The “Echo” Boomer Generation
This was a great article from the Chronicle…It’s always nice to get a point of view from outside the Bay Area echo chamber, and last week it was wisecracking Wharton real estate Professor Peter Linneman who delivered the goods at a NAI BT Commercial industry breakfast in San Francisco.
Sprinkling his presentation with well-timed barbs about the Best Place on Earth — "Here, you call the Ten Commandments the Seven Interesting Suggestions and Three Wild-Ass Ideas" — Linneman told the real estate suits why he believes there is no national housing bubble and why commercial property is still undervalued, despite the run-up in prices.
According to Linneman’s analysis, the combined supply and demand effects of the housing market — low interest rates, rising incomes, population growth and modest home construction — is almost statistically equal to the rise in home prices, meaning that the market is not out of whack but in equilibrium.
Another factor, which Linneman called the "grandpa-and-grandma effect," refers to the transfer of wealth from the hard-working, self-sacrificing World War II-era generation to the coddled and overly programmed offspring of Boomers – the Echo Boomers.
The wealth transfer, whether it’s in the form of annual gifts or a huge down payment on a house or condo, is allowing a significant cohort of 20- and 30-somethings to glide right into the housing market, Linneman said.
"They love their grandchildren a lot more than they love their kids," Linneman said of the older generation.
Realtor, Marathon Man, "Man of a Thousand Voices".
