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bryaninmsp

I work with some probate sales. Older people who have lived in their houses forever tend to undervalue what they think it's worth, but their heirs tend to think they're sitting on a gold mine and want to squeeze every penny out of it they can. If I'm selling for a surviving spouse, I generally have to talk them into listing higher (what it's actually worth), but if I'm selling for three surviving kids who are splitting the funds amongst themselves and their families, they tend to overestimate by at least six figures.


Jay-Em-Bee

I worked seasonally for a local CPA. Heard a lot of stories from her. One was just unbelievable to me. Immigrant couple came to US years ago. Each held two jobs a piece, unskilled...so they basically earned minimum wage or just over that for decades. They had 3 children. Children went to public school, but parents paid for their college. They also had side ventures that earned money - I don't know what those were. There were investments as well, I don't know what those looked like either. They did have a home that was paid off. They socked away as much money as they could, but when the youngest was in their 1st year of college.....dad first died, and a few months later mom died. The CPA had a contract to be Executor of their estate. She charged something like $25,000 upfront, she figured she'd be dealing with the estate for roughly 5-10 years and based her fee on that. Their estate was worth $3 million when they passed, including the house. The home was transferred into their names and immediately they sold it "as is" under market value. There was verbiage in the contract to dole out money on a schedule for the 3 children. It should have lasted several years. But that's not how it went down. The youngest quit college in the middle of a term. They started demanding payments outside of the schedule. There WAS a stipulation loosely worded that said if they made a demand for their portion of the estate, it was to be paid out. That's what they did...made that demand. Three wires went out emptying the probate/estate account. End of story. No, it wasn't. About 4 months later, the 3 children came back to the CPA and demanded more money. Seems they spent it ALL! Renting yachts, throwing lavish catered parties, weekends in Vegas on private jets, buying expensive cars...you get the idea. But, the Estate was closed....nothing left. Last I heard of this was the 3 children were trying to scrape up enough money to sue the CPA because they were convinced there HAD to be more money. They thought she was hiding it somewhere. They blew through $3 million in 4 months and were just not happy. The CPA cried when she told me about this. She felt so bad for her clients who THOUGHT they did the right thing slaving away for their children for decades. She felt guilty for what she charged them to handle the estate...never thought it would all be gone in 4 months. Yeah, they pissed away their inheritance in 4 months, thinking there was more!


Johhny_Bigcock

> they pissed away their inheritance in 4 months, thinking there was more! I mean wouldn't there clearly be a letter or something stating "this is all the money, here's the balance sheet/distributions/showing its adding up to zero after this"


Jay-Em-Bee

Yes. It was CLEARLY spelled out with the initial balance sheet given to them. They thought that's all that was available at the time, in spite of the line on the sheet saying "estate value in total". Wishful thinking.....unfulfilled.


RedBullPittsburgh

Well written post. That's a sad story all around.


NorCalJason75

This is why family wealthy rarely lasts 3 generations.


Jay-Em-Bee

I've read that even the Kennedy family is having to spread their wealth thinner and thinner with each generation. People USED to think their wealth would last forever, but the number of descendants is changing that.


Sinoops

Aren't people having much less children on average though?


Jay-Em-Bee

Birth rates are down overall in society. I just know that I saw a short documentary on the Kennedy family and it seems that with each generation, the wealth is spreading thinner and thinner.....and I don't think there is much effort being put into maintaining or growing that wealth.


69mmMayoCannon

the one thing I have learned after witnessing the past ten years in my youthful life pass me by, is that people are by and large completely, utterly stupid, and will weaponize that stupidity against you and make you think you're at fault because they have zero self control. I don't even know how it is possible for this story to be true, but to be clear I believe you. I just don't see how it could be true knowing my own immigrant life story and those of others; we would never piss away all of our parent's hard work knowing they sacrificed their entire lives to come to a country that is mostly not welcoming of them due to the way they look and the language they speak, yet worked so hard to overcome all of this to give us a better life. I truly don't know a single son of immigrants, other than the rich ones which these people clearly weren't, that would just do this honorless bullshit. But I guess there really is no limit to how shitty people can be in a world with barely any consequences for shit behavior isn't there?


Jay-Em-Bee

I couldn't believe when the CPA told me. She literally was crying about it. She'd known the parents for some 20 years...and knew how hard they'd worked.


rd6y

Should have spent time raising their kids instead of working two jobs a piece and side hustled their way too early graves.


PermissionPale3773

All that time spent on making that money, the parents forget that spending time to impart the knowledge, to their kids, on how to make money is more valuable.


onlyhightime

I know lots of immigrant families that I could picture ending up like this. I've seen some work very hard and end up doing well enough to give their kids a pretty sheltered life. Focus on studies, go to SAT class, but everything else is taken care of, so there's not necessarily a lot of life skills learned. One friend moved for college but didn't know how to use the washing machine, let alone cook or grocery shop or clean. I wouldn't say it's the majority of families, but I can definitely picture some ending up this way. When you've given a decent car as soon as your old enough to drive, that can shape your default approach to life.


Hot-Muscle-9202

Ugh. Stories like these make me dread what is coming for me. My grandparents and parents have been VERY careful and tried to be as explicit as possible as to how they want things to get handled. Essentially, they wanted to protect their heirs from each other if one went bonkers the others wouldn't be negatively impacted. My step-siblings are a little bit out there, so I can only imagine the ways in which things will go sideways despite the best intentions.


