There may be an abundance of available homes in some major metro markets over the next two decades, driven in part by the wave of aging baby boomers. Whether all these boomers will be able to find buyers for their homes — and then make the move to senior living communities — is an open question.
That’s according to a new analysis from online real estate and rental marketplace Zillow. The analysis examined some of the largest metro markets in the U.S. to gauge how the baby boomers will affect the housing market.
About 730,000 U.S. homes belonging to people age 60 or older hit the market between 2007 to 2017. That number is set to rise to 920,000 between 2017 and 2027, and then to 1.17 million per year between 2027 and 2037, according to Zillow.
By 2037, more than a quarter (27%) of today’s owner-occupied homes will be available for purchase. All told, more than 20 million homes are expected to hit the market through the mid-2030s.
Some markets with a large population of older adults — such as those in Florida and Arizona — may see a more severe housing glut than others.
The metro area that covers Tampa, St. Petersburg and Clearwater, Florida, is estimated to see 15.2% of homes currently occupied by older adults released to the market by 2027, and 33.2% released by 2037, according to Zillow’s analysis. Similar trends could play out in Tucson and Nogales, Arizona, an area that’s estimated to have 14.8% older adult-occupied homes released to the market by 2027, and 32.6% released by 2037.
Other areas aren’t expected to see nearly as much of a surge in homes being put on the market. The Salt Lake City metro area is expected to have 8.3% older adult-occupied homes hitting the market in 2027, with 19.6% hitting the market in 2037. And the metro area that includes Austin, Texas, is estimated to have 7.7% older adult-occupied homes on the market in 2027, and 19.8% in 2037.
These trends could impact the senior living industry. Already, baby boomer home-sellers are seeing tepid interest from younger buyers. Some industry insiders — like Rick Exline, director of life plan communities at Des Moines, Iowa-based Life Care Services — fear that a housing glut, coupled with a lack of younger home-buyers, could impede boomers from selling their homes and moving into senior living.
“Millennials are living differently, the next generations are living differently, there may not be the need for the house in the suburb to raise my family,” Exline told Senior Housing News in March. “So, 10 years out, I think we’re going to have an issue with individuals who want to retire and move to senior living, and where’s the market to buy their homes?”
Still, much remains to be seen over the next 20 years.
“Whether this housing is appropriately located, priced and styled to meet future demand will be an important factor in how it pairs with new construction to alleviate today’s housing shortage,” the Zillow analysis concluded. “It seems likely that the construction industry in the coming two decades will place a greater emphasis than before on updating existing properties.”