Navigating the Boomer Migration: A Gentle Shift in Housing Dynamics

Are you familiar with the term "Silver Tsunami" that's been circulating lately? If so, it's important to understand the facts behind it. This term alludes to the notion that a substantial number of baby boomers will simultaneously move or downsize. The concern stems from the potential repercussions of a sudden surge in homes hitting the market, which could significantly impact the housing landscape. The fear is that this influx would intensify competition for smaller homes, disrupting the delicate balance of supply and demand and ultimately affecting home prices.

However, there are a couple of flaws in this line of reasoning. Let's dissect them and alleviate any concerns you may have.

Not All Baby Boomers Plan To Move

For starters, plenty of baby boomers don’t plan on moving at all. A study from the AARP says more than half of adults aged 65 and older want to stay in their homes and not move as they age (see graph below):

While it’s true circumstances may change and some people who don’t plan to move (the red in the chart above) may realize they need to down the road, the vast majority are counting on aging in place.

As for those who stay put, they’ll likely modify their homes as their needs change over time. And when updating their existing home won’t work, some will buy a second home and keep their original one as an investment to fuel generational wealth for their loved ones. As an article from Inman explains:

“Many boomers have no desire to retire fully and take up less space . . . Many will modify their current home, and the wealthiest will opt to have multiple homes.”

Even Those Who Do Move Won’t Do It All at Once

While not all baby boomers are looking to sell their homes and move – the ones who do won’t all do it at the same time. Instead, it’ll happen slowly over many years. As Freddie Mac says:

We forecast the ‘tsunami’ will be more like a tide, bringing a gradual exit of 9.2 million Boomers by 2035 . . .”

As Mark Fleming, Chief Economist at First Americansays:

Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”

Bottom Line

If you're stressed about a Silver Tsunami shaking the housing market overnight, don't be. Baby boomers will move slowly over a much longer period of time.

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