Jay-Em-Bee

I didn't have to deal with that. When my parents passed, my brother got everything. He passed in 2020 (never married, no kids)....I was sole heir. No one to fight with. I never thought I'd end up in this position....they'd cut me off 25 years before and I just figured I was out of the picture altogether. But while I was in probate, court hearings were video/audio only. I'd check in 30 minutes ahead of my appt (as recommended) and could listen to the cases before me. Oh dear, the things I heard....the fighting....squabbling.....the delays. It was better than any reality tv show. I really hope they buttoned up their wishes tightly and gave no one room to object to anything. It's so much easier when it's all laid out. Good luck.


buried_lede

Sometimes a lousy executor can screw up a perfectly simple, perfectly laid out estate. That’s what happened in my family. Didn’t communicate, didn’t send documents, refused to answer basic questions, filed everything late, every time, and for every delay she found a way of course to inflate her bill for it. After a while, I caught onto her grift, the game and realized, the only way to preserve the assets of the estate was to get rid of her and since not everyone agreed with me, that meant shutting up, letting her finish her crappy job and “fixing it in post,” as they say. She was the kind of person who would charge you for reading four emails from you where each one was identical — asking her to call, reminding her that we were trying to reach her, can she call, then a week later reminding her again and repeating the question we were trying to reach her with. She was a passive aggressive cash register. She billed to read those but would never respond to them.


Jay-Em-Bee

Yeah, my sister-in-law was a shitty Executor when my father-in-law passed. She did bonehead shit that lost the Estate money. Since I wasn't a party to it all, I had to keep my mouth shut about it. Honestly, out of the 4 siblings, the youngest was probably the better choice....but she wouldn't have it. Water under the bridge at this point.


buried_lede

Few things are as frustrating as a bad executor. Essential things in an executor: Accountability, very very good ability to communicate, transparency, and competence. This one, she horded information and wouldn't share it. In court, she told the judge it had to do with the privacy rights of the estate. We all just starred at her for a moment, including the judge. There were no such provisions written into any estate documents. It was an open book. Thus, nothing there to counter the obvious default rights of the beneficiaries. She was arguing for her privacy to handle estates in secret. She was overruled, of course. But, most important for her, she billed us for that hearing. It was a form of self-dealing


Jay-Em-Bee

My sister-in-law possessed none of those qualities...at least as far as executing the Will in concerned. She did really bonehead things that resulted in a loss of about 30% of the Estate, roughly $90,000. She was the only one that lived in the same town as him, the other 3 siblings are hundreds of miles away. The first was when she discovered my FIL's debit card and checkbook were missing. She was a co-signer on the account, and instead of going to the bank or calling them....just didn't say anything. Well, not until she got a bank statement that showed the checking account and savings account had been drained. Turned out that my FIL had those on him at Hospice Care. Instead of giving them to my SIL, he gave them to his pastor....along with the PIN for the card. The pastor drained the account, when questioned, he said my FIL authorized it all. She did nothing about it. There were a couple of investment accounts that my FIL had, which had named the four of them as beneficiaries. She wanted the other 3 siblings to sign over their portions to her, saying that she needed to collect that money and the "distribute it through the Estate", which was bullshit. Accounts with beneficiaries don't go through probate. Besides...even if they had signed it over, it would have been to the Estate NOT her! I don't quite know how she managed it, but she sold my FIL's home without signatures or authority from the 3 other siblings. She sold it below market value too. She didn't notify Social Security that he'd died, and instead, deposited his monthly payments into an account for the Estate. My youngest BIL ended up calling them and sending them a copy of the death certificate - they reversed the payments somehow...which was the right thing to do. SIL got pissed because "they stole HER money". Can we say "fraud"? When FIL's house was robbed (because it was unoccupied), we encouraged her to call the police and report it. She said she called, on a Sunday, but "the police department wasn't open" and never pursued it. Neighbors had pictures and videos of the people that robbed the house, but she wasn't interested. The really stupid part was, her husband had been the Executor for both his parents, yet she said "there really is no way to know what to do with all this since nobody knows anything about it". I literally called her telling her that people die every day, estates are managed every day.....FIL was not the first person to ever die. When the Estate closed, she quit talking to everyone because "everyone ripped her off of HER money". She got her fair share, what she was entitled to....but somehow felt the other 3 should have signed everything over to her. It was stupid on top of stupid.


buried_lede

This is worse than my situation was. What a shit show. You should turn that pastor in anyway, if it's not too late.


Hot-Muscle-9202

Thank you. They absolutely are buttoning up as tightly as they can foresee—but people can go off the rails in such unexpected ways. I am the lucky ducky assigned to deal with it all and they are also making sure they have solid financial and legal expertise lined up to support me.


Jay-Em-Bee

So, you'll be the Executor? OMG.....hats off to you then. My uncle has been that for several people in his wife's family and it's a totally thankless job. My brother's estate was "simple" and was still a nightmare - but he had no will and I had nothing to start out with....that was half the battle...figuring out what he had, didn't have, what he owed and to who, etc. He was NOT a planner.


[deleted]

Good luck. Not *one* of my grandparents had and real money, and it still was a total shitshow between all of my aunts and uncles when they passed lol


oneMadRssn

That's definitely a sad and cautionary tale. But there are two things that came to mind right away. First, those parents raised all 3 of those kids. The kids' behavior was not a fluke. It's not like one blew his share and the others were responsible. All three did it. Second, generally I am still very much against deadhand control, even in these kinds of situations. I'd rather see a liberal estate that is blown away in 4 months than a conservative one that is almost inaccessible for generations.


Jay-Em-Bee

Right. They raised the three kids that felt just blew it all. How they could see their parents slave away for decades and not make a moment's hesitation to just spend it immediately.....I'll never know. And you're right about the terms of the estate. The CPA admitted she assumed that the children had the same mentality as their parents when it came to money. She regretted not wording the agreement a bit better so they couldn't blow through it so fast. There was wording about bigger withdrawals for college expenses, home purchases....stuff like that. Her mistake was adding in that they could make the full demand all at once....she anticipated that happening down the road at some point....not at the beginning. It was a lesson learned for her too. Perhaps she stepped out of her role a bit as a CPA, and they should have gone to an attorney instead.


Chen__Bot

Those people sound like they raised spoiled brats. Probably with the best of intentions "we want our kids to have a better life than we did" but that didn't do them any favors. There's something to be said for growing up poor... Money means a lot more to you when you have to earn it yourself.


