1. Everyone knows this one. The big R. The ski jump. The precipice. Pick your cliché. A recession is on the way. That will mean that housing prices will be depressed a bit longer. My home town already has a glut of unsold houses on the market -- some in my own neighborhood. But everyone knows this story.
2. This little piece of bad news is not as well-known. Buckle your seat belts for a series of mortgage insurance and bond insurance bankruptcies. The big banks may be writing off some debt, but all of those mortgage insurance policies that brokers scared young marrieds into buying will now come due. And too many were sold. After all, in an ever-expanding economy who is going to lose a job, and, if they do, they can live off of their windfall equity in their big home that their parents could never have dreamed of owning. Those insurance bankruptcies should start hitting in the next two years -- just about the time that the recession is waning.
3. But this is the big one -- and the most disturbing. All of we boomers have risen to the top of the economic pyramid with our big houses and big cars. We are now ready to retire. The kids are gone. All is well. But those darn big houses are so -- BIG. We will want somewhere with less space to care for. Maybe a 1 bedroom or a 2 bedroom. The trend has already started, but it will be in full swing in the next 3 years. The effect will be that a lot of big, formerly-expensive homes will come on the market. And who will be there to buy them? Remember all of those new schools built for boomers -- that needed to be shut down because boomers were busy having careers rather than kids? The long-range forecast is that big houses will drop in price because there will be no market for them. Opportunities for some, reversals for others.
Adding all of that together, if I time matters well, I may be able to sell my house in about 18 months or so. That will give me time to retire within the next year and to rent somewhere in Mexico for 6 months before I make the final move.
On the other hand, I could just play it by ear and enjoy even these nippy nights.
As I write, the moon has broken through the cloud cover.