It’s time to set the record straight: Baby Boomers are not the primary reason for the housing crisis. If you follow our blog and read our recent article which included the housing shortage tracker, you know that there is only one new housing permit issued for every 12 new jobs created in the San Francisco metro area. Yet time and time again you will see that more and more Baby Boomers aging in place and living alone are named as the reason why homes are in short supply. To help provide some fact-based perspective, here are 3 things you need to know about Baby Boomers and the current state of real estate.
#1: YES, it is true that Baby Boomers are staying in their houses longer and more independently than previous generations. However, they are also more likely to have an adult child still living with them at home than seniors did prior to the housing crash in 2008. Thus, they also need to keep their larger homes to support the 1 in 5 millennial Americans who are living with family, according to Zillow.
#2: NO, a recent Trulia study proved that seniors aging in place is not the reason why affordability is skyrocketing. In fact, the data determined that the cities where seniors occupy the most housing are actually the most affordable! Likewise, the most expensive cities in the nation do not have an excess of boomers who could downsize to smaller homes and ‘free up’ inventory in a manner that would anywhere near alleviate enough supply to match demand and reduce price acceleration.
#3: YES, it is an issue of land. Major cities are lacking land to build on, even assuming that construction companies could keep up with hiring needs and supply costs. As the New York Times has stated, “There is, simply put, a dire shortage of housing in places where people and companies want to live.’ The problem is more complex than a nationwide housing shortage – it is an imbalance in between where there is land to create housing and where there are plentiful jobs that people need to access. There are four million people and counting who spend at least 3 hours per day driving to and from work.
The housing inventory issue is no doubt a complex one, and we by no means intend to simplify it with the three bullet points above. But we hope these principles will provide some food for thought as to what factors play an even greater role in where our local markets are at today. For further reading, we recommend:
All my best,
NAR Instructor….“Designations Create Distinctions”
CIPS, SRS, ABR, CRS, SRES, GRI, CLHMS,
REI, AHWD, RSPS, MSLG
Bobbi Decker & Associates fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. For more information, please visit: http://portal.hud.gov/