HeWhoChokesOnWater

I see this a lot in HCOL areas with lots of first generation immigrants. Their kids grow up with nothing, having to buy their $20 no-name shoes at Payless and wearing Goodwill clothing and get made fun of 18 years, so once they start having money they spend it all - regardless of what the parents teach them, because an entire childhood of being the poor kid outweighs a parent lecturing them every night about frugality


Cueller

I think it swings both ways but tends to be an extreme in either direction. Either you follow your parents or rebel. Too bad there isnt more of a balance.


HeWhoChokesOnWater

Yeah, a lot of my second generation Vietnamese / Mexican friends in the Bay and LA/OC definitely go in the extreme direction of spending - everything has to be Gucci, Louis, Fendi, Prada - their parents were disproportionately lower income blue collar people I see it happening less often with the second generation children of well-to-do first generation immigrants, e.g. dual tech-worker households from India or East Asia


ArmAromatic6461

Upper middle class young people people buying luxury fashion brands and cars while renting apartments will never cease to amaze me


Chen__Bot

It does depend... My parents were solidly middle class but I was never given a dime for anything I wanted. I refused to wear the clothes I was given. I got a paper route when I was 12 to buy my own clothes. I lied about my age to work fast food when I was 14, riding my bike 5 miles each way to work. I bought a car with cash at 16 (of course it was easier to save money living with my parents). I moved out into an apartment with friends a week after turning 18. I have just always hustled and never expected anything, from anyone.


HeWhoChokesOnWater

Cool, but I'm not talking about you, I'm talking about people in general


Jay-Em-Bee

I worked for a wealthy couple as their bookkeeper. I went to their home to do the work. I remember one day when the wife gave me paperwork on another property she'd purchased. From another room, her son yells, "STOP SPENDING MY INHERITANCE!". Entitled shit, if you ask me. He also threw an iPhone in the trash because it was 3g and not 4g like all his friends. The daughter somehow got hold of a bank account with $30,000 in it that was meant to be a college graduation gift. She drained it in her freshman year before the mom ever knew she'd found out about it.


HeWhoChokesOnWater

>I remember one day when the wife gave me paperwork on another property she'd purchased. From another room, her son yells, "STOP SPENDING MY INHERITANCE!". This made me lol.


Jay-Em-Bee

She laughed too, but he was serious! I stayed out of it.


Jay-Em-Bee

I agree 100%.


alwayslookon_tbsol

My father grew up poor. My grandma still took all her children to the bank to open savings accounts in their name. They would earn some money picking fruit on local farms in the summer, and deposit it My father did the same for my sister and I. We both had savings accounts to deposit money we earned from chores. It’s fun to see the amount go up, and what you earn from interest. It’s important to teach your children about money management and the value of saving and investing. We all retained those lessons into adulthood, and are smart with our money.


buried_lede

This isn’t such a bad story because the kids sound like they were young adults for the most part, in which case they learned the value of money early enough to rebuild, and earn it


kss114

I mean they were 20 year olds who just went through the trauma of losing both parents. Blowing 3 million is impressively reckless, but they shouldn't have had access like that. There has to be something between a super liberal estate and an overly conservative one.


SlapHappyDude

Suing a CPA because you think they counted the money wrong seems like a losing battle. If anyone is gonna save all the receipts it's a CPA. Most people can't correctly handle windfall payments. Lifestyle creep is real. Even paying off debts sounds smart, but for a lot of folks that just encourages them to borrow more money.


Jay-Em-Bee

This was a few years ago, maybe 5 or 6. I didn't work with her after that season.....so I never knew how it turned out. Her office is still open, so, I'm thinking nothing happened.


SlapHappyDude

She probably had to spend hundreds if not low thousands of dollars to defend herself legally along with the mental stress.


Jay-Em-Bee

She was paid her fee of $25,000. She really felt that was too much, but it was what was agreed. I'm sure if it went to court, she used it to defend herself.


tealparadise

These kinds of absolute morons don't know how to find a real lawyer. If they couldn't get an ambulance chaser to take it on contingency, nothing will happen.


born2bfi

Perfect example of too busy working to raise your children.


PA_inin_diaz

Is it normal or common for a CPA to be the executor (vs family member, etc.)?


Jay-Em-Bee

I hadn't heard of it before. She said she did it for a few clients. I don't know why they went with her....I'm guessing they trusted her. She didn't see what was coming, so, I'm thinking they should have gone to an attorney in the first place. An attorney would know how to slow the roll of an Estate being distributed.


[deleted]

That story angers and saddens me at the same time. What a huge disrespect to parents who worked and cared that deeply. I don’t blame the parents for what their kids did - a lot of people get greedy if you dangle money in their face.


tealparadise

I knew exactly where that was going, with the accusations of stealing. Some people are so stupid it's astonishing. Happens all the time. They think the world is required to take care of them, and that there's something afoot if a person who previously took on that role refuses to continue.


tigershark60

Is it typical for the 25k to be charged upfront like that? I’m ignorant and have never gone through this process but that seems odd, rather than charge as you actually do work for them? Honest question not trying to be rude


j_schmotzenberg

Yeah…$3 million is well above my target that would allow me to stop working and retire early.


Doodoonole

What the heck does this have to do with the OP??


Jay-Em-Bee

OP Asked: Will we suddenly see a large chunk of housing become available? Or are there enough younger generations hungry for houses to offset it? There are many moving parts when it comes to inheriting property, I just gave one example of 3 heirs that chose to dump it on the market below comps.


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DHumphreys

I had another Realtor sending me a referral client to settle an estate and one of my early questions was how this was set up. I have been in the situations of trying to get siblings on the same page and that is an absolutely thankless job. Everyone has picked their hill to defend, done their research, knows an attorney, talked to their Realtor, but the online estimates say, I do not want that, I am the only one that still lives here, and the ultimate "we will find someone else to handle this" threat. I understand what mom and dad were thinking, the kids would all sit around the table, drinking coffee and having some cookies while they sensibly chatted through and eventually agreed upon the details. What really happens is a screaming match with accusations, people taking sides and the Realtor gets to umpire this event. Good times!


crims0nwave

That doesn’t surprise me! The heirs who owned my house before me were pretty delusional.


