In Boomers Drive Second-home Market, RedwoodAge.com reporter Cecily O'Connor uncovers baby boomers’ contributions to a record-setting rise in vacation-home sales in 2006. But beyond homes in places like the beach or the mountain, boomers have an even broader role in the real estate market.
This generation makes up 37.5 percent of U.S. households, with 10 percent of boomers planning to buy some form of real estate within the next year and another 40 percent planning to convert their vacation homes into primary residences in retirement. It's also unique in its quest for main floor master bedrooms, one or two home offices, and low-maintenance properties. Other considerations are guest houses for older children or ailing parents, and -- given this generation's desire to stay in their retirement homes for the longterm -- handicapped-accessible entryways, bathrooms, hallways and kitchens.
Yet I know of only a handful of builders constructing homes specifically for this demographic. I think it won't be long before real estate consumers over the age of 50 let their voice, and their “almighty dollars,” be heard. As Maya Angelou says, “If you don't like something, change it.” Next time they see a home that doesn’t fit their bill, you may just hear them protesting loud and clear. Several chapters of the National Association of Home Builders are broaching this discussion, as real estate agents like John Bacon, of SoldinOregon.com, call for change to meet the demand.
As a member of his local home builders association, "I've just pushed for it for a long time," Bacon says. "My clients that are 50-plus are saying 'I don't want to climb stairs for the next 50 years' ... and no one seems to be listening." Not yet at least....
Questions: What modifications have you had to make or do you plan to make to your home to allow for accessibility? Are there small changes that you see, that builders aren't seeing right now, that could make a big difference? Do you agree that this could soon be an important issue for the housing market?
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Comments: 17
And Lori, good luck on the elevator search. There are some nice options out there that should keep your husband happy. Expect to pay in the $10,000 to $20,000 range for the "lev," plus construction costs. Elevators have been known to increase a home's value, so you'll get some back there. And, if the elevator is required for medical reasons (and you can get doctor's letter saying so), then you should be able to deduct any cost over 7 1/2 percent of your income from your taxes.
Over supply does indeed have the effect of bringing prices down, so you could be on to something here Kathleen. Prices have gone alot over the past decade in Portland (about 10 percent per year). Maybe this could be just the saving grace Portland renters like us need.
What your article is most helpful in for me is that when we build a deck; which we plan once our house is paid off; I will probably use ramps instead of steps.
Very helpful. Thank you.
I'm so glad this article got you thinking! Deck ramps are a great way to also accomodate everything from moving in a new refrigerator to older pets. I have also seen some beautiful winding concrete pathways that serve the same function. If it's designed well, this could indeed be a great addition to your home. Have fun with the new addition!
I too am wondering what happens when all the boomers begin selling their houses, but in a good market - like I'm on the westside of LA - I know i'll never have a problem finding a buyer. And new immigrants will most likely take up the slack for many homes too as was mentioned. I'm more concerned with how climate change and water shortages will affect selling our home in the future.
Also, aren't elevator chairs a lot cheaper than actual elevators and they don't require major reconstruction.
Additionally, why don't houses have escalators?
Lastly, I purchase smaller houses to rent and only intend to move into one if I go broke and am forced to downsize. If all baby boomers had rental property they wouldn't have to worry as much about retirement. Right?
And yes, I think the money will drive the market. Do younger couples have the highest percentage of debt? I don't know -- but if they do they will probably have less inpact on housing design in the future.
Now how is this relevant to the boomer discussion here... said owners have been approached by several boomer-aged couples who were interested in acquiring the property via 1031 exchanges. All have expressed a desire to use the property as a rental to supplement their income and carry them into retirement. Eventually, and this is an assumption on my part, these couples would want to move into the unit (effectively downsizing from their current larger homes).
As to the question of who carries more debt, I think it's undoubtedly younger couples or those who are new to the ownership market, especially in this area. The mortgages that some of our younger friends carry are, to be blunt, ridiculous given what they're able to buy for the money. A home is a home, but the costs are enormous. It's also true, however, that many older couples who have owned their homes for an extended period feel 'trapped' - they can't sell their homes to move into something different without losing out on their great property tax rates (CA prop 13). So maybe it's just a question as to which is worse: Being trapped, or being in debt and having the potential to *possibly* pay it off one day.
At any rate, great job, Jennifer.
Cecile, your home sounds lovely. I love the look of a "country cottage" and it sounds like you've been able to make good use of the small space. Kudos.
Digital Dogs, you bring up some interesting questions/thoughts. I know that climbing up and down the stairs to my basement office is helping to keep my knees limber (and the stairmasters at the gym are always packed). Certainly a little stairs now and then are a good thing, but -- as people age -- the danger of falling on those stairs and doing something life-threatening, like breaking a hip, goes up tremendously. I think this might be a factor in the trend, more than anything else. I'm thinking that walking around the block is still a great way to get in the exercise without the added danger of a several-foot fall. As to your concern about climate change and water shortages, I do have a stat about water that I can share. I attended an MBA course this weekend at Marylhurst College where the instructor said that there's enough water on this earth to support at least three times its current population for the rest of earth's lifespan. I don't know his source however.
David, you sound very thrifty. If this one-story-living arrangement is working for you -- and it appears that it is -- than kudos to you for having the strength of will to do what needs to be done to lower your energy costs. You're helping not only your pocket book, but also the environment. I had to chuckle at your escalator comment!! This would indeed be handy for those that have trouble with stairs, but I'm guessing its an aesthetic decision. A sweeping carpeted staircase does have more visual appeal that a revolving metal contraption. I know exactly what you're talking about with the elevator chairs. These are known as "stair lifts," and can be purchased for less than $4,000 for straight staircases and up to $15,000 for curving or turning ones. I agree with you that rental properties are an ideal way gain a little security for retirement. As one person who bought some property for their IRA to hold (as quoted in the New Orleans Times-Picayune) said (this is just a synopsis): "If the bottom goes out of the market, at least when I retire I'll have a place to pitch my tent."
Sherry, thank you so much for the "great job" comment. I really appreciate it. I agree with you that mortgages today can be ridiculous given what you can buy for that money. There are still good deals to be had, but those are getting fewer and farther between. However, there's some good news on the horizon for home prices. 1) The feds haven't been raising interest rates and analysts are saying they may even consider lowering it again later this summer to help spur home sales and 2) in most areas of the country real estate prices are leveling out. Rising property taxes are still a very big issue, however, as you indicate. A friend of mine just put her house on the market for that very reason: the rates had gone up and she could no longer stomach paying that much. She'll be moving into a smaller home, with half the annual taxes.
Just a quick note to Lori (second comment from the top): Thank you so much for including this article in your Home Remodeling group on Gather.
Hopefully I haven't missed anything here. Sorry for the delay in getting this reposted!