Harry Dent - real estate going down next 20 years

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Harry Dent - real estate going down next 20 years

David Hodge
Rental Property Investor · Laguna Niguel, CA · Member since 2015 · 142 posts · 98 votes
What is everyone's opinion on Harry Dent? He points out that real estate has pretty consistently gone up over most of our life times because of the baby boomers, but now that they are down-sizing and dying off, real estate will decline over the next 20 years. I think most would agree that whatever the baby boomers touched, turned to gold, since they have been the largest generation. Once they are gone, where will the demand for home ownership come from? Millennials prefer to rent, so unless that changes, who will bring the demand that the baby boomers have provided in the past? Appreciation is critical to building wealth in real estate and without it, building a large rental portfolio is a much slower process. Is the consistent appreciation we've seen in the past over? I'm interested in everyone's opinion on this.
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Investor · San Jose, CA · Member since 2012 · 2k+ posts · 3k+ votes
10y

A picture is worth a thousand words. I'm surprised he's still in business. He's been wrong over and over and over again. Nuff said. 

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  • Andrey Y.
    Specialist · Honolulu, HI · Member since 2014 · 1k+ posts · 1k+ votes
    10y
    Originally posted by @Dolly Caswell:

    To those of you who think there is no more room to build, no more space to live in, you can move to Alaska! Just don't bring your traffic jams, noise and industrial pollution. It's a pretty nice place to live, and we welcome you here!

    I heard Alaskans are generally not welcoming of people moving from the mainland, true or no?

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  • Scott TrenchPro Member
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    10y

    Baby Boomers may well be downsizing and dying off, but the boomers are the ones that crushed it in the suburbs. I predict that the millennials will move back to the urban cores of major metropolitan areas over the next 20-30 years. I predict that you'll see us owning less and less (like cars) and preferring urban city centers. Real estate in concentrated pockets of the country, if I'm right, and Harry Dent is wrong, will continue to appreciate at increasing rates, and property in the suburbs will age and become neglected. 

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  • Frank Jiang
    Investor · San Diego, CA · Member since 2014 · 592 posts · 765 votes
    10y
    Originally posted by @Scott Trench:

    Baby Boomers may well be downsizing and dying off, but the boomers are the ones that crushed it in the suburbs. I predict that the millennials will move back to the urban cores of major metropolitan areas over the next 20-30 years. I predict that you'll see us owning less and less (like cars) and preferring urban city centers. Real estate in concentrated pockets of the country, if I'm right, and Harry Dent is wrong, will continue to appreciate at increasing rates, and property in the suburbs will age and become neglected. 

    Weird prediction given that millennials move from city to suburb way more than the other way around.  The idea that millennials prefer the city is a myth that's not back up by data.

    http://fivethirtyeight.com/datalab/think-millennia...

    http://www.wsj.com/articles/millennials-prefer-sin...

    http://www.fortunebuilders.com/why-a-growing-numbe...

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y

    I agree and this depends on the exact location of the suburb. For example, where I live, which is adjacent to Beverly Hills, Bel Air Zips/West LA, these suburbs I think will continue where the boomers left off. Not in a small way either and perhaps in the biggest way there is nationally possible. Still even 12 miles away the suburbs are hotter than hot. Actually, I can go many more miles than that and still encounter multiple offers as normal. Of course, Denver,  being a top millennial hot spot also,  it is likely some burbs carry on nicely as well.

    Currently, it is like throw a dart out here, LA. I realize that is not normal as compared for many average national suburbs futures. Everyone might consider where do the millennials and boomers really want to live or what is going to attract them to reach into their wallets.  There could be some cross paths worth investigation especially for the more insightful longterm investors. And if you somehow combine the two demos....forget about it...game over...as in golden. 

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  • Scott TrenchPro Member
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    10y

    Interesting - most millennials, or at least those surveyed in these reports must be very different from the overwhelming majority of folks that I know and have met in my life thus far! Perhaps that's because my friends and colleagues tend to be well-educated, higher earners. 

    I see these types of folks moving into the city in droves, buying property, rehabbing it, and otherwise "gentrifying" neighborhoods. I see this accelerating transition in surrounding city centers and changing fundamental neighborhood characteristics. I see this accelerating real estate gains for investors, when compared to investing in already nice suburbs.

