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Five years ago, Zillow released a report forecasting the silver tsunami, a wave of baby boomers that would put their homes up for sale, flooding the market. The original prediction called for more than 27% of owner-occupied homes to be up for sale by 2037.
So far, the silver tsunami hasn’t even created a ripple. While existing home inventory is rising, it has remained below historical levels. Instead, seniors are staying put, choosing to age in place.
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A study by Clever Real Estate found that 61% of boomers currently own homes, and 54% plan to spend the rest of their lives in them. Only 15% plan to sell in the next five years and another 15% say they may sell within five to 10 years. Circumstances such as illness or financial concerns could prompt them to sell. Still, overall, many older people are planning not to move, meaning that inventory may stay low across many markets for a long time.
Boomers cited financial security and a stable home life as reasons for staying. Aging in place is not without concerns; 90% of those surveyed were worried about maintaining home repairs. If they do sell, they expect big profits: 65% expect to profit more than $100,000, and 40% are looking for $200,000 or more. However, even that financial incentive is not enough to prompt a move.
Complicated Attitudes Around Homeownership
Boomers were born into a favorable time for owning a home. Prices were reasonable, and wages kept pace with the cost of a home. The study found that half boomers bought their first home for $75,000 or less, and 64% paid less than $100,000. Only 6% of boomers said homes were too expensive when looking for their first home. Surprisingly, 42% of boomers believe younger generations had it easier when buying their first home, and 64% believe younger people could be homeowners if they were more responsible.
The study also looked at boomers’ regrets about homeownership. Of those who never owned a home, 66% regret it. However, 47% of those who sold their homes say they wouldn’t recommend homeownership to younger generations. Of those who currently own a home, 46% said they would consider themselves a failure if they had never owned a home.
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Is Aging In Place Realistic?
A study from Redfin earlier this year tracked similar data, showing that many boomers remain in place because their homes are paid off and they have no reason to move. While aging in place is the goal for most seniors, they may not be factoring in the possibility of declining health.
Research from Harvard’s Joint Center for Housing Studies indicates that nearly 70% of adults will need long-term care services. Paying for that care may prompt some to invest their savings or opt for a reverse mortgage. Only 14% of seniors can afford a daily home health care visit and housing costs. Of those surveyed by Clever Real Estate, 16% said they could not afford assisted living or a retirement community, and only 19% think they will move into a retirement home if they sell. Genworth estimates the monthly median cost for home health care to be $6,292, cheaper than a nursing home or assisted living facility, but it still represents a significant financial burden.
As the U.S. population ages, boomers’ attitudes may shift. The oldest boomers are in their late 70s. As they enter their 80s, retaining homeownership could be a less realistic goal for some. For now, however, boomers and their homes are staying put.
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This article What Silver Tsunami? Baby Boomers Plan To Never Sell Their Homes originally appeared on Benzinga.com
Source: finance.yahoo.com