- December 10, 2019
- Posted by: Hanson Law Firm
- Categories: Real Estate, War Story Wednesdays
Baby Boomers have been getting a bad rap for a while now, but Millennials’ better get ready to eat crow, ‘cause the second greatest generation’s preparing to open up the gates to homeownership by dying en masse.
According to research by Zillow, the U.S. is on the cusp of a flood of homes for sale. Baby Boomers approaching 60 or over that hill own about 27% of all home supply in the country, and over the next twenty years, more than a quarter of those are expected to go on the market, as owners pass away or move to assisted living facilities. That’s around 21 million homes. To put it into perspective, during the last housing bubble, only 450,000 new home sales were closed per year, on average.
Experts (and their media acolytes) are calling this phenomenon the Silver Tsunami. Houses are expected to trickle onto the market in the early 2020s, gaining momentum along the decade and into the 2030s. This could be part of the solution to the worsening housing crisis we’re seeing all around our great nation, and I can think of one group who might be pretty pleased.
Millennials and homeownership are a notoriously difficult match. According to ValuePenguin, the Twitter generation accounts for only 9.8% of all homeowners nationally, an 18.5% drop from eight years ago. Of those who do manage to find a place, 63% expressed some regret about the deal, underestimating the hidden costs and maintenance.
The Silver Tsunami could open up a lot of new possibilities, though the Millennial tendency towards congregating in bustling metropolitan areas might throw a wrench in the plan.
It might surprise you to know that old folk like a bit of peace and quiet. Though this flood of housing is sure to occur, the most affected areas will be the Florida retirement hubs, Tucson, or other de-facto elder islands like Palm Springs, the Hamptons, or Nantucket. Areas of fast growth and vibrant, busy life like Dallas or Atlanta – often cheaper to live in and favored by the younger crowd – are unlikely to see much of a ripple. However, homes in fairly good condition will still be available, and turning them into multi-unit properties might bring the price into an attractive range that could make leaving the city center worth it, especially given that a lot of these seniors bought their places when they were still more subURBAN than SUBurban (meaning they’re not too far from areas of interest, and… look. Just roll with it).
From 2007 to 2017, 730,000 homes came onto the market every year courtesy of senior citizens. That number’s expected to go up to 920,000 until 2027, and 1.17 million from then to 2037. Bearing in mind that people are having less kids, that could mean a fair few houses for a potentially smaller population. You’ll have to think long-term and be innovative if you wanna be a successful Silver Surfer, but the payout could be worth it for you – and future generations.