    I see the wealthy, affluent millennials continuing to move into the city cores in droves, and for real estate prices to continue gaining there over the long term. It's where I have and will continue to put my money (of course, making sure to keep steady cash flow, and stay well-capitalized, like all investors should). 

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  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    Who's Harry Dent? Luckily, my market never heard of him :)

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y
    Originally posted by @Scott Trench:

    Interesting - most millennials, or at least those surveyed in these reports must be very different from the overwhelming majority of folks that I know and have met in my life thus far! Perhaps that's because my friends and colleagues tend to be well-educated, higher earners. 

    I see these types of folks moving into the city in droves, buying property, rehabbing it, and otherwise "gentrifying" neighborhoods. I see this accelerating transition in surrounding city centers and changing fundamental neighborhood characteristics. I see this accelerating real estate gains for investors, when compared to investing in already nice suburbs.

    I see the wealthy, affluent millennials continuing to move into the city cores in droves, and for real estate prices to continue gaining there over the long term. It's where I have and will continue to put my money (of course, making sure to keep steady cash flow, and stay well-capitalized, like all investors should). 

     I think when one checks affluency, millennial and boomers have more in common than not. They want top notch amenities as close as possible. When affluent boomers downsize and millenials step up to the plate, many end up in the same vicinity. Talk about high rents. 

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  • Charles Worth
    Investor · New York City, NY · Member since 2015 · 808 posts · 417 votes
    10y

    This is such a loaded question. There are numerous gamechangers on the horizon. What aboutself driving cars? What about jobs moving more toward work that can besetup in new locations at the drop of a hat? What about a generation with increasing obligations and stagnating incomes? How will that affect things, no oneknows. True there are some constants like as @Scott Trench mentioned and the research supports that, at least today, millennials want like walkable cities, easier commutes, more collaboration with peers etc. However, how this manifests itself is anyone’s guess and its not hard to take a city like KC, etc. and carve out some space that meets much of this just look at a place like Austin. Its also not hard to imagine factors mentioned above like driverless cars changing what a commute even means. In short great to speculate hard to actually invest based on that. 

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  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    10y
    Scott is a bonafide investing millennial. I can confidently default to his in the trenches Scott Trench take. Many may not like his news but we should respect what his latest take might be and at least for the immediate Denver area.
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  • Bill S.Pro Member
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    Rental Property Investor · Denver, CO · Member since 2013 · 4k+ posts · 2k+ votes
    10y

    It's true that the millennials love the urban core but many have not yet had kids reach school age. I know I'm not in that demo but when we and our friends living in the urban core had kids that were school age, we bolted for the burbs. There was no way we were going let our kids hang out with other kids whose parents had not graduated from high school, didn't see the value in education, and whose primary goal in life was to start a family and the sooner the better. Urban schools is a tough nut to crack. Perhaps the millennials will reach critical mass and change the urban school. I know some schools in Denver that have two schools within the same building. One for those bound for college and one for the rest of the people. Right now the college bound portion is way smaller. It will be interesting to watch changes (or not) in urban school districts over the next 10-15 years as all these millennials start sending their kids to school. I would have no fear investing in the burbs with schools that have a good reputation. 

    The schools make or break the burbs. Many of the burbs from the '70s and 80s are the new ghetto. Around here the low end burbs (cheap tract housing and marginal schools) have become the urban core of old. As the gangs and drug dealers are being displaced in the urban core they are winding up in the older burbs where the lowest price points exist. Lowest price points exist due to cheap original construction.

    We are still building these new ghettos it will just take them the life span of the home (20 years) for them to "come to life".

    The circle of life continues.

    3Reply
  • Zach Quick
    Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
    10y

    His only opinion should be on Gotham's real estate.  

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  • Creig Leu
    Flipper · Fort Wayne, IN · Member since 2016 · 26 posts · 10 votes
    10y
    I am 22 and me and 3 of my friends have already bought houses. Millennials will buy houses. Maybe it's a Midwest thing but I know we all hated pissing away money renting. That being said. People will always rent. I don't see huge demand changes other than the increasing population. What's more concerning is the flock of sheep mentality that the general population has. Anyone with common sense should know buy low and sell high. The market crash in 08-09 was an excellent price to buy if you had the money and I think we will see a normal market correction within the next 3 years which will be another excellent time to buy. The only reason the market is as high as it is now are the interest rates. But I doubt the fed will do anything with those until after the election. That's likely the beginning of the market correction. I'm open to input this all purely opinion and what I see in the market.
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  • Scott TrenchPro Member
    Rental Property Investor · Denver, CO · Member since 2014 · 2k+ posts · 6k+ votes
    10y

    @Zach Quick No no no - that's *Harvey* Dent.