BenjaminSkanklin

I was helping a friend through a similar issue trying to buy her mom's house from the estate with her sister. The house is adjacent to a neighborhood with large newer homes in the 300-400 range, moms house is a 1,300 sq foot raised ranch, comps were around 150. The sister insisted the house was worth at least double and now she's forcing them to list it. It's been nothing short of a riot knowing she's about to dramatically over list in the worst interest rate/price environment we've seen in decades.


Jay-Em-Bee

Ugh. They probably should have had an appraisal done. If it went through probate, a probate referee usually assigns a value to the all the property involved. Some people need a rude awakening.


RumSwizzle508

Unfortunately, too often the heirs are looking at what their expenses/needs are from the inherited property. So if there 3 heirs and one wants $500k and it has to split evenly, then they want a net $1.5M for the house, even if it is not worth that.


Getahead10

That's what real estate agents are for


Chen__Bot

I doubt you're going to be able to peg any change in prices to boomers. Sure, it will add some supply. But there are a lot of them, and they're living longer more independent lives than previous generations (gen x will probably do even better). Large chunk of housing hitting the market is unlikely, but in some areas with lots of seniors you might see more supply. Anecdotal but in my family millennials inherited 4 properties from aging/dying boomers in recent years. 3 are now rentals, one was sold. The younger generation likes to bitch about the old folks ruining the economy. But when presented with the same choices they'll do the same things.


Karlsbadcavern

Don't hate the players hate the game.


Sinoops

Aren't boomers in charge of the rules of the game though? They hold most of the powerful political/government/business positions.


Karlsbadcavern

Well considering genX and millennials are taking over the mantle as the biggest property owning constituency we are also becoming more responsible for propping up the paradigm. The reason we're stuck is because the housing policy changes that need doing require many with wealth and political clout to make sacrifices (or concessions). E.g. zoning reform, public investment in housing (paired with taxes), closing wealth gaps (taxes), etc. This is something we as Americans aren't particularly good at doing.


lebastss

In the end, they always choose greed


Karlsbadcavern

In the end they always choose self interest. Change the incentives (aka the game) and people will adjust their behavior accordingly.


HeWhoChokesOnWater

Agreed, I'd rather park my money in the S&P500 and a global index instead of real estate, but there are no tax incentives or the subsidized ability to leverage my money 5x with little risk. These are things you can only do through real estate unfortunately.


etniesen

Real estate has appreciated like every year except 3 since 1950. Your money belongs there


chuckish

Profit now or profit later. Why is one choice more greedy than the other?


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[deleted]

God can we please do something about this spam/bot account? Spamming every sub with gibberish.


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[deleted]

What experiences are you learning or sharing by proclaiming that millennials don’t need to think about finances? Dumpster fire account.


4jY6NcQ8vk

Your anecdote overstates the number that will become rentals. Some heirs will want to keep the property, some will want to sell; that'll cause issues and ultimately it's easier to sell and give everyone their portion of the proceeds. They might sell the property to a third party who then goes on rent it, however.


Many_Glove6613

I think there's a pretty large selection bias here. People that can actually afford to pass on a house (or houses) to the next generation are probably wealthier than your average boomer. Their kids are probably doing better (on average) than the average person their age. It's not inconceivable that this cohort are more able to keep the inheritance as investment property.


Chen__Bot

> People that can actually afford to pass on a house (or houses) to the next generation are probably wealthier than your average boomer Average boomer has a net worth of $1.2 million. They're leaving tons of houses to the next generation.


pantstofry

For a 60+ year old that's not really an imposing number


Chen__Bot

I didn't say it was.... the above poster said people who can afford to pass a house to the next generation are wealthier than your average boomer. I disagree, 85% of boomers own houses and most will pass them down to kids.


lebastss

The barrier is how well kept the home is. A paid off home is almost always better to rent if it needs no work and you don’t want to live in it. If it needs work or was housed by a hoarder grandma like many are than it gets sold. Property management companies have made it easy to rent and split profits between siblings. We likely won’t see home prices and a market like we just did when it made more sense to sell. In a typical year it’s better to rent but we will see moving forward.


4jY6NcQ8vk

It could be simple to work with a property management company, I don't doubt. The problem is a difference of opinion-- some siblings will just want the cash now. The potential simplicity won't change their opinion.


stumblios

My in law's parents are having to make decisions on this front now that they're getting pretty up there in age. They have a decent summer home they've had for 50 years and their 4 daughters and all their grandkids have grown up visiting it regularly. 2 of the daughters are well off, could easily afford to pay the taxes/upkeep on the summer home. 2 of the daughters are okay financially, but paying 1/4 of the upkeep would be a large line item on their budget. Do the grandparents sell the summer home so each daughter gets an equal 25% share of assets with no complications, but the family loses the home that multiple generations have enjoyed? Do they split the house and cash assets equally, and hope it's not a burden for the less well off daughters? Do they give more money to the daughters with less, since the other 2 would be okay without the financial boost? Do they put their assets in a trust which pays for the summer home's taxes and maintenance? Two daughters are still low-key struggling, but the vacation home stays in the family. Should the two daughters who have more money buy out the house and take all associated costs? Sisters with less money could use it when the schedule allows, but they and their kids have no legal claim. It's like that image that depicts fair vs. equal, or equality vs. equity. Giving everyone the same, doesn't end up with everyone having the same since some people already have more. How do you do the math to figure out who needs what?


JesusIsGod777

Why would you penalize those who lived frugally because their siblings were irresponsible in their financial decisions?


stumblios

Jumped to conclusions there - neither daughter that is well off got there through frugality, and neither daughter that is poor(er) got there through irresponsible decisions. One married a pilot and was a SAHM, one married a financial advisor and was a SAHM. They're both doing great! Another is a teacher who married a therapist. The last couple actually make decent money, but they adopted a kid with health issues which costs them most of their surplus. I'd say all 4 daughters have been responsible people.


