The baby boomer generation may trigger the next housing market crash as soon as 2020, according to an article from The Atlantic Cities, and it could translate to aging in place for a lot of older homeowners whether they want to or not.
When downsizing boomers begin selling their homes for more affordable residences, housing supply is expected to hit the market in the millions.
This will create two classes of seniors in America, suggests Arthur Nelson, director of the Metropolitan Research Center at the University of Utah: Those who wish to age in place voluntarily, and those who involuntarily age in place because they cannot sell their homes amid the increasing supply.
By 2020, there will be around 35 million over-65 households in the U.S., projects Nelson. By then, he calculates, senior homeowners who want to be renters will be trying to sell about 200,000 more owner-occupied homes than there will be new households looking to buy them.
Those units could rise to a half a million housing units a year by 2030, he says.
“If there’s 1.5 to 2 million homes coming on the market every year at the end of this decade from senior households selling off, who’s behind them to buy them?” Nelson said in The Atlantic Cities article. “My guess is not enough [buyers].”
Demographics will complicate supply/demand fundamentals even further, the article suggest, as the American education system hinders quickly-growing minority populations from earning the income needed to buy these homes.
“Between changing preferences and declining median household income because of poor education— because we’re not willing to spend money on education, that means we can predict the next housing crash, and that’ll be in about 2020,” Nelson says.
Aging in place will not be feasible among 90-year-olds, Nelson suggests, as these people realize that they cannot perform household duties like mowing the lawn or pay for repairs.
His suspicion is that “hundreds of thousands, maybe millions of those households in the 2020s to 2030s and beyond” will simply give up the house and walk away.
Written by Jason Oliva