A recent study from the University of Arizona predicts that millions of homes owned by Baby Boomers will become unsellable—or sold at significant losses—between now and 2040 due to a shift in housing demands among younger home buyers. Real estate investors should act now to help mitigate and balance what may become a critically mismatched housing market.
solution is facilitating the purchase of homes from seniors to groups who would turn those homes into rental homes. Ultimately, the reality is that no policies exist to facilitate the changes ahead. How should residential real estate investors interpret this information? Residential real estate investors are posed to be able to reduce the impending shock of too many seniors trying to sell their homes to too few younger, uninterested buyers, and we should take action now. •
them, opting instead for smaller homes in walkable communities instead of larger lots in distant sub- urbs. Studies show that the younger generations are looking for town- houses and smaller lots in areas that are bikeable and walkable. This is coupled with the fact that the newer generations are a lot smaller than the Boomer generation—there won’t be enough of them to buy all the homes that the Baby Boomers want to sell. The market is simply not sufficient for millions of Ameri - ca’s senior households to sell their homes. This mismatch will lead to an excess number of homes trying to be sold relative to the demand. Nelson suggests a couple of pos- sible solutions to help cushion the economic blow to the millions of seniors who will eventually be trying to sell their homes. One suggested option is to offer the senior home- owners money to sell their homes to federal agencies, who would raise the homes, tear them down and reassemble land into larger open- space areas. Another suggested
them at significant losses. At the crux of the matter is a mismatch in home-buying behaviors by young- er generations leading to a severe imbalance of supply and demand by housing types. Baby Boomers have been the most influential generation on land- use patterns and housing demand in the history of the country. The very concept of suburbs started with their housing demand, since the cities had no room to accommodate the massive numbers of families with children. But as the Boomers get older, their housing demand is changing from large homes and large lots to smaller homes or assisted living communities. Each generation has its own hous - ing demand characteristics, both as they age and as their preferences change. And although millions of Baby Boomer homes are on track to be offloaded, the tens of millions of Millennials and members of Gener- ation Z looking for homes either may not be able to afford Boomer homes or simply will not be interested in
Ben Rao is an author, serial entrepreneur, business coach and real estate investor with nearly 20 years of experience in technology and real
estate investment. He is a partner in multiple national companies that service the senior industry and the author of Paying For Long-Term Care: The Essential Guide to Understanding and Funding Senior Care. Ben is also the co-founder of Mom’s House, an innovative residential real estate investment platform that assists residential real estate investors in connecting with the families of seniors transitioning into long-term care. To learn more, visit www.momshouse.com.
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