By Kathy Canavan Special to Delaware Business Times When baby boomers who answered a recent national housing survey were asked when they planned to move out of their homes, 61 percent replied “never.” Boomers own ...
By Kathy Canavan Special to Delaware Business Times
When baby boomers who answered a recent national housing survey were asked when they planned to move out of their homes, 61 percent replied "never." Boomers own 32 percent of Delaware's owner-occupied homes.
With boomers aging in place and the Gen X and millennial generations both shopping for homes, the Delaware real estate market is coming to a crossroads.
Real estate agents say inventory is tight in several tiers of the market. One is the tony 19806 and 19807 ZIP codes, where boomers can afford to renovate their homes and hire help to allow them to age in place.
"If you gave me 10 houses in the range of $600,000 to $900,000 in the 19806 and 19807 ZIP codes, houses that don't need a lot of renovation, they are all going to be sold," said Laird Bunch, president of Brandywine Fine Properties/Sotheby's International in Centreville. "I've got three, four, maybe five buyers right now who
are looking for that kind of thing, but it's just not there."
Mia Burch, a Long and Foster agent, said boomers don't like the options available to them if they sell their houses. "None of the boomers like to hear what they should do or not do. Their generation has lived their lives freely. It's hard for them to change their house to some condo where you have like two bedrooms and you're so restricted," she said.
Burch said the starting price for over-55 communities is $400,000 in northern Delaware and around $350,000 in Middletown. "The cost of building materials has skyrocketed with the hurricanes and the Chinese tariffs and all that," she said. "It's not cheap, so, when the boomers see those options, it's hard. If they do all the updates to their houses that today's buyers will desire, their houses will sell quickly, but there are no houses for them to go to."
Paul Bishop, vice president for research at the National Association of Realtors, said boomers are showing a fairly strong desire to age in place. Because Delaware is home to many boomers, the market here reflects that, he said.
Delaware boomers are downsizing, but so slowly that Bayard Williams, president of the Delaware Association of Realtors, has heard agents joke that over-55 housing is more aptly named over-75 housing.
That doesn't mean boomers aren't all in when it comes to real estate though. They just aren't selling
the family hearth.
"We have this idea that baby boomers are just sitting in their homes waiting for the opportunity to sell, but they're also out there in the market," the NAR's Bishop said. "They're buying vacation homes, helping their adult children buy homes, investing in properties. Baby boomers are very active in the market beyond just buying and selling the family home. They are about one-third of the home buyers right now. Younger baby boomers are still trading up. They're a fairly dynamic segment of the market."
Older boomers don't face the same retirement housing factors their parents did. They are healthier and wealthier than previous generations at retirement age. They often don't have to downsize to sustain their current standards of living. Many have the money to renovate their homes to allow them to age in place.
Boomers in the market for smaller houses complain that downsized digs lack features such as bar faucets and slide drawers that they've added piecemeal over the years. Many younger boomers are keeping their homes to accommodate aging or infirm parents.
Many older boomers are waiting for their children to get on firmer financial footing. One out of three 18- to-34-year-olds still lives with parents, according to U.S. Census figures.
As offspring take jobs in other states and other countries, the boomers' family home often becomes the hub where children and grandchildren reunite for the holidays. That's especially true for boomers with beach houses.
"The baby boomers know that their children and grandchildren will visit them when they have options they can share together, like the beach, the outlets and outdoor activities. That comes up all the time," said Bryce Lingo of Jack Lingo Realtor.
Steven Witsil of Witsil Realtors in Centreville estimated only about 15 percent to 20 percent of the boomers in his sales area have downsized. "I think people are just satisfied with where they are and they don't want to make that move. They find it a disturbance," Witsil said, adding that couples whose adult children have left home are more likely to make a move.
The leading edge of baby boomers turns 72 this year, so the real estate market likely will look very different in the next decade as infirmities and attrition strike the "me generation." Fannie Mae predicts as many of 11.9 million older owners will sell before 2026, and another 13.1 to 14.6 million will move in the decade after that.
Will the market tip when boomers begin to sell? Will prices follow suit?
It's difficult to predict what factors will be in play a decade or more from now, but local and national experts don't see a problem.
If there is excess inventory in the future, demographic changes might buoy the market, said Bishop of the National Association of Realtors. "The steady flow of immigration is very positive for the housing market, because it's going to grab a little of the slack when boomers do decide to sell their homes," he said.
As long as the local economy is thriving, Laird Bunch of Brandywine Fine Properties said he expects the under-$1 million market will not be upended when the boomers start selling in great numbers.
"If the economy was in a decent spot and, all of a sudden, they started selling, there's enough draw here, with attorneys and businesses and doctors and the hospital, then I think that level of houses would always go. I think those price points would still be in high demand."