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Category Archive: ‘Boomers’

Boomer Liquidation Sale On Hold

The baby boomer liquidation sale has failed to materialize….so far.  Boomers are holding onto their old homes longer, and living the good life instead:


Baby boomers are not leaving the homes they own to settle into apartments, as housing economists had predicted.

A new edition of Fannie Mae Housing Insights says that boomers are not responsible for a recent surge in the apartment market. But when they do finally downsize, the very size of the generation will be enough to “move markets.”

Predictions were that boomers, the generation born between 1946 and 1965 (some sources say 1964), would begin downsizing naturally as they became older and more frail. “The research showed that the likelihood of Baby Boomers occupying single-family homes has changed little in recent years, despite the factor that boomers are experiencing major life changes that might be expected to cause a downshift in their housing consumption,” the Fannie Mae article said.

Instead, through 2013, boomers had not significantly reduced the rate at which they live in single-family, detached houses, the agency said. And although the number of rooms in those houses has decreased in recent years, “boomer home size has increased since then, suggesting the boomers are not trading down to smaller single-family homes, either.”

The article added that the “number of boomer apartment dwellers has not budged in recent years, whereas the number of millennials in multifamily rental units has grown by nearly half a million annually.”

That’s a significant finding with big implications for the housing market, because “boomers have an enormous residential footprint.” Some 40 percent of the nation’s homes are occupied by boomers, who have “half of the nation’s housing wealth,” Fannie Mae said.

As baby boomers move into their retirement years, they’re having a major impact in other ways, too.

“After working most of their lives, Baby Boomers want it all in retirement: travel, dining out, owning two cars and multiple homes. And they want to do this off of income generated by their investments,” said a recent article in Wall Street Daily. “Yet you’d be amazed how many people go to see an advisor with far too little in savings or investments to enjoy that sort of retirement. Even those people who have enough assets often have them allocated extremely poorly.”

Some boomers have accumulated no savings for retirement, the article said.

Read full article here:


Posted by on Aug 31, 2015 in Boomers, Jim's Take on the Market, Market Conditions, Thinking of Buying?, Thinking of Selling? | 11 comments

Baby Boomers Downsizing?


The baby boomer liquidation sale isn’t panning out just yet.  There are boomers buying a bigger homes to house multiple generations, and there are those who want to enitce more visits from the grandkids.  From

Homeowners’ post-recession fling with smaller dwellings has fizzled, and Baby Boomers aren’t downsizing as expected.

Real estate site Trulia found that 43 percent of more than 2,000 online survey respondents want “somewhat” or “much” bigger homes than their current residences. This might be expected among younger adults with growing families — more than 60 percent of respondents under 35 want a bigger home — but even their parents still feel cramped.

Although Boomers are most likely to be satisfied with the size of their current homes, the conventional wisdom that these empty nesters would downsize to smaller homes later in life turned out to not be the case. “It is a bit contrary,” said Trulia housing economist Ralph McLaughlin. “According to our survey, we are finding that almost as many of them want larger homes.”

While 21 percent of Baby Boomers want a smaller house, the highest percentage of any age bracket, the number who still want to go bigger is five percentage points higher. Last year, Fannie Mae noted that Boomers displayed no hurry to trade in their houses for retirement condos.

“It is pretty surprising,” McLaughlin said, adding that there are probably multiple explanations for the enduring preference for bigger homes. Retiring Boomers may be moving out of urban areas and into communities where they can get more square footage for their money. They might want larger spaces so their kids and grandkids can come visit without feeling cramped.

Or, they might not want to give up their toys just yet. “It could also be the case that Boomers are also going to stay more active and need space for all the activities they stay engaged in,” McLaughlin said.

Posted by on Mar 10, 2015 in Boomers | 17 comments

Surge of Boomers Retiring

Did everyone have a nice day off?  Great, let’s get back at it! From John Burns:

More people were born in the 1950s (41 million) than in any other decade, and they are dropping out of the workforce in droves. Those born in the 1950s will begin turning 65 in 2015. In fact, in the last 10 years, we have transitioned from roughly 2.5 million US residents per year turning 65 to 3.5 million per year, and that number will trend up to almost 4.5 million by 2025 before it starts trending down again.

boomers graph

This seismic shift will have a huge impact on the economy, as the traditional working age population of 20-64 will transition from growing 1.0 percent per year for decades to growing 0.25 percent per year. 20- to 64-year-olds earn and spend the most, so you can almost guarantee that the economy will grow more slowly than it has in the past.

While the economic growth will  be slower than usual, and the burdens on Social Security will skyrocket, entrepreneurial opportunities will abound to serve an unprecedented surge in retirees who, by the way, also happen to be the most affluent retirees ever.

