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Rescuing Real Estate: How Baby Boomers Are Reigniting the Housing Market

Newsweek, 11/4/09

Abstract:

The battered housing market is getting some help from an unlikely source: retirees. Baby boomers on the cusp of collecting Social Security are bringing some much-needed vitality to the real-estate sector as they capitalize on reduced prices and low mortgage rates by lining up their next homes a few years early.

Before the crash, older home-buyers were already big players in the real-estate market, and now their influence is growing. According to the National Association of Realtors, people over 55 bought 21 percent of the homes that were sold in 2008, up from 13 percent in 2001. Now, roughly one out of every four baby boomers owns either a vacation home, land, or a rental property in addition to the home that they live in. And some shoppers are looking for transitional homes that they can vacation in now and settle into when they are ready to retire...

...Baby-boom retirees and pre-retirees who are in the market seem to be considering the effort and expense involved in managing a property. They are looking for something different their second and third time around. They want single-story houses, smaller floor plans, and some amenities aimed at older home purchasers, such as nonslip floors, larger medicine cabinets, and lower kitchen cabinets, according to recent surveys by the National Association of Home Builders and the MetLife Mature Market Institute. They don't seem to care as much as builders for much-hyped universal design features like lever-handle doorknobs and wider doors and hallways, perhaps because they are concerned about costs, or in typical baby-boomer fashion, they are resistant to seeing themselves as aged or infirm. That may also be why today's newest retirees also seem less likely to prefer age-restricted communities than their already-retired predecessors.

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