Study: Baby boomers downsizing into millennial territory
- Retiring baby boomers are downsizing and snatching up urban housing at twice the rate of their millennial counterparts, crowding the younger demographic out of the market, The Washington Post reported.
- People ages 55 and older account for 42% of the rise in renter households over the past decade, according to the Harvard University Joint Center for Housing Studies. The trend is driving up prices of rental units, pushing a previously affordable option for millennials and less wealthy boomers further out of reach.
- There are 70 million baby boomers — a group second only in numbers to the millennials — and they are retiring at 10,000 per day, the Post reported. Their numbers are large enough to drive trends in the real estate market, and developers are beginning to design specifically for the boomer market.
The boomer-fueled rebound in apartments and condos is transforming the overall real estate recovery, according to the Post, as boomers aren't downsizing on the cheap. Many are selling large, expensive homes but still want a spacious feel to their new, smaller digs.
"Boomers will pay a premium if you can give them exactly what they want," Matt Robinson, principal at MRP Realty in Washington, told the Post. "Something closer to what was in their house, and that pushes up the price; they’re happy to pay for it."
That desire for high-end housing could have negative implications for younger, first-time homebuyers seeking more affordable properties. With such high demand from baby boomers willing to pay top dollar, builders can often find more success in the luxury market, rather than with entry-level homes.
A large segment of older baby boomers hasn’t quit working, so the move to urban areas is not just about retirement, according to the Post. It’s about a lifestyle change that frees owners from the responsibilities and expenses of larger homes, while still allowing them to live in a more social environment that was once the purview of a younger segment of the population.
WashingtonPost.com: Millennials’ top competition for condos might be their parents