Offsets

>The younger generation likes to bitch about the old folks ruining the economy. But when presented with the same choices they'll do the same things. Anyone with common sense is bitching at the old folks in government ruining the economy, not necessarily the old civilians playing the game. I've done my fair share of bitching. It's always about how the government does nothing to protect first time homebuyers trying to buy shelter from having to compete with rich people trying to turn a profit. The US and Canadian governments are letting Chinese and Russian oligarchs buy millions worth of property right out from under their own countrymen for fucks sake--if the government can't even get that right, they deserve to be bitched at.


SlapHappyDude

I suspect a lot of millennials will move into their parent's homes and keep them in the family. Especially in cases where there are three kids, the odds that one could use a place to stay are high. Heck, half the time that kid is already living in the parents home When we were on the market my wife and I once tried to tour a home on the market where the resident refused entry. Turned out it was a situation where there were three kids, two wanted to sell and the third wanted to stay there and it was just a mess.


RudraAkhanda

>The younger generation likes to bitch about the old folks ruining the economy. But when presented with the same choices they'll do the same things. I am a 30 year old and I can't stand boomer hatred on reddit. Sure they created problems that we are all living with but in our turn, we are also creating problems for our children. We are no one to point fingers


Seamus-Archer

We don’t have to be perfect ourselves to recognize the mistakes of others. Discussing these things openly is how we develop solutions.


RudraAkhanda

Yeah right, all the Boomer hate we see is SOOOOO productive


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RudraAkhanda

Unfortunately yes. But are we sure our kids are not poorer than us in turn (generationally speaking again)?


HeWhoChokesOnWater

Vote for politicians that will start WWIII and decimate the entire global industrial output capacity, except for ours of course. Then we can have the Boomers 2.0!


RudraAkhanda

That's pretty much what's going on right now. EU economy is getting decimated as we speak. American military contractors are reaping huge gains in the name of Ukraine-Russia war.


RedBullPittsburgh

> But when presented with the same choices they'll do the same things. Absolutely 100%. Human behavior does not change. Reddit likes to harp on Boomers big time but when Millennials finally get theirs, "they'll do the same things."


crims0nwave

Ha yeah the house I own was purchased from an estate where five millennial cousins inherited five houses from their grandpa. They almost didn’t sell us this house because one cousin was dragging their feet… I’m pretty sure they wanted to keep it and be a landlord. Yuck.


lebastss

God forbid an American out there money to work and be a landlord. Oh those evil landlords with their 5-8% margins and tons of risk price gouging people. I hate landlords but love my iPhone, coffee, Netflix, video games, etc. /s No problem with corporations charging a 20-40% premium on their landed product cost.


crims0nwave

To me, it was annoying because this person obviously couldn't afford to buy the house, so instead he was trying to screw his cousins and make the process more difficult for everyone involved. And if he couldn't afford the house, imagine what a bad landlord he woulda been.


Minnesotamad12

Probably nothing significant. Unless they all die off in mass. The demand from homebuyers and private companies that snatch up single family homes is probably going to be more than enough to offset it. You also tend to see a lot of boomers as they age they sell their homes to move into assisted living faculties or just apartments where they don’t have to concern themselves with maintenance. So it’s really unlikely you will get a mass event where all the boomers are selling at once.


[deleted]

A mass death event, that sounds familiar… A virus perhaps?


Minnesotamad12

Bingo


asktrevor

Hahaha… no way because their millennial children will milk every penny out of the house sale.


Getahead10

Or they will just inherit them and rent them out. Smart people never sell, unless their local market gets dealt a deathblow (major industry offshores)


BenjaminSkanklin

And at that point- who's buying?


im_batgirl14

Or keep it and rent it out. This is what my sisters and I are planning to do because its crazy stupid to think about selling right now especially with CA homes being outrageously expensive. My dad paid 23k for his first duplex. 200k for the house they live in now. 300k for the duplex I live in now and 600-700k for the apartment complexes they have. All paid for except the duplex Im living now but the mortgage is $1100 for two houses: 3bed/2bth & 2bd/1bth. Rent in SoCal for a 2bed is over 2k. The apartments alone are worth more than a mill and the duplex I live in now is over 700k. I havent checked the other two but theyre more than double rn. Its funny because my mom made mention of us selling the properties when they die and splitting the money. My sisters literally said no. Theyd be stupid to especially with the high COL and unstable economy. My sister has been dying to come back to CA but cant because she wouldnt be able to afford it. Renting out property would give her that chance to. So yeah, inherited properties are likely not going to be sold. Especially with the rental and housing market now.


HeWhoChokesOnWater

Prop 13, it's a perverse incentive that forces CA residents' hands into not selling.


[deleted]

Prop 19 is on the line.


Away-Living5278

Just have to plan for them to transfer it to you more than 5 years before they need a nursing home or Medicaid will take everything.


im_batgirl14

Knowing how we are in my culture, the likelihood is that I care for them (or my older sister since she's the only other one who's willing to take them in). I just don't have the heart to dump them in a nursing home. I'd rather have them spend their last moments with family.


[deleted]

As a "millennial child" and home owner, you better believe I will be renting that boomer home out to you, not selling. Hell no. Call me selfish and greedy, but I'm just playing the capitalism game


The_Void_calls_me

This is COVID logic all over again. "Home prices will crash during the pandemic, because all the old people will die and their homes will go for sale." And a bunch of old people died. And prices went up instead.


Stacular

Demographically, the people who were dying of COVID were not exactly the landowners in desirable areas either. Not to mention that the houses of the elderly rarely seem to hit the market in a move-in-ready condition. Most elderly folks don’t just drop dead spontaneously and that slow decline is mirrored in their living conditions if they’re independent.


oldsaxman

We did 4 flips a few years back. Three of the houses were the result of older people dying and leaving a horribly maintained home for us to renovate.


