever created.” In almost every country you look at, the peak in real estate prices has coincided – give or take literally a couple of years – with the peak in the inverse dependency ratio (the proportion of population of working age relative to old and young).
In the past, we all levered up, bought a big house, enjoyed capital gains tax-free, lived in the thing, and then, when the kids grew up and left home, we sold it to someone in our children’s generation. Unfortunately, that doesn’t work so well when there start to be more pensioners than workers.
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