Baby boomers, born between 1946 and 1964, are a massive generation, and their actions will significantly affect the real estate market over the next decade. Here's a breakdown of the key ways they could shape things:
Increased Housing Inventory:
Downsizing: As baby boomers age, many will downsize from larger family homes to smaller, more manageable properties. This will increase the supply of larger homes on the market.
Moving to Retirement Communities: Boomers seeking a change of pace or specific amenities will relocate to retirement communities, further adding to the available housing stock.
Increased Mortality: The natural aging process means increased mortality rates amongst the boomers. Homes will be passed on to heirs or enter the market for sale, adding to inventory.
Shifts in Location Preferences:
Suburbs to Urban Areas: Some boomers may prefer to move back into urban areas to access amenities, walkability, and cultural attractions. This could revitalize some urban areas and put pressure on the housing supply.
Warmer Climates: Some retirees will opt for warmer climates like Florida, Arizona, and other parts of the Sun Belt, increasing demand in those regions.
Demand for Specific Housing Types:
Accessibility and Aging-in-Place: Boomers will prioritize homes with features that promote accessibility and safety, such as single-story layouts, wider doorways, and smart home technology.
Low-maintenance Living: Demand for condos, townhomes, and communities with less maintenance will likely increase.
Economic Impacts:
Selling Assets: Selling boomer homes could release significant equity into the economy, potentially stimulating spending in other areas.
Inheritance: Children of boomers may inherit properties, impacting their own housing decisions and potentially influencing the rental market if they choose to rent those properties out.
Overall, the baby boomer generation's choices will have these critical effects:
Increased Supply: There will be a more significant inventory of homes for sale, potentially easing some of the current market tightness.
Price Impacts: Increased supply in specific markets could stabilize or even decrease prices in some areas.
Demand Shifts: Expect changes in the types of homes in high demand and where that demand is concentrated geographically.
The housing market is complex. These are potential impacts, but other factors like interest rates, overall economic health, and the housing preferences of younger generations (specifically millennials and Gen Z) will also play a substantial role in how the real estate market evolves.