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Wednesday, August 24, 2016

American Demographics Bad But Developed World is Horrific - Will US Fare Relatively Better?

As a follow-up to Demographic HomeMageddon Underway...Will Last Until at Least 2035 , I wanted to show how the US demographic situation compared to the greater global demographics.

The chart below shows the 15-64yr/old annual population change for the combined 35 OECD nations (List of OECD Nations)  plus China, Brazil, and Russia vs. annual change in their combined 65+yr/old populations.  These nations represent over 3 billion of earths 7+ billion inhabitants (about 40%) but represent over 70% of global oil consumption and likewise general consumption.

If the rest of the developed world is remotely similar to the US where over 90% of home buying is done by the 20-69yr/old population...then the fact that this younger working age population will begin declining in 2017 probably matters...a lot (yes, data set is 5yrs different than below US data set but you get the point).  But not only does the annual change in working age population dip into negative territory, it lives there for the remainder of the OECD estimates!  This represents depopulation among potential buyers and surging population among sellers.  This isn't likely to work out well.

So, on a relative basis, America wins???  The chart below shows American annual population changes but note the numbers (particularly the young working age population) never go negative...just slow to a trickle.  The rest of the developed world must be envious of America's poor demographics vs. their horrific demographics.

Whether the US, and particularly real estate in the US, is a better bet than real estate in the remainder of the developed world...will be a good follow-up topic.

1 comment:

  1. The estimates do portend the US to be the best house in a bad neighborhood. As the birthrate in the US continues to stay suppressed, how long before those population numbers are revised lower? Additionally, not all houses are equivalent. How many of the homes built over the last 3 decades were constructed for the "typical" American family? (ie. 2 parents, 2 kids, and a dog) A family of millennials with 1 (or 0) kids, simply has no need for a 3-4 bedroom home. Nor do baby boomers who become empty nesters for that matter. I would be interested to see what the current housing inventory composition looks like. Does the high rate of millennials living with their boomer parents offset the demand drag on larger homes? Or does the bottom fall out of the McMansion market, while there is simultaneously a scramble to construct millions of new, smaller, more practical homes?


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