In the past, home builders and residential developers have taken solace in the fact that demand for 55+ homes and communities have stayed at a consistent rate. Upon reaching retirement age, homebuyers are often expected to sell their longtime properties in favor of downsizing or moving to their long-awaited dream location. And yet, as recent studies indicate, baby boomers, individuals born between the early 1940s and early 1960s, are proving to be an exception to this principle.
Rather than moving to sunny beaches or downgrading to a condominium, the largest generation of retirees in America’s history is doing just the opposite, with many saying that they’re staying put for as long as they possibly can.
Times Have Changed
The reason why baby boomers are staying in place has to do with just how much times have changed in just the last decade. While the recession ended years ago, some aspects of the economy are still recovering to pre-recession levels.
Baby boomers of today aren't moving as much those 10 years ago because they're working longer and their kids are moving out of the house at older ages. In 2016 the number of household heads over the age of 65 still in the workforce was at 19.3 percent and increased from 2005 when it was 15.9 percent.
In addition, over one-third of adult children between the ages of 18 and 34 are living with their parents. As a result, parents are left in a tougher position to decide to sell, especially if their kids are still a factor in their financial decisions.
Another thing to take into consideration is the community. Over time, communities become sources of support and engagement. Residents in communities are given opportunities to be close to friends and take part in activities or clubs. As such, it becomes more challenging to pack up and leave the comforts of the people and area that have played an active role in your life prior.
Baby Boomers Are Working Longer
The number of baby boomers in the workforce is projected to only increase. According to the Bureau of Labor Statistics, roughly 41 million Americans aged 55 and over will be working or actively seeking employment by 2024. An estimated 13 million of which will be over the age of 65.
There are a number of reasons as to why more baby boomers have decided to stay working. As opposed to the generation before them, baby boomers are healthier and have a longer life expectancy. Furthermore, changes to social security benefits and retirement plans have escalated the amount of money needed to retire, creating all the more reason to continue working.
Because they are staying in the workforce longer, many retirees aren’t downsizing until they reach their 80s. Many are holding out for as long as they can, only downsizing upon finding themselves unable to care for their homes due to health or other issues.
By staying in place, observers worry that baby boomers are taking valuable home inventory in high-demand markets from younger homebuyers. Because of their expansive numbers, there is little doubt that the decisions made by the baby boomer generation have the power to impact the nation's economic trends for generations to come. Only time will tell the true impact of their decisions.