Economists predict mass downsizing by aging Americans this year, and the real estate industry should brace for potential market shifts.
Analyst Meredith Whitney forecasts a "silver tsunami" starting as early as 2024. This is after 51% of AARP survey respondents aged 50 and above said they planned to downsize, which could unlock more than 30 million housing units.
However, others point out, the lock-in effect of low mortgage rates might deter some from moving.
Mark Fleming, Chief Economist for First American Financial Corporation, also notes that the youngest baby boomers are just turning 60, so mass downsizing and its full impact on the housing market may take more time to materialize.
“Baby boomers are staying in their homes longer. They’re wealthier. They’re healthier. They’re able to stay in place longer than generations past,” he told Fortune. “Aging out will happen. But not yet.”
Whenever it hits, a “silver tsunami” could reduce demand and prices for rental properties as younger generations move into the homes left vacant by downsizing boomers. However, this depends on various factors, including their ability to afford the homes being sold by older occupants.
To prepare for changing market demands and preferences, property managers can proactively consider entering the senior living market. This could include modifying existing rentals for older inhabitants or managing housing designed for seniors, such as assisted living facilities and retirement communities.
More tenant behavior headlines
Priced-out Florida retirees are moving to Alabama – PayProp
Survey: 3 in 4 Gen X kids want their parents to age in place – HousingWire
More boomers are living alone. One reason why: ‘gray divorce’ – CNN
