Downsizing baby-boomers could end up causing real estate’s biggest leg-down of all.
from the N.Y. Times:
In the quaint central Connecticut town of East Haddam, Bill and Rose-Marie Evans built a theme park for their three children. Their property included a pool, a hot tub, a swing set, a trampoline, a paved basketball court and more than enough yard to host neighborhood soccer and kickball games.
They had expanded the ranch house they bought in 2001, turning it into a 3,000-square-foot home with room indoors for games like pool, table tennis and Foosball, making it a prime sleepover destination. “The master bedroom was on the first floor,” Mr. Evans said. “There were three bedrooms and a second family room upstairs. The kids had 1,200 square feet to themselves.”
But then in mid-June, the moving van arrived, and the Evanses left behind their own personal vacation land and squeezed uncomfortably into a 1,200-square-foot rental, while they began building a marginally bigger home. The couple had decided that with the economy uncertain, they had to conserve money and live more modestly.
Leaving the home they once believed would be theirs into retirement was a painful decision, one many baby boomer families are facing. It’s an issue that especially resonates in suburbia, where highly taxed, stressed-out parents wrestle with the prospect of moving sooner than they had planned. But children can be uncomfortable with decisions that change their notions of security, and their unhappiness forces parents to consider what they do — or don’t — owe their offspring.
“We always believed that was going to be the place we would come back to with our own kids for Christmas and Thanksgiving,” said Andrew Inman, 19, who, along with his sister, Brittany, 17, is Mrs. Evans’s child from a previous marriage. “We kind of felt lied to.”
Baby boomers are already driving a new market for smaller, less expensive homes, according to Stephen Melman, the director of economic services for the National Association of Home Builders in Washington. In a recent member survey, 59 percent of builders nationwide said they were planning to or were already significantly downscaling from the McMansion era.
“Many boomers seem to be thinking they are going to do it eventually, they may as well do it now while they need the money for tuition or because there’s just less money available,” Mr. Melman said.