55+ Living Guide Spring 2019 55 LG SPRING 2019 JOOM | Page 38
heads of household and, now, as the largest
class of retirees the country has ever seen.
Along the way, this generation has also left
a physical imprint on the American landscape
with potential impacts as long-lasting as
many of the social changes boomers brought.
In the 20 years between 1990 and 2010,
these consumers were at their peak family
size and peak income. And suddenly, there
was massive demand in America from the
same kinds of people for the same kinds of
housing: big, large-lot single-family homes
(often in suburbia). In those two decades 75
percent of demand for new housing con-
struction in America was driven by this trend.
Looked at another way, in all that time there
was virtually no demand for starter homes.
Now, baby boomers are moving on. They
want to sell their homes, and they’re hoping
there are people behind them to buy their
homes. Ok, if there’s 1.5 to 2 million homes
coming on the market every year at the end
of this decade from senior households selling,
I ask, “who’s behind them to buy? My guess
is not enough in some market places.”
According to data from an American Hous-
ing Survey, from 1989 to 2009, 80 percent
of new homes built in that era were detached
single-family homes. A third of them were
larger than 2,500 square feet. Now the ma-
jority of new housing demand will come from
the people who bought these homes, now
empty-nesters/retirees, wanting to downsize.
A vast majority of today’s households with
children still want such houses. But about
a quarter of them want something else, like
condos and urban townhouses. That demand
used to be almost zero percent, and if it’s
now 25 percent, that’s a small share of the
market but a huge shift in the market. And
this is half of the reason why some baby
boomers may not find buyers for their
homes if they wait too long. Even if the
numbers matched, the preferences don’t.
As people get older, their likelihood of
moving gets higher and there could be two
classes of seniors in America: those “aging
in place” voluntarily, and those “aging in
place” involuntarily because they can’t
sell their homes.
That all said given the current inventory of
homes on the market as well as the reason-
able interest rates and the quickly approach-
ing spring market. This may very well be the
perfect time to consider your next move.
38
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