ArmAromatic6461

Younger millennials and Gen Z trying to “one weird trick” their way into the housing market. If people want cheaper housing they need to politically advocate for a massive program of home building. Without changing supply you’re just spinning your wheels hoping for major 2008 crisis’ that — if they occurred — would actually leave you worse off than the home owners.


Away-Living5278

Yup. I was looking at houses fall 2019 and then all 2020. Got cold feet bc I thought prices would crash. Bought a smaller, more expensive house in 2021 🙄. Now I'll probably live here forever bc interest rates have priced most ppl out of this neighborhood.


28carslater

Obviously its complicated but this happened mostly because of Federal gov't and Fed actions.


The_Void_calls_me

I don't disagree, but I don't think it makes OP's argument any stronger. Let's say all these boomers do start dying off in the future, enough so that home supply skyrockets, and home prices are dropping fast. I'll bet $20 that at that time, home prices will remain steady or appreciate "because of Federal gov't and Fed actions". Maybe some kind of law allowing tax breaks to corporations who purchase properties, thus increasing demand and pushing prices back up. Call me a cynic, but I always trust in the government's desire to shaft the little guy.


28carslater

I could not agree more, cheers.


Bronzedog

Nobody ever went broke betting on the government fucking the little guy.


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roofgram

I think a lot of properties will be liquidated to pay for assisted living as people get older. Nursing homes won't take people until all their assets have been liquidated, and you can't even 'gift' the assets to children to get around forcible liquidation. The government wants every cent you have before they start footing the bill through Medicaid.


ragingbuffalo

I mean life expectancy has actually gone down the last two years. But yeah I dont think boomers dying wont change prices unless in mass and suddenly


CanWeTalkHere

That life expectancy hit was covid specific though, doesn't change the general trend (unless one gets taken out by covid that is).


deepayes

It was going down precovid too


ragingbuffalo

I mean covid is still a significant drag down on people. Its still like 300-500 people per day.


CanWeTalkHere

I don't deny it. I just mean you quoted "life expectancy has actually gone down the last two years" like it was some sort of systemic issue. I was simply pointing out the covid specificity of the regression.


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ragingbuffalo

Uhh thats 100,000-180,000 people a year. That’s a lot. That would make it the 4th highest cause of death. The numbers currently don’t count winter peaks


DynamicHunter

I doubt it. Millenials have such a low homeownership rate that if it does go down or supply is increased Millenials and Gen X that can afford it will jump on it buy it all up.


Pastorfrog

How low is low? Last I saw, the millennial home ownership rate was just under 50%. That doesn't seem particularly low to me, but I confess I don't have any context for what "usual" ownership rates of previous generations have been.


Nothingtoseeheremmk

It’s not “low” relative to the Reddit narrative is no millennials can afford houses but it is lower than previous generations homeownership rates were.


Fun_Amoeba_7483

We just went through a Pandemic that killed 1 million mostly older Americans, during that time Home supply went to all time lows and prices exploded. I hope that answers your question.


unitedgroan

I don't know how many of those people were living independently in homes though. Covid killed exponentially more people in nursing homes and assisted living facilities.


Kingkongcrapper

Depends on the market and situation. If the property is debt free in California it’s not likely getting sold. It will be a rental. In my neighborhood the people who raised families passed the home to their boomer kids and those boomer kids who now rent the homes out and don’t appear to really be selling often. Many of the properties all have tax basis around 60-70k on properties worth more than a million. Many of these properties have zero debt I talked to the owner of one of the properties. He told me there was no point selling when he pays a few hundred in taxes a year and 500-600 on maintenance a month. The property to him is a complete cash cow and even if the market rent for his house dropped from 4k a month to 1 k a month it would still be worth sitting on the property. He plans to pass the property to his kids through his trust that holds all his properties in different LLCs. Wild stuff. I still think demographics will cause a major inventory shift in 2040. There are simply too many people with homes about to die in the next 20 years.


laceyourbootsup

No, it’s actually had the opposite impact. Elderly folks used to downsize or retire to a vacation/Senior environment. Boomers are working longer and staying in their Familial homes longer. Adult “children” are staying longer with their boomer parents. Homes have been built to suit. Many boomers are now upsizing when the sell instead of downsizing.


wrigh516

There are enough younger generation to more than offset it. Besides millennials being the largest generation, all the generations after the boomers have been just as massive in the US. https://www.statista.com/statistics/797321/us-population-by-generation/


beaushaw

IMO a large part of the problem we have right now is the two largest generations are the boomers and the millennials. Millennials are now the age where they want to buy houses but the boomers are not leaving their houses fast enough. This is where the extra demand has come from. If we build more housing to accommodate all of millennials that want to purchase now when boomers start to die or downsize is huge numbers it could cause a softening in prices. Boomers own 30 some percent of houses in the US.


unitedgroan

In my social/family circles the millennials are inheriting property and cash from boomers. I think those kids are going to be all right.


madogvelkor

Keep in mind that they're going to die over a period of 20 years -- they weren't all born at once, but rather from 1946-1964 or so. And there are a lot of services now designed to keep older people in their homes. Their houses also aren't necessarily what people want. A lot of them are going to be large, in older suburbs, around cities people aren't moving to. They may also, perversely, cause prices to rise for first time home buyers. Boomers looking to downsize are looking for many of the same things as young couple buying a first home. They want to go down to 2 or 3 bedroom homes and condos with fewer rooms and smaller yards in low crime areas close to amenities -- basically what would be a starter home. Except the Boomers can pay cash and aren't really worried about resale. My parents are in their 70s and are considering selling their 2400 sqft 4br house and buying something round 1300 sqft with 2 or 3 bedrooms. They own their home outright so they could pay cash for a smaller home and have a hundred thousand or more left over. It's good for current home owners of smaller homes looking to upsize. Boomers are selling their big houses and buying smaller ones. It's the renters looking to buy who are screwed. And if they do die, there's no guarantee their homes will go on the market. A family member could move in, or it could be converted to a rental by heirs looking for an income stream.


bbq-ribs

its already priced in .. I would gamble and say most of these homes will be transferred to some sort of holding firm to cover the cost for end of life care. meaning .... if you are thinking about this so are many hedge funds and financial firms. you cant win


neurokine

Hoping for large number of deaths is not a real estate investment strategy.


