Real Estate Articles
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Baby Boomer Study Shows Changing Housing Needs
- April 1, 2007 in The Market
- Information collected from material written by Walter Molony from realtor.org
NAR President, Thomas M. Stevens, from Vienna, VA., said the survey shows most boomers want professional services when they buy real estate. Baby boomers expect professional real estate service and guidance from real estate agents and they value those real estate services. When buying a home, they want agents to represent their interests in the complex transaction process and when selling, they want help to establish the right asking price. Regardless of whether they're buying or selling, boomers want real estate agents to be knowledgeable, explain all of the complicated contracts, forms and agreements, to manage the closing process from start to finish and to negotiate on their behalf.
Most boomers in the survey were unsure of their financial future, with three-quarters saying they are not financially prepared for retirement and many expressing anxiety about their ability to retire. Some boomers said they might have to withdraw retirement funds for housing or real estate expenses.
The study shows that for the vast majority of baby boomers, retirement is somewhere off in the future. Considering that boomers are healthier than their predecessors and are more likely to work in an office setting, many of them may work five or 10 years beyond the traditional retirement age of 65.
Half of boomers who live in an urban area would like to retire in a small town or rural area. Their ideal location includes a lower cost of living, being near family, quality health care, better climate and being near a body of water. More than a third of all baby boomers want to retire in an urban or suburban setting, motivated by quality health care and cultural activities. Half of boomers said they would consider living in an age-restricted community.
It's a possibility that given a longer tenure in the work force, baby boomers may choose a larger real estate property than earlier generations. Boomers may want or need a somewhat larger dwelling that includes one or two home offices and a low-maintenance home on a single level.
Almost one in four boomer households have a high net worth of $500,000 or more and this ratio is expected to increase in the future as the generation ages. Virtually all high-net-worth households are homeowners (97%) and 47 percent are likely to also own other real estate in addition to their primary residence. More than a third expects to help children or grand children with a down payment on a home. Wealthier boomers want amenities where they retire, including cultural activities such as museums and art galleries, some new ideas, spa communities/condos. As a result, they are more likely to retire in an urban area or city.
Although most boomers are married couples and 27% have children under the age of 18, nearly two out of five baby boom households are nontraditional households, most of which are headed by women. Non-traditional households may have different needs and desires about where they want to live. For boomers with children, neighborhood schools are of obvious concern, but for those without children, security may be a bigger issue.
Twenty percent of boomer households are headed by women, but because women aged 60 to 69 account for a quarter of homeowners in that age group, the number of women boomer homeowners is likely to increase much faster than average as they age.
There's little doubt that the vast majority of baby boomers will delay retirement. Some will put off retirement because they have to, but many because they want to. Many will have a larger income stream to purchase possibly two homes, which they may use to move back and forth between their retirement life and their working life. Some of these intentions will of course more than likely change with circumstance and outside pressures.