My big idea for 2015 is to plan for a slower growing pool of workers and to take advantage of the surge in retirees, no matter what your  business.

Here is a nice clip from CNBC discussing the success home builders are having targeting retirees, even in non-traditional retirement markets such as Atlanta:

Posted by on Dec 26, 2014 in Boomers, Market Conditions | 10 comments

Born To Be Wild?


Doesn’t there have to be a segment of baby boomers who are looking for adventure, and want to head out on the highway?  If so, will the warmer-climate San Diego be a net gainer, or loser?  If there is a senior exodus to free up money and lifestyle, it would make sense that the more-expensive areas like Southern California would see more seniors leaving.

From the

When is a house your safe haven and when is it standing in the way of richer life experiences?  That’s the question more and more retirees are asking these days.

Take Barbara and Mike West and Joseph and Phyllis Applebaum, retirees and longtime Maryland residents.

After years of analyzing their financial situation, the Wests decided to put the mortgage-free suburban house they had owned for 26 years on the market. They wanted to avoid the mid-Atlantic winters and considered moving to Hawaii, where they had lived while Mr. West was in the U.S. Navy.

But they decided it was too remote. They also ruled out San Diego, Savannah, Ga., and Charleston, S.C. Florida, they decided, was a possibility.

They considered renting their Maryland house out for part of the year, yet the idea of storing some of their household goods and someone else sleeping in their bed changed their minds.

Of the decision to sell a mortgage-free home, Barbara West, 63, said it would give them a chance to dream and to explore. Besides, “It’s a lot of money locked up in the house,” said Ms. West, who retired from her job as a lobbyist two years ago. “It’s a nice side benefit. It will free up money. We’ll have more flexibility. We’re kind of looking at it as an adventure.”

Read full article here:

Posted by on Dec 19, 2014 in Boomers | 8 comments

Boomers Upsizing

From MND:

An excerpt:

A survey of attitudes toward housing released on Thursday by The Demand Institute indicates that the Baby Boom generation still has no intention of aging gracefully.  In fact, when it comes to housing it appears few intend to yield at all to their advancing years.

The Institute, a nonprofit run by the Conference Board and the Nielson ratings people, surveyed 4,000 households last year in which residents qualified as members of that huge post-war generation born between 1944 and 1963 about their future housing plans.

The survey found that as a group Baby Boomers had a median net worth of $200,000 in 2007 and were on their way to accumulate nearly $370,000 by 2013.  Instead the recession sent many off the rails and at the time of the survey that median net worth was down to a median of $143,000.  Although many Boomers have delayed or modified their plans due to the recession they have, the Institute says, not abandoned them entirely.  Over the next five years it is expected they will spend $1.9 trillion on new home purchases and $500 billion on rent.

Read full story here:

Posted by on Nov 2, 2014 in Boomers | 5 comments

Estate Sales

We’ve explored a few of the alternative groups of potential sellers, but none are emerging as major contributors.  In a ‘normalizing’ market, it means we are back to the Big 3 sources of new listings; Death, Divorce, and Job Transfer.

Carmel Valley doesn’t have much to worry about here – the oldest CV homes were built in the mid-1980s.  But in the remaining areas of San Diego’s North County coastal region, where houses go back to the 1940s and 1950s, there are many long-time owners who will stay for the duration.

Back in the old days, it was routine to sell your parents’ home and split the proceeds with the siblings.

But that was when everyone could afford their own house.

Today, one of the siblings might want, or need, to take possession because they can’t afford these prices.  As a result, what used to be a steady flow of new listings may not be as fruitful as before.

It will be relative to the quality of the home.

Yesterday I was in Oceanside, where a past client had purchased in the 55+ community of Oceana.  I had sold her house about 10 years ago, and she moved there with her husband thinking it would be the final stop.  It was for her husband, but now she needs assisted living, so she is exploring those facilities.

Oceana is an average senior community – the homes are 1,000sf to 1,600sf and sell in the $200,000 and $300,000s.  Sales are increasing – here are the number of closed sales between Jan 1 and Sept 30:

2010: 57

2011: 57

2012: 50

2013: 69

2014: 66

There are 22 active listings today, which is no shortage of supply is you are thinking of living there, and it is an affordable option.

But in the swankier parts of town, when a homeowner dies, their home is more likely to stay in the family today just because the siblings having such a difficult time buying their own home.

The condition of these homes is usually less than spectacular, and those that do come up for sale will be great flipper food.  You’ll see more of them in areas where homes were built in the 1960s and 1970s, because those original owners have had no better place to live for the money!

