Pardon my straying from the world of health care but I simply could not resist making this brief, but I believe telling observation. I have lots of interactions with affluent, young adults, both in my professional domain as well as personal domains. These cadres are the most likely individuals who will be entering into the housing market in the next decade. However, I have noted a dramatic shift in their mindsets. Whether this shift is a local aberration or indicative of a more widespread change in sentiment is an open question.
We had a meeting of our trainees to discuss the challenges of home and work balance. One message which was universally embraced by all of the junior faculty as well as senior trainees was the advice to younger physicians and students to NOT BUY A HOUSE! With the change in the housing market making resale difficult, many of their peers had found themselves saddled with homes when they are called upon to move to their next professional station. Their response was perfectly rational; rent and don't buy until you are certain you will be staying for a while.
I also observed this in my children's cohort. These are individuals who want to maintain the flexibility required to pull up roots and move to where they can find opportunity. This means that they do not want to be saddled with the responsibility of selling a home. When this responsibility was also associated with the real likelihood of a substantial financial windfall, it was worth the trade off. Now that this is not the case, why take the risk? Housing has been transformed from a relatively liquid and high yield investment into an illiquid one which has limited prospects of any near term returns.
I offer these observations not as any proof of a sea change, but to raise the possibility that this might be happening and that this change in attitude, if widespread, may mean the recovery in housing will be delayed more than is widely appreciated. If young physicians, who have the financial means to purchase starter homes, are making rational decisions to delay these purchases indefinitely, who will be buying homes. If the children of affluent parents who can provide down payments are deciding against buying homes are also delaying home buying, who is left?