News
March 10, 2019

Boomers put pressure on housing market - Realtors® are paying attention

By KAREN RANDOLPH

Rarely a day passes when a story about demographics does not show up in news feeds. Most of the time, Millennials are in the crosshairs. Many take satisfaction in knowing the oldest Millennials are nearing 40, but that is another story.


KAREN RANDOLPH
2019 NETAR President

All this attention on generational preferences has special significance in the real estate industry. Realtors® and lenders have wrestled with the Millennial’s college loans and their tardiness in entering the housing market for quite a while.

Although it may seem a little strange during the era when the media’s obsession with the wants and quirks of the generations of young people continues playing out, there is a growing group of Realtors® paying close attention to the challenges, needs, and demands that an aging population will have on the market. It is of special interest here in Northeast Tennessee and Southwest Virginia.

The rating agency, Moody’s, recently sounded an alarm about the aging trend worldwide by pointing out in a couple of years there will be 13 “super-aged” countries. The benchmark is set at the point where more than one-in-four residents are 65 or older. Our region has stepped over that club’s threshold.

Moody’s interest is mostly economic effects. Their vice president and one of the authors of the report said yesteryear’s size and influence of the Baby Boomers of the world that fueled growth has mutated into a demographic tax that will lower economic growth. There is another side to the story. Here are some baseline numbers that set the stage of the influence of the aging trend.

Several studies report Baby Boomers will control 70 percent of all U.S. disposable income over the next five years, and women will hold the purse strings in many cases – most cases when the decision is about housing.

As a group, elders are not only the dominate segment of home owners; they are also real estate investors in both the residential and commercial markets.

According to the National Endowment for Financial Education, 59 percent of Baby Boomers who are parents are financially supporting their 18-to-39-year-old offspring. 

Many seniors have assumed the primary rearing responsibilities for their grandchildren. The youngest Boomers will be 55 by the end of this year, and roughly 10,000 will celebrate their 65th birthday each day.

Almost half of the households in our area receive a Social Security check every month. When totaled, those checks equate to approximately $200 million a month.

Coming hand-in-hand with the aging trend is a host of new housing market demands to accommodate elders and an aging population. There is a growing preference for one-level, smaller homes, and universal design as well as co-living arrangements and multigenerational households. Home health aides and adult day care are also issues.

Some Realtors® have, and more are readying themselves for the increasing impact by earning a Seniors Real Estate Specialists (SRES®) designation. The decision involves an extra course of study, passing the exam and becoming part of an SRES network. What they get back is the training, knowledge, and affiliations to meet the special needs of maturing resident when selling, buying, relocating or refinancing residential or investment properties.

This example is one of the designations and certifications professional Realtors® pursue to better serve the special interest and needs of their clients. During the coming month’s we will explore some of the others, but for now, the focus is on the aging demographic.

Realtors® and those with an SRES® designation have already learned what many other professions are still coming to grips with. Working with this segment of clients involves a lot more than just the basics of the transaction. Realtors® are ahead of the curve because generational marketing and preference trends have always been part of the National Association of Realtors® training and monitoring efforts.

 

 

 

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