Aging Boomers to Cause 'Epic Transition' in Housing Market

"About to wreak havoc on the housing market are the 78 million American baby boomers who will 'retire, relocate, and eventually withdraw from the housing market,' according to report authors Dowell Myers, a professor of urban planning and demography in the School of Policy, Planning and Development at the University of Southern California, and SungHo Ryu, an associate planner with the Southern California Association of Governments."

"Using demographic data to show that individuals in their mid-60s tend to sell more often than buy, the authors contend that when boomers — a 'dominant force in the housing market' — start reaching the age of 65 in the year 2011, a market shift will occur. Some retirees will be looking to downsize, others will relocate to warmer climes, while others will move to nursing homes, says Mr. Myers. As they transition out of the housing market or look to sell their homes, in some states there will be 'more homes available for sale than there are buyers for them.' Home prices will soften."

"The report points out that the ratio of those aged 65 and older to working age (25 to 64) adults will increase by 67% between 2010 and 2030, and that when these older adults try to sell their 'high-priced homes' to a 'relatively smaller and less-advantaged generation' — a cohort whose buying power was diminished through the housing boom’s price increases — there will be more homes for sale."

From the abstract:

"The retirement of the baby boomers could signal the end of the postwar era for planning, and reverse several longstanding trends, leading decline to exceed gentrification, demand for low-density housing to diminish, and new emphasis on compact development. Such developments call planners to undertake new activities, including actively marketing to retain elderly residents and cultivating new immigrant residents to replace them."