Cities where boomers can walk to the movies or dinner can rely on public transit to access other parts of downtown. For some older adults, this can be a perk.
By: Peter Galvin
Retirees only make up .5 percent of people who are moving in this country, according to U.S. Census Bureau data. However, their changing preferences for relocation are poised to drastically affect the housing market in urban and suburban areas alike. Baby boomers are increasingly moving to the city, and while this may be fun and convenient for older adults, it’s posing challenges for families and young people as they attempt to compete for urban housing with more affluent older adults.
Urban Locales Lure Boomers
More and more boomers are choosing an alternate sort of retirement in their empty nest days: an urban lifestyle. Folks who moved to the suburbs to give their children a good school system and a large backyard now find they may not need these amenities at their age. Urban areas with walkable amenities are luring boomers looking to downsize from a large, multi-bedroom home. In cities, boomers can walk to the movies or dinner, and they can often rely on public transit to access other parts of the downtown area. For some older adults who may be reluctant to drive at night, this can be a perk.
For seniors who have paid off all or most of their mortgage, selling a home frees up equity that can be used to fund an urban move, pay for a retirement lifestyle and help support adult children. Cities may bring lower real estate costs, depending on the family’s home location and value, and can lessen an older adult’s dependence on a car. It’s worth noting here that car insurance prices may rise when adults move to cities with higher crime or accident rates than their tranquil suburban homes. However, many older adults can find special deals on auto insurance, according to The Hartford.
As older adults move to cities, they can drive up the price of real estate for others. According to the National Association of Realtors, the median price point for condos alone has risen 15 percent from June 2012 to June 2013. The National Association of Realtors did not break down what demographic changes were behind the rising condo price point, however.
The Fate of the Suburbs
According to the American Housing Survey, 80 percent of homes built between 1989 and 2009 were single-family homes, many over 2,500 feet. Now, 25 percent of families looking for homes want something smaller than a single-family home, the American Housing Survey finds. Plus, boomers looking to downsize from so-called “empty nest homes” are seeking something smaller. With reduced demand for single-family homes and increased demand for condos, townhouses and other alternatives, the suburbs as we know it face a shift.
While many older adults feel they can take care of their home as they age, they may not be prepared for the realities of trying to maintain a home and yard. When they want to sell and downsize, there may not be as good of a market for their homes. In the worst case, this means empty, unsalable houses in subdivisions and money tied up in equity that is worth less and less.
About the Author:
Peter Galvin is a retired auto mechanic who’s making a second career out of blogging.
Photo: Ed Yourdon