Meredith Whitney, the one-time “Oracle of Wall Street” who predicted the Great Financial Crisis, doesn’t mince her words. Young single men living at home and playing video games are behind a “crisis of the American male,” she explained in an interview with Fortune.
Her theory about dateless, spiraling young men ends with home prices declining for years, or even decades. Whitney sees home prices falling 30%, but it’s “not the end of the world,” in her mind because of how much prices went up during the pandemic-fueled housing boom. “There’s so much equity stored up in American homes, there’s no collateral damage from that—people then, on paper, are worth less than they thought they were,” Whitney said. “It sounds dramatic, but it’s really not that dramatic just because you’ve had so much massive inflation from the zero interest rate policy.”
As of last year, almost 40% of American homeowners were mortgage-free, meaning they owned their home outright. Although they’d probably be upset to see their net worth fall that much. On the other hand, those who missed the mark and didn’t buy a home before the run-up in prices during the pandemic, might be happy. But let’s go back to the premise: young men (who are actually only part of the equation, and something she’s discussed before).
A lot of young men are single, a study from the Pew Research Center found last year. More than 60% of men under 30 described themselves as unattached in a survey conducted by the Pew Research Center; Whitney referred to this analysis in her thinking. The aforementioned study also found the share of single men in the country looking to date or be in a relationship has declined since 2019, which Whitney alluded to, and emphasized that a portion of young, single men “haven’t had sex in the past year and don’t seem to be bothered by it.” More men are living at home with their parents, and for longer too. A 2016 report from the Pew Research Center found young men were more likely to live at home with mom and dad than a partner.
So where does this all stem from? Mid-2000s video games, in Whitney’s mind. “You have an ability to feel like you’re gaming with a group of friends or community, but you’re really just at home alone,” she said. “And so the socialization of the young American male really started to break down significantly around that time.” According to Whitney, as gaming went up, so did malaise, noting a “despondency and rampant loneliness amongst young men,” in a recent note her advisory group produced. The gaming explosion was driven by technological improvements and the growing popularity of gaming on an iPhone; and it coincided with a poor job market. Combined, these forces have created a cohort of young men who don’t know how to socialize, in her view. “Gaming and social isolation are somewhat of a vicious cycle in which the lack of real social contact creates a sense of social unease, making real social contact much more uncomfortable,” the note states.
Last year, an analysis found that 65% of Americans played video games, and that equated to more than 200 million weekly players, and a 2015 report from the Pew Research Center found that 77% young men play video games—more than any other demographic. She’s said something similar before, only it was about sports betting.
“Unless you’re creating a household, there’s no reason to buy a house,” Whitney said, touching on household formations and birth rates. Before the pandemic, household growth over the previous decade was the lowest ever recorded, per Pew. But another account shows a surge in household growth from 2019 and 2021.
Still, household formation and demand for housing is only one part of the equation. The other has to do with a “silver tsunami,” a metaphor for an aging population, really baby boomers in the housing world. There are varying estimates and predictions regarding the “silver tsunami,” but it all essentially boils down to more supply. Whitney, toward the end of last year, said 51% of people over the age of 50 are set to downsize to smaller homes, citing an AARP report at a conference. That would bring more than 30 million housing units to the market. Separately, a recent Freddie Mac analysis revealed nine million homes were set to come onto the market in the next decade as baby boomers age, but suggested it wasn’t going to really disrupt the housing world.
Either way, she sees more supply and not enough demand in the coming years, which’ll culminate in plummeting home prices—essentially our current situation inverted. Presently, we don’t have enough housing to meet demand (one estimate shows we’re actually missing anywhere between roughly two million and seven million homes), and home prices keep escalating because of it. Whitney doesn’t think we have a housing shortage, not on a national scale. If anything, there’s a shortage of affordable housing, and not enough housing where people actually want to live, she explained. Calling our housing crisis a metropolitan crisis might be better, a housing policy analyst once told Fortune .
Even so, some research has shown single women are buying homes more than single men, so maybe they’d save the housing universe? Not a chance, Whitney said. “How many single women are going to buy four bedroom, three bath homes?” She then brought up the 5 D’s of real estate: diapers, diamonds, divorce, debt, and death. “Without those…I just don’t think it’s going to be a big enough driver.”
Still, if what she’s predicting comes true, it won’t be another housing crash.
The task, stemming from video game makers like Fortnite, is being performed by cutting-edge technology.
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Imagine if you could tour your dream home – from any place, at any day or time – before it has broken ground.
That’s exactly what real estate developers are testing.
The task, stemming from video game makers like Fortnite, is being performed by cutting-edge technology.
“It’s been a fascinating tool for us. And it really helps people who aren’t able to visualize buying off a plan, to seeing it not in real life, but in the virtual world where it’s 3D and you can actually walk through the space, and you get to sense the grandness of it all,” Related Group senior vice president Eric Fordin told Fox News Digital.
“It gives our sales team and their clients, the outside brokers, the opportunity to really showcase what a world-class product is going to look like,” he added.
The Related Group reportedly boosted sales after teaming up with Brazil-based METAoriginal, to create real-time, life-like renderings for two of Fordin’s South Florida condominium buildings that haven’t been built yet.
METAoriginal told Digital on background that it takes four to six months to finish a rendering and can cost anywhere from $500,000 to $1 million depending on the size and scale of the project.
The video game-inspired platform, called “Unreal Engine 5,” creates photo-realistic visuals and allows for client customization, changing the floors, furniture, or time of day with just a click.
It’s taken more than 12 years to perfect the technology, which has now been used by METAoriginal for 40 different properties.
“It’s true to life,” Fordin said of the technology.
“It was originally brought up to be used as a marketing tool, but we’re using it as a design tool where if we say, ‘No, we don’t like where that wall is sitting, it doesn’t look right. We want to adjust it,’ we can make that change on the fly.”
One of the most attractive aspects of the technology, according to the real estate expert, is that it doesn’t require virtual reality goggles to optimize the client’s experience.
“We wanted people to be able to come to a sales center or be in a space, be sitting on the couch… where they can just sit there and actually enjoy. It’s like watching a movie, so to speak, as opposed to having to put the goggles on and walk around the space and walk up, down, sideways and hope you don’t bang into a wall,” Fordin explained.
“If you’re wearing those goggles, you can’t have that one-on-one human interaction and connection.”
In addition to potentially saving time and money on the developers’ backend, Fordin pointed out that the tech also eliminates uncertainty for the client.
“I would say if there is a downside,” he said, “it gives them a point of indecision, whether they want this unit or that unit… and that’s not a bad thing for us. That’s a good thing because they come back and even after they’ve signed, they’re like: can I go back into my unit again? I want to see this. So it’s not only a good tour from a sales point, it’s a good reinforcement tool as well.”
Prior to any in-person construction or tours, Related Group’s Fisher Island property was reportedly 50% sold, while the luxury Bal Harbour condominium is north of 30% sold – however, Fordin isn’t concerned that the technological advancements could put his job at risk.
“I’m not worried of [sic] technology taking over my job. This is very hands-on, it’s a very person-to-person type of relationship. And I don’t see artificial intelligence coming and selling and running a project from soup to nuts. Doesn’t happen,” Related’s SVP said.
Fordin recommended other developers consider investing in the technology and expanded on “two sides of the coin.”
“It’s an amazing tool for sales and marketing purposes, but it’s an even better tool from a design perspective because you can see your design evolving before your eyes, before you put one shovel in the ground, which then will lead to change orders,” he said.
“Although it costs a good bit of money going in to get it started, it definitely has a payoff when you’re saving yourself on potential change orders down the line, and it’s helping you with your sales as well.”
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