In the next two decades, as millions of Baby Boomers in the U.S. put their homes on the market, there will be a serious downward pressure on home values as more and more “FOR SALE” signs go up. This is in addition to the recent decline in home values nationwide.
The trend has already begun. In six states there are already more sellers than buyers: Connecticut, New York (except Manhattan), Pennsylvania, Hawaii, North Dakota and West Virginia. Boomers were “an incoming tide for four decades. Now the tide’s turned, and it’s going to make it much harder for the housing market to rise,” says Donald Myers, professor at the University of Southern California and co-author of the study. The trend has been long anticipated, but Myers is the first to analyze buying and selling data, state by state.
Nationwide, the ratio of seniors to working-age people will increase by 67% in the next 20 years. As Boomers age, more will move to apartments, relative’s houses or assisted living centers. Those with two homes may sell one and retire to the vacation home. And when they pass on, many heirs will simply sell the properties.
Myers’ research, which included population and immigration projections from the U.S. Census, shows that the Baby Boom housing bubble will hit the Northeast and Midwest hardest. The math is simple: 79 million Baby Boomers have driven up housing demand. Now it’s peaked and in a matter of years many areas will see three sellers for every buyer.
If you’re a Boomer, or getting close to retirement and live in the Northern tier of states, especially the Northeast and Midwest…take action now!
It’s obvious you need to act, and quickly. You want to be one of the first out, not the last. And there are choices.
1. If you know where you want to go when you retire, and can leave a little early, do it. Waiting can cost you serious money.
2. Sell now and use all or most of the proceeds to buy where it’s warmer and rent a house, or an apartment, closer to work. Negotiate a lease for the period you’re going to being staying…2, 3 or even 4 years. Landlords are negotiable and a stable long-term lease beats having to put the property on the rental market each year. When winter gets to be too much, vacation in your soon to be retirement home.
3. DO SOMETHING NOW to minimize the chance that you will be selling when there are very few buyers. Remember, even though you may have to take less in the current down market you’ll be buying in a down market area, too. You’re trading $ for $.
“A year from now, you’ll wish you started today”