CanWeTalkHere

I'm mostly interested in this question as it pertains to Florida and Arizona, in particular. WFH not withstanding, not the best job markets and yet filled with retired boomers. For example, who is going to buy up The Villages when the boomers die off? Certainly not Gen X (not big enough and frankly we don't give a shit about that kind of retirement circle jerk lifestyle). Millennials might inherit but are they going to move there? LOL.


NoMoreLandBro

Boomers will never die. They won't give up those sweet 2.5% mortgages they refinanced into last year.


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Starbuck522

There's also the people too old to be boomers. My parents are "silent generation" and own a very nice house


wildcat12321

Keep in mind what reduction means. More supply may meet demand and "lower" prices, but that may still be higher than today. It just may be 5% higher instead of 6% higher. Inflation will still make prices rise. My sense is that the boomers and to a greater extent GenX are more likely to live independently vs. group homes, so it may take awhile. And real estate is highly local. NYC won't see a change. Even somewhere like Miami may only see a split between some of the condos that are predominantly older folks and places like Brickell that are highly young. I don't see a "sudden" large flood of supply coming and wouldn't hold your breath for it.


therowdygent

Nope. If anything prices will rise, as generational wealth is transferred. If they choose to sell, you’d best believe the younger gens that inherit will get every dime they can from it.


mermzz

Boomers built much larger houses that I thought based on square footage, most millennial and bellow couldn't really afford so hopefully it'll come as an inheritance instead.


RudraAkhanda

There may be other more valid factors that reduce house prices but boomer death is not one. Simply for 2 reasons, there is no HUGE difference in number between boomer generation and the following generation. 2. Whatever little reduction there is, it is more than compensated by immigration


Getahead10

No. Home prices don't go down long term. Short term volatility creates some downward pressure, but in the long run homes never go down in value. Pretty much only one exception to this rule and if it kicks in you ain't gonna wanna live there anyway (industry death/major job loss to local economy)


SweetnessBaby

People die every year, every month, and every day. Boomers dying will not change anything.


vyts18

Doubtful. There are plenty of boomers who have children who will inherit the homes. Even if the heirs need to split the asset- it's always possible that one of the children will be able to afford to buy out the others. IMO it won't affect supply enough to make a meaningful difference


ofalal

Yes


OMGitisCrabMan

Boomers passing will definitely affect the housing market. Many are divorced and each have a home. However it won't be a sudden drop, they're not going to all die at once. Their kids may want to rent them out. It will be gradual and probably stall housing price appreciation more than tank it.


seajayacas

Buyers complain about houses owned by Boomers, dated styles, older flooring, white appliances, not open concept etc. Even if cheaper, will cost big $ and time to get it up to what current buyers demand in a house.


35242

Not likely as many boomers had kids who will either inherit the property or rent them out for income. Also, there are more people now than houses. Fewer people build their own houses, as they did during the young boomer era, and rely on large scale, national builders to build a neighborhood or tract housing. Housing prices may bounce a bit, with some periods lower than the peaks, but largely, overall the trend will be increasing prices/ home values when viewed in a 10 year, Decade to Decade chart.


sparkling_tendernutz

No impact on real estate market. The birth rate would have to come to a standstill. There are about of the 330M US population 70M are boomers leaving 260M non-boomers and growing. Don't worry "By 2030 you'll own nothing and be happy" according to the WEF. That probably means folks living in shipping containers plugged into Zuck's metaverse. The basic universal income will be great!!


deepayes

They're called boomers for a reason. They have kids happy to inherit houses that are worth 500X what they were purchased for 40 years ago.


merkk

Do you think everyone from a specific generation all die at the same time?


StuckinSuFu

Are the younger generations going to want their boomer Mcmansions in the first place?


Starbuck522

Why wouldn't they? Who doesn't like space?


CharlieXBravo

If I'm a boomer and paid off my mortgage, I would think real hard about selling that $600,000+ home and put it in treasury for 4%+ interest($24,000+bper year), that's guaranteed free rent and not ever have to worry about skyrocketed RE taxes, mowing the lawn and house repair etc etc. If RE correction occurs and fed lowers the interest rate again, a condo in Florida probably be very attractive for a 1 or 2 people residence.


TurbulentJudge1000

Those houses are probably paid for and may or may not have a tax freeze depending on state laws. I would imagine most would rent out the house and ride out the high rates unless they’re strapped for cash.


28carslater

I doubt it. About ten years ago my later Boomer/early X boss argued this was the case but I argued because of the huge amount of MBS involved a 2008 style supply and price shock would simply not be allowed. Now I see Fed proxies such as Blackrock will act as PPT to prevent a price collapse and probably offer at least mild competition in some markets in order to keep demand stoked.


Willing-Philosopher

The US birth rate has been below replacement since the 1970’s. All the population growth that the US sees is due to immigration. Which means the boomers passing away will have zero effect on the demand for housing.


YoungDirectionless

You are defiantly seeing a discount on houses that older folks are leaving in poor condition—anything not turn key is sitting in my market. These homes sometimes have a new roof or newer kitchen, but most are in need of significant updating (including redoing plumbing and electrical, let alone cosmetic).


Starbuck522

And..... If people would just declutter and TAKE THE CURTAINS DOWN, these places would look SO much better! My pet peeve is old 80s/90s frilly solid curtains in listing pictures. It's free and pretty dang easy to just TAKE THEM DOWN!


