Baby Boomer - Millennial Bidding War

A new challenge has emerged throughout the real estate markets worldwide:?Many smaller, more affordable entry-level homes have two audiences, not just the obvious, younger, first time home buyer. Yes, retiring and down-sizing Baby boomers are competing with first time home buyers for the same properties.

The biggest challenge is that the Boomers often have the better finances - as a result of a lifetime of work and savings - to offer more appealing financial profiles to sellers, often all-cash offers. More challenging is that to downsizing baby boomers paying over the asking price is more easily achieved....often the smaller, cheaper homes appear REALLY cheap when compared to the large home they may have just sold and knowing they are older - and TIME IS THE LAST LUXURY - they are not in a 'wait-and-see' mode: they want instant gratification, even if it costs more. Worse, many are buying TWO or even three lesser priced homes (after selling a large expensive home) in multiple parts of the country to maximize their retirement years. And selling a big house makes this more easily affordable for many.....

Granted, Millennials have started being the beneficiaries of the GREAT WEALTH TRANSFER - via inheritance or gifting - worth $68 trillion, which further compounds the bidding war between them and the Baby-boomers. It could take at least a decade to catch up with US under-building, and it may take even longer to catch up on the more affordable entry level homes as many builders prefer building the more profitable higher priced homes.

I would expect entry level home prices to continue their rise.