The Baby Boom Effect... Or lack Of.

Posted by Greg Smith on Thursday, February 11th, 2010 at 7:14am.

The Baby Boom Effect In Real Estate 

According to a study by Elliot F. Eisenberg "Among the nearly 2.4 million households that bought a home for the first time, the average age of the householder was 33 years old." Now real estate in Boulder, Colorado seems to be no different. But this is a very interesting stat to look at when we lay it up against the birth rate in United States:

1945

2,858,000

20.4

1950

3,632,000

24.1

19523

3,913,000

25.1

19533

3,965,000

25.1

19543

4,078,000

25.3

1955

4,104,000

25.0

19563

4,218,000

25.2

19573

4,308,000

25.3

19583

4,255,000

24.5

19593

4,295,000

24.3

19603

4,257,850

23.7

19613

4,268,326

23.3

19623

4,167,362

22.4

19633

4,098,020

21.7

19643

4,027,490

21.0

19653

3,760,358

19.4

19663

3,606,274

18.4

19674

3,520,959

17.8

19683

3,501,564

17.5

19693

3,600,206

17.8

19703

3,731,386

18.4

19713

3,555,970

17.2

1972

3,258,411

15.6

1973

3,136,965

14.9

1974

3,159,958

14.9

1975

3,144,198

14.8

1976

3,167,788

14.8

1977

3,326,632

15.4

1978

3,333,279

15.3

1979

3,494,398

15.9

1980

3,612,258

15.9

1982

3,680,537

15.9

1983

3,638,933

15.5

1984

3,669,141

15.5

1985

3,760,561

15.8

1986

3,731,000

15.5

1987

3,829,000

15.7

1988

3,913,000

15.9

1989

4,021,000

16.2

1990

4,179,000

16.7

1991

4,111,000

16.2

1992

4,084,000

16.0

1993

4,039,000

15.7

1994

3,979,000

15.3

1995

3,892,000

14.8

1996

3,899,000

14.7

1997

3,882,000

14.5

1998

3,941,553

14.6

1999

3,959,417

14.5

2000

4,058,814

14.7

2001

4,025,933

14.1

2002

4,021,726

13.9

2003

4,089,950

14.1

2004

4,112,052

14.0

2005

4,138,349

14.0

Based on the birthrate effect we should have experienced an increase demand in housing between 1987 and 1999. In Boulder, Colorado this is fairly accurate to what was experienced, and becomes much more accurate if we actually adjust the numbers 36 years instead of 33 to allow time for the late adopters. We humans tend to be a little bit slow to the party. Many like to refer to our adoption rate as the "Lilly Pad" effect. This would predict the Boulder real estate peak should have fallen between 1991 and 2003. Birth rates dropped from 1972 to 1976, and then we see a gradual climb to over 4,000,000 births in 1989. If we lay the same trending over the birth rates we would expect to see weak real estate sales in Boulder, CO and surrounding areas such as Louisville CO, Lafayette, CO and Superior, CO between 2008 and 2012. In 2013 sales should begin to climb gradually.

Birth rate is just one tool to give us insight into the future. If we really want a more accurate picture we need to consider the buying tendencies of the Y generation and other outside influences such government intervention into the natural economic cycle.

What the birth rate indicator tells me is I better start making some calls, posting on Facebook, and Tweeting up a storm, because it is time to pick up some great clients before the 2013 climb.

On a side note I heard a great joke the other day. It appears that a new tech wizard has developed a social media tool that combines all the power of YouTube with Twitter and Facebook combinded. It is called YouTwitFace. Pretty funny.

Greg Smith

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