As Baby Boomers and Generation Xers continue to age into their senior years, we’re seeing some interesting housing trends develop. Many wish to “age in place.” This means staying in their longtime family home or moving to a smaller place, but still in the same general neighborhood. This puts a crunch on local real estate markets as demand from younger families grows. People aren’t willing to move out, so nobody new can move in.
Even those retirees who want to move to a more senior-friendly community in a different location are experiencing challenges right now. There is a swelling demand because of the massive size of the baby boomer generation, followed by all the Gen-Xers who will be ready to retire in the coming decades. It’s getting harder and harder to find accessible, safe and affordable housing when living on a fixed retirement income.
Senior-Headed Households
Harvard University recently posted a very interesting article about this topic. We’d like to share some interesting data, as well as our own thoughts as a real estate team dealing with many senior home buyers in sellers in our local market. Harvard’s Joint Center for Housing Studies (JCHS) is predicting that the number of households headed by a homeowner over the age of 80 will be around 17.5 million by the year 2038. This represents roughly 12% of all households in America, which is more than double what we saw just five years ago in 2018 (8.1 million).
Age in Place vs. Move for Retirement
The same housing experts predict more than half of these households will feature an adult over the age of 80 living alone. Loneliness and isolation can be key contributors to health risks. Those opting to age in place may be doing so because they have a local support network of family and friends. Technology can also play a role in helping age-at-home seniors, who are able to stay connected and get access to resources using the Internet (video conferencing with doctors, online ordering and delivery of medicine, social media connections with friends and family anywhere in the world, etc.). Others may be better off moving to an area with more senior care amenities. Again, that could be easier said then done with such high demand in these desirable senior-friendly markets.
Affordable Housing Concerns
Perhaps the biggest challenge facing retirees in the future will be affordability. Not only have home prices gotten higher. So too have mortgage rates and general living expenses as a result of inflation. It’s hard to predict exactly what will happen with our economy over the next couple of decades, but this is definitely a serious issue for the immediate future. Many people simply cannot afford to move. Meanwhile, those who want to age in place are struggling to keep up with rising expenses on a fixed income.
Having a lot of home equity built up can help, especially if the property is fully paid off. This will provide homeowners with more options, whether they want to stay put or move to a more affordable living situation.
Evolving Real Estate Trends
Another trend we saw grow during the pandemic was multi-generational households. Families moved in together. Living spaces were converted into more accessible places for parents/grandparents. The pandemic changed the way a lot of people looked at housing needs as work-at-home opportunities also increased. We have seen the demand for houses with home offices, home gyms, and additional senior-friendly living spaces increase in recent years.
As more people decide to age in place, younger generations may find more challenges finding homes in family-friendly neighborhoods. Home may still be occupied by the older homeowners who continue to live there as long as they can.
Our Real Estate Perspective
We find this research interesting, and you can read the full article here. However, we don’t see it as negatively. We believe there is a right time and place for everyone to make a move. Whether you are buying your very first house, moving up to grow your family, or downsizing for retirement, you can find a good solution with the right planning and preparation.
Sure, there may be challenges to be faced and overcome when buying or selling a home. This is true no matter what the market conditions are. Some markets favor sellers. Others favor buyers and it continually flips back and forth as time rolls on. The important thing to do is to understand the market and get yourself ready to make a move when the time is right (financially and emotionally). This is how you make better real estate decisions and turn these challenges into opportunities.
If you are thinking about buying or selling a home in Southeastern Pennsylvania or Northern Delaware, please contact The Cyr Team today. Let us help guide you through today’s complex real estate market and make the homeownership decisions that are best for you and your family.