Baby Boomers finding it difficult to downsize

Fifteen years ago or so the trend in warm climates such as Texas, Arizone, North Carolina, Florida etc. was for new retirees (mostly Baby Boomers) to advertise their success in life by building huge 5 or 6-bedroom homes. This, of course, was a time of easy credit and real estate was booming.

These days, of course, everything is different. Keeping up with maintenance is very costly and the owners are that much older. Even more challenging is the fact that these large homes are proving to be very difficult to sell. Younger buyers aren’t interested in these mansions, opting instead for more modest homes. A recent survey revealed that more than half of would-be buyers are looking for homes priced $200,000 or less.

In Scottsdale, Arizona there are currently 349 homes valued at more than $3 million on the market with many being listed at discounts of up to 50 percent.

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Baby Boomers: Downsizing but still spending

It’s estimated that approximately 10,000 baby boomers turn 65 and move towards retirement every day – and will be doing so until 2030. And, while they still possess a significant economic clout, boomers are adjusting their lifestyle to fit their current needs.

More often than not, this means downsizing – do they really need that 3-car garage or the large library. While the homes may be getter smaller, they’re still upscale – stocked with all the amenities and conveniences.

Finally, more retirees are now renting. In the last 13 years, rentals of family homes have increased from 9 million to well over 43 million. Many are finding they’ve had enough of ownership, the goal now is experiencing.

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What Do Baby Boomers Want?

A new survey polling homeowners between the ages of 53 and 71 reveals that proximity to food is a prime consideration for these Baby Boomers. Proximity to a neighborhood grocery store ranks number one while the availability of nearby restaurants is listed as number two.

Keeping active is also important with nearby fitness centers and walking trails ranking high although golf courses only came in at number 49.

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It’s Up To Mom

According to a recent article in The New York Times the average American lives only 18 miles from their mother with only 20 percent living more than two hours from their parents.

The article, by New York Times staffers Quoctrung Bui and Claire Cain Miller goes on to say, “Over the last few decades, Americans have become less mobile, and most adults – especially those with less education or lower incomes – do not venture far from their hometowns.”

Analysts see this trend continuing as baby boomers get older and require more care from their adult children as well as two-income families needing more help with child care.

Looking to buy? Better ask Mom, first.

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Baby Boomers Not Downsizing – Or Selling

Leave it to the Baby Boomers to do things their own way – this time in the real estate. Contrary to earlier generations, who typically downsized as they neared retirement age, this group is staying in the family home much longer.

What’s the big deal? By holding on to their homes they’re contributing to the low inventory of available real estate, thus driving up prices.

And the effect is compounded by the fact that by holding on to their homes, they are driving up prices for those smaller homes that Baby Boomers might prefer. Thus, those who do actually want to downsize and sell find that they literally can’t afford to do so.

But analysts point out that the Baby Boomers will not own this vast inventory – 32 million homes – forever and, eventually, change will come.

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Baby Boomers Staying Put

According to The Demand Institute, Baby Boomers – the post World War II generation – are not moving from the suburbs to cities, are not selling their homes in favor of renting, and are not planning to move away from family to warmer climes. They are staying put (“aging-in-place”) for a variety of reasons, a major one being that many lost a considerable portion of their retirement wealth.

The report added that, rather than down-sizing many are looking to increase the size of their homes snd insist on remaining near children and grandchildren.

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