November 6, 2019 — Millennials and GenY and Xers can get a little tired of us baby boomers. Now some experts are seeing yet another problem we seemed to have created. By staying in our homes longer than expected, we are disrupting the housing market. According to research by the real-estate brokerage Redfin, homeowners are staying in their homes 5 years longer than they did in 2010. The typical stay has now lengthened to 13 years. That has led to a tight real estate market with record low inventories of homes for sale.
Many folks expected that by now baby boomers would have downsized, moved to warmer climes, or headed to a 55+ community. That should have led to a big supply of larger homes on the market, to be purchased by younger families wanting to move up. While many of us have moved, more are staying put than predicted. The result is a market disruption. Families that need bigger homes for their growing broods are finding a tight housing market, with fewer homes for sale than expected. The inventory of homes on the market is the lowest in 37 years, according to CoreLogic Inc. Smaller inventories keep prices high. Boomers are affecting the market for smaller homes and condos too. Because inventories are tight in all kinds of markets, there is pressure on both older and younger buyers. Although home equity-rich boomers are more likely to come out on top in any bidding war, they are reluctant to pay high prices for a smaller home.
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There are multiple reasons why baby boomers are not abandoning their larger homes in the suburbs and moving to active developments. Margaret Wylde, chief executive officer of ProMatura Group, a market research firm offered several theories for why this is happening in a very interesting Urbanland.org: article:
Boomers feel young and are still working. Many aren’t ready to give up their garages, workshops, and big yards.
The cost of amenities. The more amenities a 55+ or active community has, the more money it costs to support them. We see this at Topretirements.com, where many people posting worry about the cost of amenities, and particularly whether they want to pay for things they might not necessarily ever use.
Not everyone wants to downsize. Even in our own surveys we find a significant minority that plans on moving to a larger or more expensive home.
To those of Margaret we would add a few more:
Don’t want to leave the familiar. Moving away means changing doctors, dentists, churches, friends, and family. Sometimes that can be an overwhelming barrier.
Too much work. Moving also involves the huge job of downsizing and getting the home ready for sale, then finding a suitable replacement. All that work puts many people off.
Haven’t found the right product. It is amazing how many townhomes and condos feature second floor masters. Developments have the wrong amenity mix. Or potential buyers are put off by proximity to their neighbors or distance from shopping and medical.
Adapting the home they have. Many boomers are deciding to modify the home they love and are used to so that it fits their changing lifestyle and needs. Adding or converting to a first floor master is one idea (or even a separate bedroom). Some add an in-law apartment and invite a child to live in the main house. Eliminating floor level changes, adding an elevator, changing counter heights, adding lights, higher toilets, converting the exterior to maintenance free materials are other popular options to permit staying longer in that house.
Comments? Have you stayed in your pre-retirement home longer than you thought you would? If so, what are the reasons for doing so? Are there things that would tip you toward moving. Please share your thoughts in the Comments section so we can get a good discussion going, and learn from each other.
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