Expert Predicts Real Estate BOOM
David Bates / February 20, 2012-8:34 pm
Ken Gronbach is a demographer, an occupation defined by his daughter as a person who counts and tracks people. Ken says “demographics precipitates economics” and according to this blogger he is simply saying: An increase in population leads to an increase in demand for goods and services. And vice-versa.
One important and predictable characteristic of demographics is age. As people age, they need and want different things, and that will effect the demand for those items. For instance, as Gen X produced fewer babies than the Baby Boom generation, maternity wards started closing. When this smaller generation became of school age, there were fewer children attending schools, so some schools had to close. Then the smaller generation aged a few more years and started driving fewer motor vehicles. As a result, Ken Gronbach’s motorcycle ad account went from a wheelie to a wipe out. That taught Ken the importance of understanding the age curve in predicting booms and busts.
I asked Ken, “What the age curve of the U.S. population says about the future of the real estate market?” Ken replied: “In under three years the housing market will be back.” Why? In the late 1970s the “Zero Population Growth” movement lost steam and Americans started having babies again. This continued so much so that in 2007 the U.S. set a new record for births in a year. As a result of the increased fertility, Gen Y is not only significantly larger than Gen X, but it is even larger than the “Baby Boom” generation. That, of course, means more demand for goods and services. So as this generation hits the peak home buying years, it will create increased demand for homes in Back Bay, Beacon Hill, Boston, the entire Commonwealth and across the country.
Another aspect of the current age of the U.S. population is that the population of persons 65 years of age and over will go from 35 million in 2000 to 55 million in 2020. Ken says retiring “(Baby) Boomers will flood into Florida” at a rate that cannot be fathomed and turn what is currently one of the toughest markets in the country from bust to boom.
To Learn more about Ken Gronbach and demographics check out Ken’s blog at http://kgcdirect.squarespace.com/ or any one of his several books, such as The Age Curve, at Amazon.com.