Baby Boomers’ housing future
By Melissa Wirkus
The Baby Boomers population is often times a very important
factor in a lot of
real estate research because of its large size.
The size of the Baby Boomer population is very large
so researchers need to look at it considerably since
it will undoubtedly have a tremendous effect on the
housing and real estate markets, whether it is positive
or negative.
But as this generation continues to age, new reports
suggest that this may not have a positive effect on
the overall housing market.
A December 3, 2006 article by Bob Tedeschi of The New
York Times, “The graying of the housing
market,” discusses some things that may happen
to the regular housing markets in the future as this
group ages.
“As baby boomers age, younger generations will
have to pick up the slack in areas like health care
and transportation. Now a new study suggests that younger
people could face a profoundly different housing market
as well, if their parent’s habits are consistent
with those of past generations.”
“Late last month, the Mortgage Bankers Association
in Washington released a report conducted with the Brookings
Institution showing that aging baby boomers, generally
defined as those born in 1946 through 1964, will probably
cause stagnation in many housing markets, particularly
in the suburbs.”
This is because as the Baby Boomers age, they are more
likely to stay in the same spot and not move.
Areas that have a large concentration of relatively
young Baby Boomers could experience some stalling in
their housing markets in the future because many houses
will be neither bought nor sold.
“Baby boomers are moving into age groups where
they’ll be much less mobile, said Michael Fratantoni,
a senior economist at the Mortgage
Bankers Association. With that aging-in-place phenomenon,
portions of the country that are not used to having
large senior populations will gray very quickly.”
“According to the study, homeowners are less likely
to move after they reach 50. About 27 percent of the
people age 25 through 30 move in a given year. By contrast,
fewer than 10 percent of those 50 and above move at
all, and fewer than 5 percent move to a different state.”
Most of this is expected to take place between 2010
and 2030, and the effects will be felt between this
time span. By the year 2030, the entire Baby Boomer
population will be 65 years old.
Obviously, the effects of these aging boomers will be
felt differently depending on the specific area.
“All states will have growth in older homeowners,
of course, and those that have traditionally attracted
retirees, like Florida and Arizona, will have a higher
percentage of the elderly than other states.”
“But even in the suburbs of the New York metropolitan
area, homeowners will see differences. Suburbanites
in the New York region already face relatively high
costs of living, Mr. Fratantoni said, and paradoxically,
those with the resources will be more likely to move
to lower-cost areas. As a result, the senior population
will still grow, but to a lesser extent than in other
states.”
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