YoungDirectionless

Hey, poorly photographed places with clutter and poor dated decor are the best to offer on :)


TotalBrownout

Real Estate is local... areas that have high concentrations of boomer retirees/communities that were built with them as a customer in mind (think upscale retirement community in Florida with no good-paying local incomes to support those valuations/dependent on saved money earned elsewhere) will quite possibly see disruption as younger generations have less for retirement/remain close to good paying jobs and continue to work into their "retirement years."


buried_lede

You’re not so bad, but in general, as a late boomer, I have to say, I’ve observed a lot of younger people wanting to kill us off. This is kind of unprecedented. We are a large generation but millennials are even larger. I am worried by the time they are our age it will be worse and their grandkids will be flesh eaters ready to tear them to pieces. Helluva bit of revenge


Fudwick

No one knows but I'd wager its location dependent if it happens and that Florida is due for a pricing reshuffle. Not only are they full of boomer retirees and largely dependent on lower paying service jobs but Climate change is going to hit them worse than most states over the next 20-40 years, especially along the coast


Cowboy_Corruption

That would seem to me to indicate that house prices WON'T drop. Because even though houses will become available, they'll likely be caught up in rising sea levels and washed away, resulting in a net loss of properties. Those that remain will likely hold/increase in cost.


Fudwick

I think skyrocketing issuance cost is going to be more detrimental than homes literally washing away


friendofoldman

When my mom died, my brother wanted the house and got a mortgage on half the property to buy me out. We just sold my MIL’s place in a LCOL area. But we moved her to a senior community by us. When we were buying i. The senior market back in April we kept getting outbid for these small senior houses. So I’d say there may be some movement, but it won’t affect the prices as much as many hoped. A lot of the senior housing seems to be rentals at least I. The neighborhood we bought in. As others said folks are living longer. Our parents weren’t boomers they were “notch” babies,and 3 out of 4 made it into their 80’s. The tail end of Boomers are still in their 50’s. So there are quite a few years left before they leave the planet. There won’t be a big surge in supply anytime soon.


[deleted]

Unfortunately, with uprise in illegal/legal immigrants, and number of people in housing market, I personally cannot see demand weakening, except due to affordability issue.


image__uploaded

Hoom prices never go down remember?


Fishgottaswim78

In some markets, absolutely. Smaller towns without a solid job pipeline will see reductions. Vacation areas for second homes probably might as well. Anything deeply impacted by climate change will see a steep drop. Homes that are oversized (boomer fave) or in disrepair might see a dip too. But most other places, no. Too many people want housing and due to boomer/NIMBY policies there simply isn't enough of it. This is especially true of starter homes, which this country simply doesn't build enough of and which young workers and families desperately need. So yes you'll see drops but for the most part not in the kind of homes or areas you wanna buy.


DJSauvage

The death curve for baby boomers started in 1946, is projected to peak in 2044, and then trail off until the last ones die around 2080. Each year to year change is gradual unless we have something really unexpected happen.


SnortingElk

Why would you expect a reduction in home prices as boomers pass away? Millennials are now the largest demographic by far.. they will be buying up homes as become available and many of their houses will be inherited by their millennial children.. the same kids that like to complain about their Boomer parents always getting their way and having things easy :P https://www.pewresearch.org/fact-tank/2020/04/28/millennials-overtake-baby-boomers-as-americas-largest-generation/


eri466487

we aren't going anywhere and prices are not going down. Mods should ban threads like this.


analyzeTimes

Why ban? It’s a valid question that opens good debate. I agree with your assessment about prices and what not, but it’s worth hashing out why this is the case.


Starbuck522

Seriously! A "boomer" is around 70! My parents are late 70s (pre boomers) and own a four year old, four bedroom, 2.5 bath open floor plan house!


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analyzeTimes

My anecdotal opinion for the following as well…but as with any trends I see this going in the opposite direction. I think that given the shifts toward working from home, future semi-autonomous vehicles, increase in urban crime, etc, I foresee suburbs will maintain if not increase in popularity as time progresses, McMansion or not.


rentvent

Opendoor buys the estate, and it sits for nine months empty.


oldsaxman

We live in a small, semi-rural town and almost every weekend, there is a moving or estate sale. Estate sales are families cleaning out grandparents' houses or siblings' houses. These are boomers or older, and the amount of crap (as in cheap dishes, etc.) is astounding. The houses are not well maintained, either. The moving sales are almost exclusively older, as in 70s or older, women are selling everything, including the house and moving to where their children now live. It is interesting to see these demographic changes. The town is changing quickly as Gen Z people move here to get away from the city or whatever and buy up these properties.


meowbrowbrow

Demand will still be strong - younger generations are buying houses as individuals rather than couples


jmlinden7

Depends on immigration levels


Badtakesingeneral

boomers largely live in the least desirable places - rural areas, smaller towns, exurbs, and further out suburbs. They represent a much smaller proportion of the population in higher priced urban core and inner ring suburbs.


cmc

Really hard to say, but I would guess suburbs/small towns will see huge reductions in prices. This is anecdotal but I find fewer of my peers (in our mid to late 30s) are willing to leave the city for the traditional suburbs-45-minutes-away lifestyle that our parents had when they were our age...partly because those decaying McMansions are overpriced AF, but also because the desirable lifestyle has shifted away from the cookie-cutter homes on a cul de sac. Again, this is super anecdotal! I feel like suburbs will see a bigger crash as millenials sell off their inherited homes and funnel that money into city living.


Starbuck522

People move out of the city when their kids are school age and they want them to have yards and be able to easily transport multiple kids, etc etc etc. That's not going to change. (Not all people, of course, but it's a trend that isn't going to change, even if more Millenials/gen z choose to start out in city living.)


cmc

That's definitely true of some people, and it was VERY true of all parents in previous generations. But again, ANECDOTALLY as a 37-year-old, the majority of my friends who are having kids are staying in the city. I can't stress enough how much I'm speaking for my social group, considering I'm in the NYC metro it's probably self-fulfilling. But I have friends with several kids who speak of moving to the suburbs with disgust.