How will the housing market be affected by the wave of baby boomer downsizing that is around the corner?
Approximately one in three homes in the U.S. is owned by someone who is 60 and older. As these millions of boomers decide it’s time to sell their homes and move to another location or to a retirement community, housing markets will be impacted, says the article from Market Watch “These housing markets will feel the biggest impact from the ‘Silver Tsunami.’”
In the ten years between 2007-2017, around 730,000 homes that had been owned by seniors went on the market every year. That number is expected to grow enormously over the next few decades. A new analysis from Zillow says that as many as 920,000 homes will go on the market between 2017-2027. In the ten years after that, the figure may go as high as 1.17 million homes per year.
In total, says Zillow, almost a third of currently owner-occupied homes, around 20 million properties, will go on sale as the direct result of a boomer dying or deciding to move to a smaller home or retirement facility.
Pair this avalanche of big houses on the market with the tendency for Millenials to select smaller more affordable homes, and supply may well exceed demand.
The wave of baby boomer downsizing won’t hit all at once, and it won’t strike all markets equally.
The biggest impact is expected to be in the Tampa-St. Petersburg-Clearwater metropolitan area in Florida. The Tucson, Arizona area is next in line, with the Miami-Ft. Lauderdale-Port Saint Lucie and Orlando metro areas following.
At the far end of the spectrum, Salt Lake City, Utah, is expected to see the smallest impact from the Silver Tsunami. Less than 20% of homes there are expected to go up for sale, because of being owned by aging boomers.
A few other cities are expected to escape this trend with little impact. They include Austin, Houston, and Dallas, all in Texas.
In other cities, there are micro-neighborhoods that will feel the impact within cities. For instance, in greater Phoenix, all will be well. However, in the towns of El Mirage or Sun City, nearly two-thirds of all homes will be on the market, as they are mainly retirement communities.
Those who are planning to relocate for retirement may want to keep the wave of baby boomer downsizing in mind if their retirement finances depend upon the value of their homes.
Reference: Market Watch (December 3, 2019) “These housing markets will feel the biggest impact from the ‘Silver Tsunami’”