Baby Boomers are a much-watched demographic in the real estate industry, because their habits and choices will create conditions for the next generation of homeowners and homebuyers. According to new data from the Demand Institute, a majority of them (63 percent) have every intention of remaining in their current homes. As the generation advances in years, less property turnover could create a rise in demand for residential real estate, spur development and freeze movement in existing properties as the Boomers advance in age.
In previous generations, the golden parachute of retirement meant relocating to warmer climates. Today, due to the recession, nest eggs have shrunk among Baby Boomers and so staying put could be the only option many of them have. Net worth among Boomers is down more than 25 percent, from over $200,000 before the economic downturn to a more modest $143,000 today. Americans between 50 and 69 also carry more than double the mortgage debt than the segment did in 1992. While some of that is accounted for by inflation, still more middle-aged people owe more money on their properties.
Jeremy Burbank, the vice president of the Demand Institute, said half of the average Boomer's assets are tied up in real estate, making it difficult for many of them to consider changing their living arrangement. A single person or couple who is not entirely ready for retirement might question the wisdom of restructuring their net worth by purchasing a new home, even if it's to downsize. In the survey, 42 percent of those who planned to move said they would downsize, leaving a majority searching for bigger or comparable places.
Furthermore, age and mobility-convenient housing was rated low among criteria those surveyed would look for in their next home.