Many older baby boomers have been putting off moving for years now, due to weak housing markets, price declines and losses in their retirement accounts.
But as markets are beginning to recover, some may be unearthing their buried plans to downsize, move closer to their children or relocate to a warmer climate. Whether they ultimately make a move has a lot to do with their finances and where they live.
“I think people are sick of waiting,” said Jennifer Darby Metzger with ERA Justin Realty, in New Jersey. Even if conditions aren’t perfect yet, there will be some boomers who don’t want to wait forever and take the encouraging market signs as a cue to get moving.
“The recession is letting up and the housing inventory is going down,” said Rolf Pendall, director of the Metropolitan Housing & Communities Policy Center at The Urban Institute. Boomers are “selling into a market that doesn’t look so terrible compared with a year ago.”
But there are at least a couple of potential roadblocks to push boomers’ daydreams of moving even farther into the future.
Financial and confidence crisis
The financial crisis not only was a financial setback for some baby boomers, it also did a number on their confidence.
“Clearly, I think there are some baby boomers who are in the upper age range…who somehow have come through the financial crisis unscathed,” said Kelly Sweeney, chief executive of Coldwell Banker Weir Manuel in Detroit. “People in those cases are taking advantage of the market and are right-sizing, making a move from the family home to a condo” or smaller single-family home, he said.
Fewer people in the area, however, are living the lifestyle that the affluent there have been following for decades: Selling the house in Detroit for one home in a Northern Michigan community such as Traverse City or Charlevoix and another home in Florida for the winter, he said.
“Lots of baby boomers are not in the position they thought they would be in 10 years ago,” he said. For some, 401(k) savings have eroded, while others have lost jobs and have been unable to find employment to replace their incomes at the same level. They might be upside down on their mortgages, or have lost so much equity they’re afraid to buy again.
“Their confidence is lost. Their accounts had been so much more robust,” Metzger said. Some of those concerned their savings won’t last them as long as they live are moving into larger homes with their kids, she added. “They’re realizing: I don’t know if I can carry a house by myself.”
Future of local housing markets
Even if baby boomers do have the confidence to sell their home and buy another, the health of the market they’re in will partially determine whether they can pull it off. And the share of young people in the area, as well as strength of the local economy, will set the stage both now and in the years ahead, Pendall said.
Generally, where manufacturing has traditionally been a big part of the economy, including parts of Michigan and Ohio, more young people have been leaving the areas than moving in, he said. Fewer young people forming households in those places means reduced demand for housing. And boomers need someone to buy their homes for them to move.
Elsewhere in the country, in areas where the economy is more diverse, the demographic shifts may begin to help those in the market to sell.
For example, “the California, Arizona, Nevada and Florida housing markets are coming back because they have so many young people in those states,” Pendall said. “Investors are buying there because they know that [people] will need houses.”
No desire to move
Of course, while some boomers have designs on downsizing or moving to a warmer climate, many stay in the homes they’re in—by choice.
“Most people want to stay in their current home, and that’s what they do,” said Nancy Thompson, spokesperson for AARP. “That has been the pattern for decades, and it looks like for the most part, boomers will do the same thing.”
Before committing to staying in any home for your golden years, it’s a good idea to ask yourself a few questions first to determine whether it’s the best choice, Thompson said.
“Is your house going to work for you, or is your house going to disable you if you have some kind of chronic condition, and are you going to be able to get where you need to go if you don’t drive?” she said. “People outlive their driving years. We know that when you hang up your keys you are at risk of isolation.”
Those thinking about downsizing may consider transit-oriented developments, where public transportation is in proximity to homes, she said. If you’re staying put, know how you’re going to get around to the grocery store or doctor, whether it involves public transportation or assistance from family and friends.
Take on in advance any renovations that need to be made so that the home is comfortable for you as you age, including the addition of nonslip floors, lever handles, adequate lighting and an accessible bathroom on the main floor, should you need it, she said.