There are currently around 78 million baby boomers. According to a survey by the AARP, 87% of baby boomers said they wanted to stay in their homes upon retirement, so they can be near family and friends and remain a part of the communities they have been in for so long. The idea of staying in their homes is referred to as “aging in place” and is receiving support from the federal government in an effort to reduce medical costs across the board.
However, the remaining 13% (10+ million baby boomers) do want to move. If there is a place that offers more of what they want — travel, better accessibility, activity groups, or to be closer to family — they aren’t afraid to make the commitment to pack it all up and move. This group of baby boomers has surprising diversity in what they’re looking for in a new home.
Some want big, some want small
According to a national survey conducted by Trulia, 21% of baby boomers want a smaller house. They want to reduce the amount of time and money they spend on home maintenance, and they want to pay off their mortgages. According to a survey of 6,000 adults by Merrill Lynch, the average homeowner age 65 and older has about $200,000 in equity in their home, which is typically their largest asset. Many boomers want to free up that equity for travel, hobbies or savings for unexpected future expenditures.
At the other end of the spectrum, 26% of baby boomers said they wanted a bigger home than the one they are leaving. This group has no problem taking out a new mortgage on a home. While this trend does seem counterintuitive, it supports another Trulia study conducted in 2014 that found that the amount of baby boomers and retirees living in multi-unit housing has continued to decrease.
The Trulia study also found that 53% of the 2,000 boomers polled said they were already living in their ideal size home. In essence, the majority of baby boomers that do want to relocate will be looking for the same size home or something bigger, with only that small 21% looking to downsize.
Location and convenience
After living and working in a car-dominant society for the past forty or so years, many baby boomers are seeking out the walkable neighborhoods of their youth. Retirement communities, such as Arizona’s Sun City or Saddlebrooke, offer just that—a resident can walk, bike or take a golf cart down to the shops, restaurants, gyms and pools. For those that choose to live in a high-rise retirement community, amenities and shops are often available on the ground floor or throughout the complex. The availability and proximity of services are a big draw for baby boomers, be it in a small town, a tidy inner-city neighborhood, or a planned retirement community.
Do your homework
The main thing to remember about baby boomer real estate is that this group can be unpredictable. Some want bigger, some want smaller; some want to move to the country while others run straight for the city. If anything, the clearest defining factor of this market segment is that they can’t be stereotyped. As with all clients, ask lots of questions and get to know their unique needs – you may just be surprised by them.
What activity are you witnessing among baby boomers in your real estate market? Share below.
This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.
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