Interesting fact about Baby Boomers and Real Estate… that Baby Boomers own a whopping 38% of the real estate in the country and more than half of them (according to a recent study) aren’t planning on selling any time soon.
Will Baby Boomers be selling soon?
The big question is will baby boomers be selling soon? Most likely the answer is no. Why is that? There are a couple of reasons. More older people have made arrangements to age in place and their mortgages are at historically low interest rates that make moving into a smaller home with a more expensive loan less enticing.
What would make Baby Boomers move?
The real question is what would make baby boomers move from where they are into another property (most likely downsizing). Interest rates would have to make the move financially appealing to them as so many of them locked in great rates. It’s not that the market values would have to drop as that would decrease the amount of profit and therefore decrease the desirability of a move.
Traditionally, those over the age of 75 have declining rates of homeownership but it doesn’t look like this generation will be observing that trend.
What is the impact on the market?
To dig deeper into what is the impact on the market, one has to look at inventory past and present. Currently, there is a shortage of inventory with less than 6 months inventory on average around the country. This means that prices will stay higher and that buyers will either have to pay the higher prices or wait until there’s a shift in either the market or interest rates.
There is good news though. New construction has increased dramatically which means there will be new opportunities for homebuyers. Single family construction increased almost 16% and building permits have increased 5% to 1.48 million.
Thinking of buying or selling in Naples? While it’s not possible to “time the market” we can give you good information so that you can make a decision on when it’s a good time for you to buy or sell. Give us a call at 239.293.0246 and we’d be happy to help.
