Curious what the Baby Boomers have been up to? Not much, when it comes to their homes.
Baby Boomers are laying low and staying put, many in homes they have lived in for more than a decade. Because Baby Boomers are healthier and living longer lives, they are choosing to downsize much later than previous generations, Realtors say.
“The lack of action by Baby Boomers is causing a disruption in the food chain – one of the real causes of inventory shortage in today’s market,” said Pat Riley, CEO of Allen Tate.
That’s assuming Baby Boomers downsize at all. Of the 75.4 million living Baby Boomers born between 1946 and 1964, 63 percent have no plans to move again, according to a study by the Demand Institute, a non-partisan think tank that studies where consumer demand is headed.
Then, too, their children—the Millennials—are living with parents longer. The Demand Institute, which is operated by The Conference Board and Nielsen, says the number of households headed by someone 50 or older has grown the fastest as the overall population ages. Meanwhile, most new households being formed are renter households.
The Demand Institute says Boomers will spend a whopping $1.9 trillion on new home purchases, but only $500 billion on rent in the next five years.
Baby Boomers have been on a wild ride financially, so staying put probably feels like the right thing to do. Their wealth grew tremendously throughout the 1990s and early 2000s, before falling dramatically during the financial crisis. Had growth in net worth continued its pre-2008 trajectory, the typical Boomer household would have a net worth roughly 2.5 times what it is today. Although many have delayed or modified their plans, post-crisis, they have not abandoned them entirely.
As household formation strengthens and returns to previous levels, the report projects that demand for rental housing will continue to lead the way, and that the home ownership rate is unlikely to revert to previous highs seen during the housing boom in the early 2000s.
By not downsizing, they’re keeping inventory low among move-up houses. “They’re staying in houses that are traditionally too large for them, which keeps inventory down,” said Lance Carlyle of Carlyle Properties in Cornelius.
Some of it has to do with the time-honored view of real estate as a good investment over the long term.
And while a majority of Boomers have no moving plans, Riley urges them to have a plan for their home – to keep it updated.
“The time will comes when the Boomer either wants or needs to sell. Homes that have been kept updated and current will sell much faster and at a higher value than homes that have been allowed to remain the same and are dated,” said Riley.
A 3,778 square foot home on a third of an acre at 21324 Olde Quarry Lane in the gated Shadowcreek neighborhood has sold for $775,000 after being listed by Neal Crites of Crites Properties. The house, which was on the market for four months, has a professional chef’s kitchen, Peruvian hardwoods, marble baths and a three-car garage. Outside there are waterfalls, a fire pit and a fireplace. The selling agent was Sherry Hickman with Iverster Jackson
A large home in the gated Pine Creek neighborhood has sold for $850,000 after being listed at $859,900 by Heather Waterman of Key Real Etate and Alan Overcash of Overcash Real Estate. The house, which sits on an acre of property, has a tax value of $923,210, according to Cabarrus County records. The two-story home, with a finished basement, has a total of 6,200 square feet of living area. The home has Sub-Zero appliances in the kitchen, an upstairs library and travertine tile in the master bath and rear patio, which is covered and has a wood-burning fire place. Sarah Moore of Southern Homes of the Carolinas represented the buyers. The house was on the market almost seven months.
Two adjoining waterfront lots with a total of 3.6 acres off Alcove Road have sold for $3.15 million. Lance Carlyle of Carlyle Properties had the listing, which went under contract in less than three weeks. Karen Miller of Charlotte-based Dickens Mitchener represented the buyer.