A political analyst looks at the issues facing the Republicans and Democrats as they look to next year’s congressional races and the 2016 presidential contest.
Much like the secret meetings at the Vatican to determine the new pope, the major political parties are holding their own “conclaves” right now to figure out how to approach the next couple of election cycles, says Amy Walter, national editor of the Cook Political Report. Walter spoke during a luncheon at NAR’s Association Executive Institute event in San Diego, Calif., which ends this week.
Both parties face obstacles over the next several years, Walter says. Unsurprisingly, the biggest issue the GOP has to deal with is appealing more to minorities, a topic discussed at length in the months following the 2012 presidential election.
The Romney campaign believed that the 2012 election would play out much like the one in 1980, in which voter dissatisfaction with the economy and with the general direction of the economy led to Ronald Reagan beating Jimmy Carter, Walter says. However, minorities totaled just 11 percent of the electorate in 1980, she said. In 2012, they made up 26 percent. That trend will continue as 50,000 Latinos turn 18 every month in the United States.
“If your base is older, white voters, the trend line isn’t exactly going in the right direction,” Walter says.
This will make it more difficult for the GOP to win future presidential elections, she adds. Right now, if you look at the national picture, Democrats have a virtual lock on 17 states and the District of Columbia, which equates to 242 electoral votes. The GOP, by contrast, only has about 13 states that are practically guaranteed, which amount to 102 electoral votes.
This gap is at the heart of the effort by GOP Chair Reince Priebus to reach out to minorities over the next few years, Walter says. Additionally, Republicans are touting young rising stars like Louisiana Gov. Bobby Jindal and Florida Senator Marco Rubio, who are of Indian and Latino descent, respectively.
Despite their success in winning the presidency again last year, the Democrats have significant challenges of their own, Walter says. At the state level, the average GOP congressional district has gotten whiter. That’s due to a combination of redistricting and the fact that Democratic voters tend to cluster in urban areas with a much smaller geographic footprint.
Additionally, the 2014 midterm elections could shift the momentum back to the GOP, she says. Most of the close battles for Senate seats are going to be in states that tend to vote Republican. And minority and young voters typically don’t turn out as much for midterms. That means it will be very difficult for the Democrats to win back a majority in the House and maintain a commanding majority in the Senate for the foreseeable future. “It’s going to be a lot of defense for the Democrats [next] year,” Walter explains.
Also, there’s still some uncertainty as to who the Democratic candidate for president in 2016 will be. Hillary Clinton would seem to be an obvious choice, but it’s not entirely clear whether she’s going to run. And other than Vice President Joe Biden, the Democrats don’t have that many appealing candidates to choose from, Walter says. In contrast, GOP has a surprisingly deep and diverse group of potential candidates right now, including Jindal, Rubio, South Carolina Gov. Nikki Haley, and Kentucky Rep. Rand Paul.
“If [Hillary Clinton] doesn’t run, it’s going to be a thin bench for the Democrats,” Walter says.
Between now and 2050, the U.S. is expected to grow to about 403 million people. It’s about 310 million today. That’s almost 100 million more people and they have to live somewhere, and looking at today’s total inventory of homes, we’ll need 43 million more units.
These are sales and rental lease-ups that are forecast to happen regardless of the ups and downs of the U.S. economy, and that helps to put in perspective what your business opportunities are in the years ahead.
The forecast is part of a report, called “Demographic Challenges and Opportunities for U.S. Housing Markets,” that just came out from a group called the Bipartisan Policy Center, which was started in 2007 by four former U.S. Senate leaders from both parties who are commissioning substantive research to find objective policy solutions to pressing issues.
NAR researcher Selma Hepp was part of the research team that prepared the study, She joined researchers from the University of Southern California and the Urban Institute.
Among their important findings is how the composition of the sales market is changing with the aging of the baby boomers and the arrival of the echo boomers. The baby boomers over the next two decades will be downsizing in a big way, in many cases getting out of the housing market altogether.
The result is expected to be the addition of some 11 million for-sale homes in markets from aging boomers between 2010 and 2020 and another 15 million between 2020 and 2030.
Who will buy all those units? The echo boomers, who are expected absorb 75-80 percent of them.
Lost ground. (Click to enlarge.)
Echo boomers are the children of baby boomers. They were born between 1981 and 1995, and they’re far more diverse than previous generations. That means disparities in home ownership rates between white households, African Americans, and Hispanics could close, assuming poorly thought-out mortgage financing rules don’t get in the way.
Right now, times are not good for minorities from a home ownership perspective. They were hit disproportionately hard by the housing crisis (see the nearby graph), and as the report shows, their home ownership rates have gone down the most in the last several years, widening the ownership gap with white households. So, until markets turn around, the country is losing, not gaining, ground in that respect.
The bottom line is, what’s decided in Congress and in the administration over the next several years to change the mortgage finance market will be crucial to the options available to echo boomers and others in deciding whether to rent or buy, and therefore whether wealth accumulation through owning will be in the cards for them.
As the researchers conclude in their report, “Whether for newly forming households or long-established ones . . . housing policies that emerge by the end of this decade have the potential to affect significantly the wealth portfolios of tens of millions of American families.”
By Brian Summerfield, Online Editor, REALTOR® Magazine
The population of the United States at the mid-century mark will have been shaped by major demographic shifts that are already underway, according to Dr. William H. Frey, a demographer and senior fellow with the Brookings Institution, a Washington, D.C.-based public policy organization.
Frey, who spoke at the Mortgage Bankers 2011 Conference & Expo last week, used 2010 census data to identify the following trends as central to understanding what America will look like in 2050:
- By 2042 at the latest, the U.S. will reach a “tipping point,” at which the white American majority becomes a plurality.
- Hispanic Americans, who accounted for more than half of all U.S. population growth from 2000-2009 and about 16 percent of the overall population, will still be the second-largest racial/ethnic group in the country. However, Latinos will have for a much larger share of the population in 2050, possibly more than one-third of the total.
- Americans will continue to migrate south and west. Many of these will be African-Americans, largely reversing the “Great Migration” of the early 20th Century. However, more immigrants will opt for major metros on the coasts.
As a result of these and other developments, Frey identified the following three emerging “demographic regions” in the United States: Continue reading »
By Brian Summerfield, Online Editor, REALTOR® Magazine
A recent report from the Urban Land Institute outlines a few important demographic groups in real estate going into the new decade. (The Teens? The Tens? Are we going to have another debate about decade labels after we failed to definitively resolve the last one?)
Anyway, according to ULI, the following three generational groups will shape the fortunes of the housing market over the next 10 years: Continue reading »
By Erica Christoffer, Contributing Editor, REALTOR® Magazine
Whether you are working with a Baby Boomer, Gen Xer, or someone in the Gen Y age range, it’s important to know what your buyers wants in a home.
While age demographics are still a driving factor in the type of home your buyer is interested in, and three presenters at the International Builders’ Show Wednesday said there is a tie that binds – today, less is more.
Saying goodbye to McMansions, Mary Dewalt of Mary Dewalt Design Group, Steve Lane of Denver-based KEPHART, and Ken Perlman of Sullivan Group Real Estate Advisors outlined the driving demand behind each generation and what features they want in their downsized home in the session “From Wow to Now: What Today’s Home Buyers Really Want.”
Baby Boomers (age 45-65):
They don’t see themselves as getting older, and they don’t want to compromise their active lifestyles. Continue reading »
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