Posted by on Oct 29, 2014 in Boomers, Jim's Take on the Market, Market Conditions | 15 comments

Boomers Not Saving

Though we have reverse mortgages available, you can’t help but think we’ll be enduring a baby-boomer housing liquidation sales event over the next 10-20 years.  I think it’s already underway, and disguised as those wanting to “downsize and travel a bit”. 

Hat tip to daytrip for sending this in from Wells:

Saving for retirement is a formidable challenge for middle-class Americans, with 34% not currently contributing anything to a 401(k), an IRA or other retirement savings vehicle, according to the fifth annual Wells Fargo Middle-Class Retirement study.

Forty-one percent of middle-class Americans between the ages of 50 and 59 are not currently saving for retirement. Nearly a third (31%) of all respondents say they will not have enough money to “survive” on in retirement, and this increases to nearly half (48%) of middle-class Americans in their 50s.  Nineteen percent of all respondents have no retirement savings.

On behalf of Wells Fargo, Harris Poll conducted 1,001 telephone interviews from July 20 to August 25, 2014 of middle-class Americans between the ages of 25 and 75 with a median household income of $63,000.

Sixty-eight percent of all respondents affirm that saving for retirement is “harder than I anticipated.” Perhaps the difficulty has caused more than half (55%) to say they plan to save “later” for retirement in order to “make up for not saving enough now.”  For those between the ages of 30 and 49, 59% say they plan to save later to make up retirement savings, and 27% are not currently contributing savings to a retirement plan or account.

Sixty-one percent of all middle-class Americans, across all income levels included in the survey, admit they are not sacrificing “a lot” to save for retirement, whereas 38% say that they are sacrificing to save money for retirement.

While a majority of middle-class Americans say that they are not sacrificing a lot to save for retirement,  72% of all middle-class Americans say they should have started saving earlier for retirement, up from 65%  in 2013.

When respondents were asked if they would cut spending “tomorrow” in certain areas in order to save for retirement, half said they would: 56% say they would give up treating themselves to indulgences like spa treatments, jewelry, or impulse purchases; 55% say they’d cut eating out at restaurants “as often”; and 51% say they would give up a major purchase like a car, a computer or a home renovation.  Notably, fewer people (38%) report that they would forgo a vacation to save for retirement.

Read full article here:

Posted by on Oct 23, 2014 in Boomers, Jim's Take on the Market | 35 comments

Baby Boomers

From John Burns:

It’s here. Every month, more than a quarter million Americans are turning 65.  Almost 80 million Baby Boomers, born over a span of 19 years, are shifting gears towards retirement…or whatever else is next.

Here are a few facts:

  1. The Boomers are the largest group of shoppers looking for a home today nationally, based on our Consumer Insights survey.
  2. They were waiting for their home equity to come back, based on our survey in 2012. Now, they have equity in their pockets and they are ready to move.
  3. More than 10,000 of these Boomers are turning 65 every day. This will continue well into the next decade.
  4. They are working longer and living longer.
  5. The Boomers are the most likely to report that they cannot find what they are looking for in today’s existing housing stock.

Of the 22,000 home shoppers who took our 2014 Consumer Insights survey, 42% of them are 55+ and shared with us that:

  • Home design will make them move (it is the third-most-important motivator for moving after location and price), but 55% say they can’t find what they are looking for.
  • 43% want to downsize, with most wanting 1,500–1,999 square feet.
  • Among those without children:
    • 46% want to live in a community that is more multigenerational
    • 33% want an age-restricted community
    • 21% want an age-targeted community

    (Preference for age-restricted and age-targeted communities varies widely by geography.)

The opportunities offered by the 55+ population are huge. They represent:

  • 25% of the total population
  • 50%+ of current homeowners (likely with plenty of equity) and have a homeownership rate in excess of 75%
  • 30%+ of total home transactions

All of these rates are only getting bigger.  The challenge is that the 55+ homeowner population tends to stay in place—less than 3% move per year, although it is higher for the younger portion of this cohort.

Posted by on Sep 26, 2014 in Boomers | 8 comments

73% Don’t Want to Move


Hat tip to daytrip:

An excerpt:

Where are all these old folks going to go? They’d like to stay at home. Today, most older residents live in single-family homes that they own: More than 70 percent of residents in their 50s own their homes, and homeownership figures rise for populations into their early 70s. A survey conducted by the AARP finds that 73 percent of respondents ages 45 and older would strongly prefer to stay in their homes.

They may not have much choice. As Emily Badger explained last year, senior Boomers looking to sell the detached single-family homes that characterized the overwhelming majority of housing construction between 1990 and 2010 may have a hard time selling to Millennials. Many young renters who can afford mortgages just can’t get them; others prefer new options in the city to single-family homes in the suburbs, including condos.

