Housing Prices and Demographics...very interesting.

[LisaKinVA]

I read this... it's lengthy. It makes some compelling arguments for why the housing market (and in turn, the prospects for long-term economic growth & security).

 

Here it is...http://seekingalpha.com/article/252720-housing-prices-and-demographics

[OLG]

This is long but makes some excellent points with the strongest being "our children are our wealth" - literally as a society and for the economy. Thanks for posting the link!

[lmkzbcb]

That was an interesting read. Reminds me of a documentary I saw once "Demographic Winter". Excellent documentary. Link for it if you want to read the reviews. http://www.amazon.com/Demographic-Winter/dp/B001CGD1P2/ref=sr_1_1?ie=UTF8&s=dvd&qid=1298002356&sr=1-1

 

Hey, here is a link for a website you ladies might be interested in also. They have these short video clips that get straight to the point.

http://overpopulationisamyth.com/category/categories/pop101

[Bird Girl]

Well, if the housing bubble hadn't happened, those boomers wouldn't be convinced that they "deserve" a high price for their ordinary family homes. Funny how no one bothered to mention the affordability crises while prices were going up, and now the federal government is throwing all its weight behind keeping prices as high as possible. Not only can we not afford to buy a family-sized home, but our tax dollars have to go toward propping up the prices for others' homes.

 

Yeah, I guess I am a little bitter.

[Crimson Wife]

FWIW, I know a bunch of "childless by choice" couples who still purchase larger houses. They have the master bedroom, his home office, her home office, and a guestroom. Because they have 2 typically high incomes and lower expenses, they've got the disposable cash to purchase a big home.

 

I do agree with the author's suggestion of shifting the tax burden from families with children towards childless folks. But I don't think there is the political will to actually implement it.

Edited February 18, 2011 by Crimson Wife

[Trish]

Seeking Alpha is an excellent site for understanding some of the problems of the U.S. economy.

 

Also there is Zero Hedge, and the Automatic Earth.

[Margaret in GA]

As I was reading the article, I was amazed at how many families were single parent households. And I began to think about people I knew with kids who were divorced and honestly, everyone I know has remarried and owns their own home, which made me suspicious about the premise of the argument. Granted, I am a white middle class person so most of the people I know are the same. But, I looked up the statistics of single parents on the census bureau's website. Looks to me like the article is incorrect about the number of kids living with just one parent:

 

HOUSING PRICES AND DEMOGRAPHICS:

"Now, consider this fact: America’s population has risen from 200 million to 300 million since 1970, while the total number of two-parent families with children is the same today as it was when Richard Nixon took office, at 25 million."

CENSUS BRIEF ISSUED BY THE UNITED STATES DEPARTMENT OF COMMERCE:

In 1995, 48.3 million of the 70.3 million children under age 18 lived with two parents (69 percent); 18.9 million lived with only one parent (27 percent); and 3.0 million lived with neither parent (4 percent).

Margaret

[LisaKinVA]

HOUSING PRICES AND DEMOGRAPHICS:

"Now, consider this fact: America’s population has risen from 200 million to 300 million since 1970, while the total number of two-parent families with children is the same today as it was when Richard Nixon took office, at 25 million."

 

CENSUS BRIEF ISSUED BY THE UNITED STATES DEPARTMENT OF COMMERCE:

In 1995, 48.3 million of the 70.3 million children under age 18 lived with two parents (69 percent); 18.9 million lived with only one parent (27 percent); and 3.0 million lived with neither parent (4 percent).

 

Margaret

 

Actually, according to the Census, his statistics are spot-on (LINK HERE)

 

Your problem is that you are comparing apples to oranges:

Quote #1 refers to the total # of families.

Quote #2 refers to the total # of children living with two parents.

 

Both of these can be true at the same time, especially factoring in a birthrate of about 2.5

 

 

When looking at household numbers, found on page 7 of the Census findings report from 1995-2010 I linked abouve, it finds:

 

- 2 parent families (married couple with children) peaked at 24.8 million in 1997, and is expected to decline to just over 23 million by 2010.

 

- 1 parent families (parent, with children) are expected to increase from 8% to 9%

 

- the number of families with no children under 18 in the home was expected to increase from 36 million to 48 million by 2010. (this is an increase from just under 50% to about 60% of families)

[My3Boys]

FWIW, I know a bunch of "childless by choice" couples who still purchase larger houses. They have the master bedroom, his home office, her home office, and a guestroom. Because they have 2 typically high incomes and lower expenses, they've got the disposable cash to purchase a big home.

 

I do agree with the author's suggestion of shifting the tax burden from families with children towards childless folks. But I don't think there is the political will to actually implement it.

 

What about "empty nesters"? People who have sacrificed and endured the "lean" years while raising their children should be able to keep and enjoy the money they have saved and invested.

 

What about couples who were unable to have children but wanted them or lost their only child? Are they to be punished twice?

 

Keep in mind that childless couples have no adult children to care for them in their later years. They need to be able to put more money aside for their care.

