LETTER TO THE EDITOR: Population issues account for housing issues

I have long known there is an endemic rot in the housing market, but recently, I have been unwilling to tell people we are in for another housing crash, chiefly because my husband and I had to reposition ourselves in advance of the calamity and for personal financial reasons I didn’t want to widely advertise the forthcoming calamity.

Interestingly, on the 26th of May, Alan Greenspan broadcast the prognostication of another debacle in the housing market.

Although Mr. Greenspan maintains that the coming crash is going to be worse and have more profound effects on the economy than the previous one, he wouldn’t identify (pardon my talking-head jargon) the fundamentals supporting his supposition. Nor would he suggest a time frame.

I have noticed that economists do not like submitting details because their careers are at stake. I’m a retired grease monkey, so, I don’t care if I’m partially right, a little bit off or dead wrong. I am not a bear who always seems to think the market is going to crash whenever it approaches a resistance level, as some are maintaining now. Nor am I a Chicken Little who says the ski is going to fall every time the Fed hints at raising the rates; that portent is mostly a tactic to prompt more monetary easing.

As a hobbyist futurist, unlike Mr. Greenspan, I will address specifics. The problem is rotted in population statistics that anybody with half a brain can understand. Because the numbers speak for themselves, the “powers that be” don’t want to point out to the average person that there’s a storm a-brewing on the horizon. This is because someone is going to have to flip the bill, folks, and I don’t think it’s going to be economists or politicians.

The crux of the matter is that my generation, the ginormous Baby Boomer crowd, will be lumbering to our graves over the next 10 to 20 years. With the availability of safe contraception, many of my generation restricted themselves to producing one or two children, and a higher percentage than ever before opted out of having children entirely.

That means a lot of the houses we are sitting in are not going to have any heirs who want to take up residence in them. This is because the deceased owners’ progeny mostly bought their own places or, as often as not, their careers took them far afield of the hold family homestead.

Already, there are many houses rotting on the market for two or more years, and believe me, heirs are not getting the money they thought they would for these castles, especially if the house is currently over 50 years old.

Now, you might think this is a boon for those in the market for a home; not necessarily. Many of those who were previously blocked by circumstances from home ownership still are, and will yet be unable to purchase even those undervalued, aging properties.

As for those heirs who think they are going to make a fortune renting out Mom’s old place when she buys the farm, they ought to think again because, as likely as not, the government is going to make it more attractive to abandon aging properties than to hold onto them. I’d love to explain that exertion, but I must observe word count.

As more of the Boomers die, the situation is only going to worsen, and I can explain that in brief. Unless the federal government mandates that properties deserted by death and/or disinterest be given to immigrants and the homeless, Michigan is not the only state that will be suffering from Detroit-like blight.

Giveaway programs are not going to work the requisite magic because the statistics still won’t support the builders whose laborers will be out of work, which will place downward pressure on commodities from pork bellies to lumber.

There is a “final” solution, but it will hurt a lot, and Germany is exercising that option as we speak, while the Chinese have backed away from their “one couple, one child” policy. Please do not mistake the Chinese for being great humanitarians because they realized they have a serious problem. I suspect all the pains that can be extrapolated from such a dire circumstance are what Mr. Greenspan was alluding to without sounding like a party-pooper.

Carol Hotte

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