Increasingly, the housing stock built by and for Baby Boomers doesn’t meet anyone’s needs—neither a younger generation looking for starter homes that don’t exist, nor an older generation confronted by accessibility challenges. And a growing share of older households is struggling with high housing costs and mortgage debt, challenges usually associated with Millennials and Gen-Xers. More than twice as many seniors age 65 and older carried mortgage debt in 2010 than did in 1992. Some 21 million older adults are renters.

While affordability is a problem on the horizon for some older residents, accessibility challenges are virtually guaranteed for all. While increased life expectancy and a factor that the U.S. Department of Housing and Urban Development cites as “compression of morbidity” means that older generations (even beyond the Baby Boomers) are living actively later into life, disability eventually affects almost everyone. One of the great equalizers in life, disability arrives without any deference to income or race. (Privilege in these realms often makes it easier for people to adjust to disabilities, of course.)

The housing stock built for Baby Boomers largely wasn’t designed with accessibility in mind. There are five universal-design housing features that tend to address a variety of disabilities that residents face as they age: no-step entries; single-floor living; switches and outlets set at lower heights; extra-wide hallways and doors; and lever-style doors and faucets. Nearly 90 percent of existing homes have one of these features, according to the report—but just 57 percent have two.

Homes built more recently are more likely to accommodate all five universal-design features. Among these universal-design features, the one that’s most common in homes today is the single floor. More than 86 percent of homes in non-metro areas features single-floor living. These figures for cities and suburbs are high as well: 74 and 72 percent, respectively.

Yet these detached, single-floor, single-family homes—and the automobile-centric society that comes with them—are only going to fall further out of step with the needs of residents over time. And sooner rather than later. Homes can be retrofitted with lever-style handles and no-step entries (albeit at great expense). It’s much harder to turn exurban and rural communities where older Americans live into places that nurture seniors rather than isolate them.

Read full article with graphs here:

Posted by on Sep 21, 2014 in Boomers | 2 comments

Bubble Or Sustainable?

The folks at like to poll their audience, and last month they used a blog post in one of their surveys.  Their readers voted on this question:

Is the increase in real estate value a sustainable trend?  Home prices have increased substantially in the last year compared to the previous seven years.  Is the increase a sustainable trend, or just a miniature housing bubble?!/poll/773

Chris says 55% of respondents believed another crash was going to come, with more Republicans strongly believing in a crash.

Those who voted for another crash may have been influenced by the opposing blog post to mine, which talked about the millenials facing a weak job market, and shrunken workforce in general.

This was his summary paragraph:

With investors fleeing the real estate market because of higher interest rates, with fewer people working and those that are working are earning and saving less, who is going to be able to buy houses in sufficient volumes to keep the real estate “recovery” going? It doesn’t matter how low interest rates are if people don’t have the incomes, savings or credit to buy homes. Rising interest rates can only make a bad situation worse.

My rebuttal, which, like my blog post, pertains to our local market:

  • Investors fleeing?  Supply evidence please, or is that just a guess?  I still get emailed every day by investment groups wanting me to send them deals.  If there are fewer investors buying, it’s because there are fewer deals, which would mean prices are holding up or going higher – too high to make sense for flippers.  Investors are supplying the floor to the market.
  • Unemployment has been terrible, with little or no improvement in the last few years – yet our real estate prices have gone up 20%.  Apparently, the local real estate market is NOT influenced by unemployment.
  • Savings or credit?  You can obtain an FHA loan up to $697,250 with 3.5% down payment and a FICO score as low as 580.  PacTrust Bank will give you a 30-year fixed rate around 5% even if you have had a short sale in the last year.  Most anyone can get a mortgage if they want it bad enough.

Even if it’s not as bad as he says, we keep hearing how ‘demand has been pulled forward’.  If so, it’s a good question – who will be the future buyers?

The future buyers will be the first-timers and others who want to finance their purchase, especially with a lower down payment, who have been shut out by the big-money investors and cash buyers in general.  This future-buyer pool will likely have a limit on their resources, so the appreciation trend will probably moderate, and prices will fluctuate from area to area.

But with a county population of 3.14 million people, we don’t need everyone in the pool – we only sold 3,466 homes in the county last month.  You could exclude 90% of the population from the market and we’d still have enough demand…at least until the baby-boomer liquidation sale starts around 2020.

Posted by on Sep 10, 2013 in Boomers, Bottom Talk, Double Dip, Forecasts, Jim's Take on the Market, Market Conditions | 15 comments