Aging baby boomers and their echo boomer children will significantly impact trends in the nation's housing market over the next 20 years, according to a study released by the Bipartisan Policy Center. The study, entitled "Demographic Challenges and Opportunities for U.S. Housing Markets" and conducted by researchers at the National Association of REALTORS®, The Urban Institute, and the University of Southern California, analyzed key demographic trends and their likely influence on housing and homeownership in the U.S.
Over the next two decades, the aging baby boomer generation will increase the nation's senior population by 30 million and this demographic shift will likely help increase the supply of housing. The echo boom generation, on the other hand, includes nearly 65 million people born between 1981 and 1995. "The Northeast and Midwest are most likely to see a large number of older homeowners selling their homes to younger homeowners as the baby boomers age," said NAR Chief Economist Lawrence Yun. "This increased supply could mean additional buying opportunities for echo boomers. That generation will absorb 75-80 percent of the available inventory of owner-occupied housing by 2020."
By the same token, these findings underline the need for a new direction in urban planning. As America's population ages rapidly, planning now for senior-friendly communities makes perfect sense and would benefit all ages, the local economy and environment, Don Weden, a retired Santa Clara County principal planner, told members of the Silicon Valley Association of REALTORS® at their meeting in Menlo Park last summer.
Weden cited a study that projects California's population would increase 26 percent to 10 million more people by the year 2030. He noted the 65 years and older group will see a large increase in both Santa Clara and San Mateo counties, where one out of four adults will be seniors. This means boomers who once drove the real estate market will reach a crossover point and exhibit different buying behavior, such as selling their home and downsizing. The projected demographics also bring home the reality that the suburban model may no longer be practical.
"Our land use patterns will significantly affect the quality of life of seniors, particularly if they are unable to drive or choose not to drive. We will need to make our cities more senior-friendly," said Weden.
Weden told REALTORS® cities need to recognize transportation needs and create green neighborhoods that are convenient, vibrant, diverse, sustainable, and urban settings that are high density, mixed-use, transit-oriented, walkable/bikable and synergistic. The planning needs to start now because land use takes time to evolve, according to Weden.
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