Boomer Housing Sell-off the Next Housing Crisis?
Posted On March 12, 2013
A lot has been written about the effects of Baby Boomers retiring en masse over the next couple of decades – on employers, on markets, on healthcare, etc. Now, a new analysis from the Metropolitan Research Center suggests that aging Boomers selling off their homes will lead to the next big crisis in the housing market.
Over the last few decades of the 20th Century, Boomers drove demand for single-family homes and accounted for most of that market. As they retire, they will begin to sell those homes but the market for them will be considerably smaller.
First, the generation just behind the Boomers, Generation X, is smaller in size. Next, both Gen Xers and Millennials are less keen on single-family homes than their Boomer parents. Many more of them are interested in urban condos and town houses than previous generations. Finally, those younger generations have less wherewithal to buy a first home, especially the Millennials, who otherwise would have the demographic weight to generate some demand.
The study projects the effects to be felt beginning around 2020. “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 off,” said one researcher, “who’s behind them to buy? My guess is not enough…. That’s going to hit us. Not right now. But my guess is that about the turn of the decade”