Housing Market
Baby boomers might be older but they remain significant drivers that shape California’s housing market. As the retiring population in the state increases, let’s take a look at how this demographic affects how the real estate market will be in the near future. This article has a couple of interesting points.
- Although retiring baby boomers are likely to remain homeowners, it is expected a majority will relocate to smaller or more convenient abodes.Soon-to-be retirees (and not just in California) will remain homeowners in retirement. Some of these baby boomers opt to move from the suburb to the city, where a lot of amenities are located and easily accessible. Some opt to invest in homes in retirement and active adult communities. For those living in larger homes, these retirees might choose to downsize and relocate to a home that better fits their current and future needs.
This is one of the main reasons why retiring baby boomers will still prove to be a major force to be reckoned with in California real estate. Once they retire (or before they officially announce it,) they will purchase homes that fits their long-term plans.
- Baby boomers are more capable of owning property than millennials and first-time buyers.While millennials and first-time buyers struggle with paying off debts and making down payments on time, retiring baby boomers are more likely to be financially stable and capable to own a home. In addition to the equity they have accumulated in their homes, baby boomers are also likely to have saved up a considerable amount of money from their years in the workforce.
Since they will be aligning their new spending habits based on their current needs and living habits, a new window of opportunity for brokers specializing in single-family residences will open up and prove to be beneficial for California’s real estate market.
- Retiring baby boomers are far more likely to buy a retirement home than rent one.Although it’s not unheard of, it’s quite uncommon for retirees to rent a home where they’ll spend their golden to twilight years. Homeownership still remains the traditional and most practical course of action for this demographic. In fact, homeownership among the 75+ age group is comparatively higher than that of age groups under 50.
But where will they go? City living can be a convenient choice for retiring baby boomers looking to downsize from their suburban homes. Some move to an entirely new location with better climate and amenities. Moving close to family members is also an option. Moving to urban centers however seems to be the most popular route.
- More real estate developments will want to cater to the urban lifestyle.The younger generation isn’t the only demographic attracted to city living; retiring baby boomers are also drawn to it. Aside from proximity to family living in the city; there’s the ease of public transportation and access to a plethora of recreational opportunities.
As a result, experts predict that more real estate developers (particularly those that dabble in condos and apartments) will move to accommodate city living. Buying a condo, townhome or apartment is also a cost-effective route in downsizing among retiring individuals. This will also create opportunities for brokers and agents specializing in these property types.
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