 

 

This is just another redistribution of income ploy, IMHO. I guess I cannot comprehend this attitude that because life is not what you want it to be that someone else somehow owes it to you to fix it for you. Maybe we should stop envying what our neighbor has accomplished and turn our attentions to bettering our own lives.

Edited February 18, 2011 by My3Boys

[Kathleen in VA]

That was an interesting read. Reminds me of a documentary I saw once "Demographic Winter". Excellent documentary. Link for it if you want to read the reviews. http://www.amazon.com/Demographic-Winter/dp/B001CGD1P2/ref=sr_1_1?ie=UTF8&s=dvd&qid=1298002356&sr=1-1

 

Hey, here is a link for a website you ladies might be interested in also. They have these short video clips that get straight to the point.

http://overpopulationisamyth.com/category/categories/pop101

 

Thanks for posting these links. I just watched the overpopulation videos - very interesting. I am especially intrigued by the idea that everyone in the world could live on a land mass the size of Texas and have a house with a yard.

[prairiebird]

I have a hard time with this article because I think it's relative on where you live. There are an abundance of two income families in our area- families with kids- that still could not afford buying the larger homes in this area because salaries are so low. I know I could never afford to buy a house in the same neighborhood as my parents even though my husband is in the same line of work because the salary for that career did not keep up with home prices and taxes. We'll be hanging out in our starter home much longer than planned. I'm sure were not the only ones.

[Kathleen in VA]

I have a hard time with this article because I think it's relative on where you live. There are an abundance of two income families in our area- families with kids- that still could not afford buying the larger homes in this area because salaries are so low. I know I could never afford to buy a house in the same neighborhood as my parents even though my husband is in the same line of work because the salary for that career did not keep up with home prices and taxes. We'll be hanging out in our starter home much longer than planned. I'm sure were not the only ones.

 

When we bought this 3br/2ba rambler in 1990 we thought we'd live it in for about 5 years and trade up. Never happened. Housing prices are so out of reach now, this will be our reitirement home. Dh is planning to retire very soon, too. This area (Northern Virginia) is a nightmare in terms of housing costs. If we both hadn't grown up here and had lots of family in the area, we would never have lived here by choice. The town my grandparents and parents lived in (Falls Church City) doesn't have a house for sale for less than half a million dollars - insane!

[merry gardens]

I read this... it's lengthy. It makes some compelling arguments for why the housing market (and in turn, the prospects for long-term economic growth & security).

 

Here it is...http://seekingalpha.com/article/252720-housing-prices-and-demographics

Thanks for sharing that article. Very interesting.

[Margaret in GA]

Actually, according to the Census, his statistics are spot-on (LINK HERE)

 

Your problem is that you are comparing apples to oranges:

Quote #1 refers to the total # of families.

Quote #2 refers to the total # of children living with two parents.

 

Both of these can be true at the same time, especially factoring in a birthrate of about 2.5

 

 

When looking at household numbers, found on page 7 of the Census findings report from 1995-2010 I linked abouve, it finds:

 

- 2 parent families (married couple with children) peaked at 24.8 million in 1997, and is expected to decline to just over 23 million by 2010.

 

- 1 parent families (parent, with children) are expected to increase from 8% to 9%

 

- the number of families with no children under 18 in the home was expected to increase from 36 million to 48 million by 2010. (this is an increase from just under 50% to about 60% of families)

 

Aha. You are correct. In our area there are just so many empty, brand new, 3000 sft homes... hard to conceive how this was allowed to happen (why did the local banks lend so much money to developers without any solid reason?). I mean, who exactly did they think would buy them? Hoards of wealthy, large families emigrating from another country?? Insane.

 

Margaret

[regentrude]

FWIW, I know a bunch of "childless by choice" couples who still purchase larger houses. They have the master bedroom, his home office, her home office, and a guestroom. Because they have 2 typically high incomes and lower expenses, they've got the disposable cash to purchase a big home.

 

 

So what? They are still productive members of the society:

They work and create wealth.

With their incomes, they pay a lot more taxes than the one earner family. Considering that less than 50% of Americans even pay ANY income tax, there already IS a big shift of burden.

With the expectations from social security being ridiculously low, they probably save for their retirement since they have no kids who can take care of them in old age.

 

Why should they not be allowed to make this choice?

[Crimson Wife]

What about "empty nesters"? People who have sacrificed and endured the "lean" years while raising their children should be able to keep and enjoy the money they have saved and invested.

 

My parents and their friends have way more disposable income than we do on a similar income. They were never subject to the AMT like we are so they got all the normal tax breaks for having dependents that we do not. Back in 1995, when my siblings and I were still under 18, only 400,000 families were subject to the AMT. Today, that number is 4 million. And 83% of those subject to the AMT have incomes of <$200k.

 

What about couples who were unable to have children but wanted them or lost their only child? Are they to be punished twice?

