Baby Boomers are reaching retirement age. If they move and where they go could have a profound impact on the housing market.
“As we see the transition of the large Baby Boomer generation age into retirement,” says Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors (NAR), “It will be interesting to see if they move in with their Millenial or Gen Z children or stay put in their own homes.”
Multi-generational homes are rising in popularity, but they are not for everyone. Heating and cooling the large family homes may not be cost effective. For many Boomers, downsizing is the answer.
“Sometimes moving into a smaller house is the best option for new retirees,” says Antonella Dininno, Sales Associate at ERA Justin Realty, “It could cost you less in utility bills, upkeep, and property taxes making your fixed monthly income go farther.”
“Another reason downsizing is more cost effective for Boomers is the record-level equity they likely have in their home,” says Jennifer Darby Metzger, Broker/Owner of ERA Justin Realty, “Leveraging that equity could even eliminate a mortgage on their retirement home altogether.”
Boomers could find some unlikely competition when shopping for a smaller home, their own children or grandchildren. “Your final home could be a starter home for a Millenial or Gen Z home buyer,” says Dininno, “With housing inventory still low nationwide, Baby Boomers should expect some competition in a lower price range.”
Another thing Boomers should keep in mind when packing up their family home is that it’s going to take some time. “The contents of a 4 bedroom isn’t going to fit in a two bedroom. You’re going to have to downsize your belongings, too,” says Metzger. “Perhaps consider giving some of that furniture to one of those Millennials or Gen Z’ers who is just starting out.”
A real estate professional like Antonella Dininno or any of the agents at ERA Justin Realty are here to help with the overwhelm that can come with downsizing. Give us a call at (201) 939-7500.