Economic Crisis Unintended Consequences: Moving Back with Ma and Pa…And Grandma and Grandpa.

There may be a bright spot in some of this economic mess.  All that McMansion inventory may be suited to housing extended families.  Many people are now finding out that it isn’t too late or too early to move back with your extended family because of economic reasons.  Here in California, we’ve heard many stories of recent college graduates who moved back home because they couldn’t find work.  But here we have established workers suddenly losing their jobs and needing to find a way to make ends meet:

“(LA Times) Then, a few months ago, more change: Augustine lost her $60,000-a-year job as a manager at a hardware store. Garcia, trained as an electrician’s assistant, could find no such work following the collapse of the housing market, so he started driving a tow truck. Now he and Augustine, he says, owe money to her mother because they haven’t been able to help much with household expenses.

“It’s hard because I’ve been living on my own since I was 17,” Garcia says. “We went in like roommates — we wouldn’t be in her business, and she wouldn’t be in ours. She lived here alone for the last six years, and to have her son-in-law and daughter back — I’m sure it’s been hard on her not having her own privacy.

First, the subprime meltdown and housing market collapse, then the woes on Wall Street, now mounting layoffs. Each has contributed to a phenomenon that many Southern Californians never imagined they would have to face: moving back home with mom or dad after years — sometimes decades — of being on their own.”

A double whammy.  The AARP estimates that 25% of foreclosures in the second half of 2007 occurred to those who are 50 years and older.  And we are also going to see a reverse push as well because you will have parents in many cases assessing the damage done to their 401k or other retirement plans in the last few months.  Much of this is not reflected in the longer term data.

Who would have thought that the housing crisis would actually bring some families closer together?

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