Generation Gap In Buyers
Beyond speculating the ups and downs of the market, there seems to be a disjoint in most peoples’ thoughts about the future of the real estate market, and more importantly, its future buyers.
The future of the real estate market is dependent on an availability of properties, but also on the presence of an actively participating buying and selling population…which, at this point, is looking feeble at best due to the weight of insurmountable student debt that the next generation of buyers are dragging into the market by their ankles. Now, buying a house could potentially slip right off the list of practical goals for many of those who are classified as ‘the next generation’. After all, when weighing out paycheques, these future buyers are likely to contribute to their existing (not to mention huge) debts; and that’s a hindrance the market will unfortunately have to absorb one way or another.
The actuality of this more-than-slight oversight has manifested itself into what will be a pretty huge speed-bump in the potential future of the property market. While currently being sustained by a generation of predominantly successful and career-achieved individuals, this is about to shift to a large population of over-educated, under-paid and unemployed individuals. Scary isn’t it?
Conceptually, buying a house became even more intimidating for this debt-ridden generation when the amortization laws became even more constricted this past year. Even by cropping the amortization lengths by only 5 years, this translates into a whole lot more money that nobody (at least in this crowd) seems to have. Only time will tell if the student debts will gradually dissipate in time for this population of potential property investors to pick up their socks and put their money where their (poorly fed) mouths are. Hopefully the amortization laws will also become less stringent to give some lee-way for the market to absorb this hiccup and further encourage/ease the next batch of buyers and sellers into the market.
image courtesy of limaoscarjuliet