The Great Senior Sell-Off Could Cause the Next Housing Crisis

[zedd]

"In the coming yearshttp://islandpress.org/ip/books/book/islandpress/R/bo8079737.html, baby boomers will be moving on (inching further through the python, if you will). “They will want to sell their homes, and they’re hoping there are people behind them to buy their homes,” says Nelson, director of the Metropolitan Research Center at the University of Utah. He expects that in growing metros like Atlanta and Dallas, those buyers will be waiting. But elsewhere, in shrinking and stagnant cities across the country, the story will be quite different. Nelson calls what’s coming the “great senior sell-off.” It’ll start sometime later this decade (Nelson is defining baby boomers as those people born between 1946 and 1964). And he predicts that it could cause our next real housing crisis."

Interesting theory.

The Great Senior Sell-Off Could Cause the Next Housing Crisis - Emily Badger - The Atlantic Cities

 

[SumDay]

Interesting. I have a real estate agent friend who recently declared her specialty as a "senior expert". She's doing the full service package of evaluating what people want/need, arranging for movers, estate sales, etc. She's doing quite well. I'll tell her she may want to escalate her efforts before this bubble bursts.

 

[heeyy_joe]

Maybe. All real estate is subject to local conditions.

 

[zedd]

Maybe. All real estate is subject to local conditions.

Right. The author's point being perhaps that if your paid-for home is in fly-over country and you're looking to it as a bank account to cash out in your golden years -- perhaps that strategy might be difficult to implement based on projected demographics.

Just sayin

zedd

 

[RockyMtn]

location, location, location!

 

[Midpack]

An interesting article until she strays into her narrow ideology near the end...

We hope/plan to relocate one last time in the next few years, and we're certainly wary of location. Moving to a place with declining population, poor economic outlook on top of the boomer chronology could easily be a serious real estate mistake. No crystal ball, but definitely on our radar along with several other considerations that most real estate search sites don't offer...

 

[cons]

The last housing bubble was caused by speculation and greed. IF this were to happen, it wouldn't effect the market as greatly. You could say the same about the stock market...boomers selling stocks and getting out of the market all at the same time. Would the stock market be stagnant as well? I don't believe so.

As an example, there have been numerous co-workers that retired from my place of work. All of them waited until they got offers close to or above their asking price for their homes before ther retired. The longest wait was one year.

 

[DeborahB]

We live in a large house (fully paid for). We already pay to have the lawn mowed and the house cleaned and I don't regret a penny of it. I can't physically do those things any more. I can't imagine moving from this house to a smaller one until I'm in my 80s. So... hopefully when /if it becomes necessary, we'll sell it for under value if we have to. If you drop the price enough, someone always will buy it. Unless it's 12K square feet... ours is more reasonable!

 

[Animorph]

Seems like most people have preferred to stay in their homes as they aged. And it's a long 18 year period, not all at once. Won't be a crisis, but it might keep prices from rising as fast as they might have otherwise. I don't think it's something worth worrying about now unless you're a journalist.

 

[ERhoosier]

Maybe. All real estate is subject to local conditions.

+1

Not the 1st time either US population or regional real estate markets have experienced shifts. Some areas (e.g. Detroit) lose while other areas (e.g. metro Phoenix) continue to expand. Overall US population is still increasing as immigration exceeds overall mortality of aging Boomers. IMHO any new "Housing Crisis" will much more likely be due to economic/financial issues vs structural population changes (e.g. aging or whatever).

 

[Mulligan]

Seems like most people have preferred to stay in their homes as they aged. And it's a long 18 year period, not all at once. Won't be a crisis, but it might keep prices from rising as fast as they might have otherwise. I don't think it's something worth worrying about now unless you're a journalist.

I agree. Being born in 1964 and technically a "Boomer", I feel a few aches and pains, but come on, don't stick me in the nursing home yet!

 

[DeborahB]

I agree. Being born in 1964 and technically a "Boomer", I feel a few aches and pains, but come on, don't stick me in the nursing home yet!

LOL! Well when you get a little older you may find unexpected aches and pains that you don't have at 49 - I certainly have them. And hate them all! But I pay to have stuff done that we can't manage - and it's worth it.

Anyhow why'd we spend money to get this nice house if not to enjoy living in it?