 

Keep in mind that childless couples have no adult children to care for them in their later years. They need to be able to put more money aside for their care.

 

Childless individuals (whether by choice or by chance) are a drain on the system because of the way Social Security and Medicare are funded. It would be one thing if current benefits were paid by the taxes the individuals paid into the system over the years. But that's not how it works. Benefits are paid for by the taxes of the subsequent generations. Our generation is paying for the Social Security and Medicare costs of our parents' and grandparents' generations. Our benefits will be paid for by our children's and grandchildren's generations.

 

Back in 1950, there were 16 workers paying into the system for every retiree receiving benefits. Today, the ratio is 2:1 and by 2032, it's projected to be 1:1.

 

Those who do not bear children to pay into the system in the future should compensate by paying a higher tax rate. That would be bad news for all the luxury retailers and high-end restaurants who currently benefit from all the disposable income of singles and DINKS, but it would keep our entitlement system from bankrupting this country.

[Crimson Wife]

With their incomes, they pay a lot more taxes than the one earner family.

 

Married couples pay the same income tax whether they have one income or two. And singles actually pay LESS tax per because of the "marriage penalty". The 28% bracket starts at $83k for singles, but only $139k (rather than $166k) for married. The 33% bracket starts at $174k for singles, but only $212k (rather than $348k) for married. And the 35% bracket starts at the exact same amount for both single and married.

 

Talk about shifting the tax burden onto families...

[LisaKinVA]

Married couples pay the same income tax whether they have one income or two. And singles actually pay LESS tax per because of the "marriage penalty". The 28% bracket starts at $83k for singles, but only $139k (rather than $166k) for married. The 33% bracket starts at $174k for singles, but only $212k (rather than $348k) for married. And the 35% bracket starts at the exact same amount for both single and married.

 

Talk about shifting the tax burden onto families...

 

And, we haven't even gotten to the costs of raising children...just getting married.

 

The #1 reason I hear for parents NOT having more children (or why my DH and I should not have more children) is... because it's so expensive!

 

And it is. The tax code (with regard to the care, feeding and educating of children) has not been truly adjusted ever! I'm not talking about the tax credit (which was renewed for a couple of years). If the per-child tax exemption were adjusted for inflation it would be at least $8,000 per child (if it were equal to the personal deduction, so much the better).

 

My older brother with 12 children is also subject to the AMT.

[lmkzbcb]

I thought the article made another interesting point:

"America requires are highly skilled immigrants"

Dh and I have an on-going debate on the necessity of a 4 yr degree. My position is that there are enough people flipping burgers with a Bachelors, and not enough skilled technicians. A degree in Psychology doesnt get you very far. There has been such an emphasis on "getting your Bachelor's, so you can get a good job"; that the job market is flooded with these graduates.

In contrast, we have had our heat pump worked on 4 times now for the same problem, becuase of highly unskilled labor. If a person showed up at my door who was highly trained in heat pumps, I would pay them $100 an hour if they got the job done right the first time no matter how long it took them to do it. This is not the only area I find total incompetence, nor the only one I would be willing to pay a large amount to have it done right. The vocational/technical fields are wide open and money is to be made if you start a small business in those fields.

 

Here is an article for anyone to ponder, along the same lines:

 

http://finance.yahoo.com/tech-ticker/james-altucher%27s-8-alternatives-to-college-535903.html?tickers=COCO,APOL,ESI,DV,EDMC,STRA,%5eDJI

 

I know this doesnt have to do with housing prices, but it does have to do with the America's economic health.

Edited February 22, 2011 by lmkzbcb

[KidsHappen]

My parents and their friends have way more disposable income than we do on a similar income. They were never subject to the AMT like we are so they got all the normal tax breaks for having dependents that we do not. Back in 1995, when my siblings and I were still under 18, only 400,000 families were subject to the AMT. Today, that number is 4 million. And 83% of those subject to the AMT have incomes of <$200k.

 

Yes, we have been paying the ATM for about 10 years now, we only make about half that much, and we have been making the same amount for those ten years but every year our taxes have went up. Please notice that the five children I have listed all lived with me at the same time and yet I didn't get the same dependent deductions that my brother got with his five children and he is disabled and lives on SS.

 

 

Childless individuals (whether by choice or by chance) are a drain on the system because of the way Social Security and Medicare are funded. It would be one thing if current benefits were paid by the taxes the individuals paid into the system over the years. But that's not how it works. Benefits are paid for by the taxes of the subsequent generations. Our generation is paying for the Social Security and Medicare costs of our parents' and grandparents' generations. Our benefits will be paid for by our children's and grandchildren's generations.

 

Back in 1950, there were 16 workers paying into the system for every retiree receiving benefits. Today, the ratio is 2:1 and by 2032, it's projected to be 1:1.

 

 

By then I will have to be looking over my shoulder all the time to make sure the person supporting me doesn't find me and bump me off. :tongue_smilie: Makes me rather glad I had six kids. Maybe one of them will support me in my old age.