As baby boomers retire, home markets will hurt - USATODAY.com
As baby boomers retire, home markets will hurt
By Noelle Knox, USA TODAY
The next housing downturn is already on the horizon — and it looks like it's going to be a long one.
In the next two decades, as millions of aging baby boomers put their homes on the market, they'll put downward pressure on prices, and their exodus will reshape neighborhoods and cities coast to coast, according to research released Wednesday.
BIG ADVANTAGE: Older boomers caught all the breaks
In some states, the trend has already begun, making it harder for areas to recover from the real estate recession, which isn't expected to bottom out until the second half of this year at the earliest.
There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away.
FIND MORE STORIES IN: William Frey
Boomers were "an incoming tide for four decades. Now the tide's turned, and it's going to make it much harder for housing markets to rise," said Dowell Myers, professor of policy, planning and development at the University of Southern California and co-author of the study. The trend has long been anticipated, but Myers is the first to analyze buying and selling, state by state.
Nationwide, the ratio of seniors to working-age residents will increase by 67% in the next 20 years. As boomers age, more will move into assisted-living centers, apartments or relatives' houses. Those with two homes may sell one and retire to their vacation house. And when they pass on, many of their heirs will sell the properties.
Last hit should be warm-weather states, such as Florida, Arizona and Nevada, where retirees usually sell late in life. That's good news for homeowners in those states, where prices and sales are reeling from the collapse of the real estate bubble.
Myers' research, which included population and immigration projections from the U.S. Census, shows that the baby boom housing bubble will hit the Northeast and Midwest hard.
"It's most pertinent to declining parts of the country," said William Frey, a demographer at the Brookings Institution who agrees with Myers' conclusions. "The glut of homes on the market from baby boomers will depress the housing market and have an impact on some suburban neighborhoods that will come to look like older city neighborhoods that have undergone blight and disrepair."
The math is simple: 79 million boomers have driven up housing demand. That trend will reverse itself when boomers are age 65 to 75; there will be three sellers for each buyer, Myers says.
He and Frey say governments need to help create jobs so young adults and immigrants can buy homes.
REAL ESTATE CROSSOVERS
(go to the link to see your state)
As baby boomers retire, home markets will hurt
By Noelle Knox, USA TODAY
The next housing downturn is already on the horizon — and it looks like it's going to be a long one.
In the next two decades, as millions of aging baby boomers put their homes on the market, they'll put downward pressure on prices, and their exodus will reshape neighborhoods and cities coast to coast, according to research released Wednesday.
BIG ADVANTAGE: Older boomers caught all the breaks
In some states, the trend has already begun, making it harder for areas to recover from the real estate recession, which isn't expected to bottom out until the second half of this year at the earliest.
There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away.
FIND MORE STORIES IN: William Frey
Boomers were "an incoming tide for four decades. Now the tide's turned, and it's going to make it much harder for housing markets to rise," said Dowell Myers, professor of policy, planning and development at the University of Southern California and co-author of the study. The trend has long been anticipated, but Myers is the first to analyze buying and selling, state by state.
Nationwide, the ratio of seniors to working-age residents will increase by 67% in the next 20 years. As boomers age, more will move into assisted-living centers, apartments or relatives' houses. Those with two homes may sell one and retire to their vacation house. And when they pass on, many of their heirs will sell the properties.
Last hit should be warm-weather states, such as Florida, Arizona and Nevada, where retirees usually sell late in life. That's good news for homeowners in those states, where prices and sales are reeling from the collapse of the real estate bubble.
Myers' research, which included population and immigration projections from the U.S. Census, shows that the baby boom housing bubble will hit the Northeast and Midwest hard.
"It's most pertinent to declining parts of the country," said William Frey, a demographer at the Brookings Institution who agrees with Myers' conclusions. "The glut of homes on the market from baby boomers will depress the housing market and have an impact on some suburban neighborhoods that will come to look like older city neighborhoods that have undergone blight and disrepair."
The math is simple: 79 million boomers have driven up housing demand. That trend will reverse itself when boomers are age 65 to 75; there will be three sellers for each buyer, Myers says.
He and Frey say governments need to help create jobs so young adults and immigrants can buy homes.