 

[gerrym51]

I think the article is theory. obviously if it's just the 2 of you and you have a 4 bedroom house it's larger than you need.

it does not mean you want or have to leave it-just that you really don't need it.


i think the author is probably correct to a degree

 

[dmpi]

My experience is that older folks stay in their homes long past their abilities to maintain them. The government has taken a lot of flack for taxing the seniors out of their home. Now the pendulum has swung the other way. There are all the programs that help seniors stay put.

 

[wmc1000]

Downsized first time at 55 when last child left for college - still have 3BR +Den - will downsize once more - 2BR + Den in 1-2 years

 

[W2R]

I bought my modest, 1600 square foot house in 2002. I admit that at that time, I thought a smaller easy-care house like this one would be in great demand when the boomers started to retire.

Well, surprise, it's not, really! That's OK, because I am happy here. Like quite a few other older baby boomers, I am tentatively thinking of staying where I am for now.

 

[Midpack]

I bought my modest, 1600 square foot house in 2002. I admit that at that time, I thought a smaller easy-care house like this one would be in great demand when the boomers started to retire.

I'd be willing to bet you'll be proven correct in time...

 

[W2R]

I'd be willing to bet you'll be proven correct in time...

That would be great! I'd sell it for lots of $$$ and go from there. You're right, maybe it's too early to tell.

 

[gerrym51]

I bought my modest, 1600 square foot house in 2002. I admit that at that time, I thought a smaller easy-care house like this one would be in great demand when the boomers started to retire.

Well, surprise, it's not, really! That's OK, because I am happy here. Like quite a few other older baby boomers, I am tentatively thinking of staying where I am for now.

if you sold it what would you go to-small easy care house-you already did it.

i bought my small condo 20 years ago. condo fee pays for everything-is life perfect in condo community-NO-is life easier for older person in condo community-YES

 

[gardenfun]

On the demand side of the equation: I used to think that us boomers would be trying to sell our 4 bedroom homes to the X's and Y's when they were buying their first homes. I thought, "gee, those young kids won't want all these 4-5 bedroom homes we raised our kids in. They'll need something smaller". Therefore perhaps agreeing with the article that there might be a glut of big houses on the market that first time buyers wouldn't want or couldn't afford.
But it seems like many (who knows what %) of first time buyers are in fact jumping right into the bigger homes, skipping the modest 2-3BR 1 Bath places we had in our 20's and 30's...
Just speaking from my own experience in suburbia on both coasts. YMMV

 

[haha]

One thing is that during much of the 70s-90s women, especially younger women, were being fully integrated into the workforce. This boosted household income out of proportion to economic growth. That trend has run its course, and in fact has to some small extent reversed. So one support to buying power has been used up as a growing factor.

Ha

 

[MichaelB]

Robert Shiller says housing grows in value slightly more than inflation, has done this for many decades and projects it will continue. I recall reading last year he then felt that in general, housing prices were back in line with their historical trend.

 

[samclem]

I think the article is theory. obviously if it's just the 2 of you and you have a 4 bedroom house it's larger than you need.

it does not mean you want or have to leave it-just that you really don't need it.

(Emphasis added). Echoes of recent pronouncements from certain "public figures". I'm with those who say the folks who live in the house, who have decided to spend their own money to buy it, are likely best positioned to know what they need. Some of these old coots have hobbies that require a room or two, or they enjoy having their kids/grandkids/friends stay the night on occasion.

 

[W2R]

(Emphasis added). Echoes of recent pronouncements from certain "public figures". I'm with those who say the folks who live in the house, who have decided to spend their own money to buy it, are likely best positioned to know what they need. Some of these old coots have hobbies that require a room or two, or they enjoy having their kids/grandkids/friends stay the night on occasion.

+1000 Who are we to say what somebody else needs, when you think of it? "Never criticize a man until you've walked a mile in his moccasins", as the saying goes. Which is not to say that anybody was criticizing anybody, but simply that we can't know all the factors that inspire someone else to buy a large home.

Speaking of hobbies that require space, I am thinking of Jay Leno with all his cars, and the huge garage area that he very likely has.

 

[W2R]

My experience is that older folks stay in their homes long past their abilities to maintain them. The government has taken a lot of flack for taxing the seniors out of their home. Now the pendulum has swung the other way. There are all the programs that help seniors stay put.

Interesting post! Come to think of it, this year I will turn 65, so I will qualify to have my property tax assessment frozen for life. As long as I don't move, my property will never be assessed at more than it is right now. That is a good motivation to stay put, since my property taxes are very low.