Baby boomers, the generation born between 1946 and 1964, will continue to be a pillar of the housing market, according to a 2014 California Association of REALTORS® "2014 Baby Boomer Survey."
Although nearly half (46 percent) of baby boomer renters who previously owned a home sold it primarily due to financial reasons, the vast majority still have a strong desire to purchase a home. The survey found 63 percent of boomer renters would be motivated to buy a home if they saw an improvement in their finances, affordable home prices, or other reasons. Moreover, 22 percent said they expect to buy a home in the next five years.
"Baby boomers are the wealthiest generation and the first to drive the housing market. According to the U.S. Census Bureau, there are approximately 8.6 million baby boomers in California. Along with millennials, we will continue to see baby boomers play a major role in the housing market. Despite their financial difficulties they recognize the benefits of homeownership," said Chris Isaacson, 2015 president of the Silicon Valley Association of REALTORS®.
Baby boomer renters who previously owned a home are also in a better financial position to purchase a home, having a higher average annual household income ($78,570) than those boomers who have never owned a home ($39,825).
Nearly half (45 percent) of boomer renters have previously owned a home and are more likely to buy again than those who have not owned before by about a two-to-one margin (31 percent vs. 17 percent).
The state Realtor survey also found:
• Nearly all homeowners (92 percent) have equity in their home, but 77 percent said they don't plan to use the home equity for income during retirement.
• More than half of homeowner boomers (59 percent) don't plan to sell their home when they retire, with 78 percent of them indicating they won't sell because they like their current home.
• Out of the 10 percent of current homeowners who plan on selling their home when they retire, nearly half (47 percent) plan to downsize to a smaller home, and 44 percent plan to move out of California.
• Despite the recent economic recession, only one in four baby boomers had to postpone retirement. On average, they plan to retire in nine years, with 67 percent saying they plan to retire within 10 years.
• Three in 10 baby boomers live with their children, with 2 percent saying they moved in with their children; 8 percent of them saying their children moved back in with them; and 21 percent saying their children never moved out. The majority of those living with their children live with adult children mainly due to their children's financial troubles. Baby boomers pay for a majority of living expenses, with their children only contributing a median of $325 monthly for living expenses.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.