Aging baby boomers and their echo boomer children will significantly impact trends in the nation’s housing market over the next 20 years. In a new report released by the Bipartisan Policy Center, “Demographic Challenges and Opportunities for U.S. Housing Markets,” researchers at the National Association of Realtors®, The Urban Institute, and the University of Southern California analyze key demographic trends and their likely influence on housing and homeownership in the U.S.

Over the next two decades, the aging baby boomer generation will swell the nation’s senior population by 30 million. That demographic shift will likely help increase the supply of housing, since people over age 65 typically release much more housing than they absorb.

Kerry Vandel, director of Center for Real Estate at UC Irvine: “There will be some marginal impact of increased gas prices on the housing market – greater in lower-priced markets than in higher-end markets and greater in more distant communities requiring greater commutes than close-in neighborhoods. But even without the gas price increase, I was not anticipating a sudden strong rebound in the housing market this spring. So the net effect will not be that apparent, only an extension of bumping along the bottom.”

Mark Schniepp of California Forecast: “The recovery is on tract…… And gaining momentum. It’s very unlikely that the recovery would be derailed. However, the risks are an aggressive campaign by lenders to liquidate distressed inventory — including shadow inventory — causing home prices to fall further, delaying the housing recovery, and keeping credit markets stuck. This combined with larger and more widespread debt problems in Europe. And the failure by U.S. Firms to keep the job creation momentum going — 200,000 + per month is needed. Shocks to the system this year could also derail the recovery. In general however, the train has left the station and it will be difficult to slow it down. The risks to the current forecast are more to the upside than the downside.”

By: Esther Cho

The housing market is healing, a Capital Economics report stated, but the road to recovery will be a long and gradual one. The research firm expects to see home sales and homebuilding continue with increases, while house prices are expected to finally stop falling later this year.

 While certain areas of the housing market appear to be moving in a positive direction, Capital Economics still points out that with growth come constraints.

Here are excerpts of issues and explanations analyzed in the report.

Is the love affair between U.S. consumes and their single-family homes coming to an end? For younger consumers, this seems to be the case. And for Sam Zell, real estate celebrity and chief executive officer of the Chicago's Equity Group Investments, this means one thing: The younger generation of consumers is pretty smart.

There was a time during the housing boom when people got out of college, found a job and then bought a condo the very next day." Zell said. "I remember thinking, 'What are these young people doing tying themselves down that way?' That's changing now. Young people re realizing that they don't have to get on that track."

Federal Reserve Chairman Ben S. Bernanke made the following speech at the 2012 National Association of Homebuilders International Builders’ Show, held in Orlando, Fla. on February 10.

Housing Markets in Transition
The economic recovery began more than two years ago, but it doesn’t feel like much of a recovery for many Americans—certainly for those of you who depend on the housing sector for your living, as well as for the millions of others who have seen their home values plummet or lost their homes through foreclosure. Though some progress has been made in reversing the losses in jobs and income sustained during the recession, the pace of expansion has been frustratingly slow and the unemployment rate remains very high by historical standards. The state of the housing sector has been a key impediment to a faster recovery. In the typical economic recovery, a resurgent housing sector helps fuel reemployment and rising incomes. But as you know all too well, that scenario has not played out this time. Although the precipitous declines in construction that began in 2006 are, thankfully, now behind us, home building remains depressed in most areas, relative both to where it was before the downturn and to where it will need to be to meet the needs of a growing population in the longer term.

The housing market might be fragile at best, but some professors and M.B.A.'s say real estate is one area where business school students can find jobs.

David Hartzell, a professor of real estate and finance at the University of North Carolina--Chapel Hill's Kenan-Flagler Business School, says between 10 percent and 15 percent of the M.B.A. cohort at UNC specializes in real estate. It's extremely rare for M.B.A. students to become real estate agents, and most seek employment in real estate investment banking, development, or investment management, says Hartzell, who is the director of the school's Center for Real Estate Development.

The analysts at Capital Economics are holding fast to their forecast that the downturn in the housing market is drawing to a close.

As a result, they say housing should soon start to boost economic growth, but as housing now makes up only a small share of the economy, the sector is unlikely to add much more than 0.2 percentage points to annual gross domestic product (GDP) growth this year and another 0.2 percentage points next year.