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  • Zach Quick
    Investor · Bentonville, AR · Member since 2014 · 759 posts · 379 votes
    10y

    @Scott Trench I was being intentionally dense, but glad someone picked it up.

    1Reply
  • George Wines
    Investor · Denver, CO · Member since 2015 · 61 posts · 23 votes
    10y

    Those articles are surprising to me as well. I was thinking the same way as @Scott Trench but maybe we are both falling victim to anecdotal evidence (both of us from the Denver area) and interact mostly with other people who live near to us (in the urban core)

    2Reply
  • Mike Landry
    Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
    10y

    Being one of the oldest millennial(1981) id like to put forth my opinion.  @Scott Trench I think you have a case of confirmation bias....as I may too.  I live in a  very nice midlle upper clas suburb of houston.  Educated, high earners, young parents averaging 3 kids per household.  Jobs consisting of oil mangement, engeneering, computer it, pilots, small business owners.  The average age might put them just outside of millenial teritory but there are a lot of millenials.  The key here is kids.  We are educated and value the quality of top of the line public schools.  When you look at the cost of living downtown in the trendy areas and paying for private school for multiple kids, it makes no sense.  The only ones I know living in the gentrified areas don't have kids, are single, or will leave when they do settle down.  Furthermore I believe the necessity to work in crowded downtown areas is only going to decrease as we become more mobile as a society.  

    I get it, its fun to live downtown, eat at the best restaurant, drink craft beer, walk everywhere.  Thats great before you procreate....which millenials are delaying.  But when they do decide to settle down they will be heading to nice quiet suburbs with good schools and ammenities. 

    2Reply
  • Roy Oliphant
    Rockwall, TX · Member since 2014 · 380 posts · 211 votes
    10y

    I think the real question is no how many millennials vs hoy many boomers but how many jobs.  The nature of work is changing and there will be less of it in the future.  Millennials will have to figure out where a large house fits in with large taxes and small paychecks.  My guess is mcmansion neighborhoods are not 20 year investments.  Cheap (smaller, efficient, close, etc.) will be where the majority will have to live.

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  • Mike Landry
    Investor · Montgomery, TX · Member since 2014 · 386 posts · 151 votes
    10y

    @Roy Oliphant Why will there be less work? I don't subscribe to the doom and gloom.  Just like realestate, everything is cyclical....stock market, job sectors.  As boomers retire their jobs will be replaced.  Sure some job industries will disapear but new industries will emerge.  How many tech/it jobs where around 20 years ago compared to now?  Airlines are forecasting growth in the next 10 years that will exceed their capability to keep up with employment.  Health care can barely keep up now.  I agree a generic college degree doesn't get you what it used to.  But specialized degrees and skilled training still provide great career opportunities.  Cheaper, smaller, efficient, close houses???? sounds like you agree about people living in the suburbs. Mcmansions will continue to be a luxury of the top %.  And the downtown gentrified trendy areas will continue to be a temporary stop over in the lifestyle of the millenials.  

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  • Tom Cooper
    Real Estate Investor · Houston, TX · Member since 2014 · 173 posts · 128 votes
    9y

    Harry Dent is no "expert economist" as he claims and he vastly exaggerates on the accuracy of his past calls.  He started out working with a large mutual fund company (AIM) and his "research" was largely designed, IMO, to boost mutual fund sales and keep people in those same funds at market tops.  In fact he wrote a book in 1998 calling for Dow 35,000!  Haven't seen that yet!!  Then he wrote about a coming crash in 2011.  Whoops, only three years late.   Here is a bit more exhaustive article from Barron's which sheds a little more light on this so-called expert! 

    http://www.barrons.com/articles/SB50001424052702303392404576566841665679146

    If anything, one might consider using him for a contrary indicator.

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  • Teddy Smith
    Real Estate Broker · Wilmington, NC · Member since 2016 · 236 posts · 126 votes
    9y

    Home-ownership is so ingrained in American culture that the desire to own real-estate will never go away.

    These types of headlines are so cheesy and speculative. BRB better go put all my assets into silver. The man on the TV said a "millennial crash" is coming!

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