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With a mindset that they are healthier than their parents were, have adequate nest eggs to maintain their homes, and are emotionally attached to their neighborhoods and belongings, many boomers are revising the anticipated script of where they’ll live as they enter the last chapter of their lives.
Baby boomers, a huge cohort of 68.6 million Americans born between 1946 and 1964, aren’t rushing to relocate to senior and assisted-care facilities in the Sunbelt. Rather, the vast majority—92%—say they want to age in place, even if they haven’t yet planned how to do so safely, according to American Advisors Group, which offers reverse mortgage loans to help those over age 62 to stay put.
Home sales statistics reflect the trend. According to National Association of REALTORS® Chief Economist Lawrence Yun, home sales in 2023 fell to their lowest levels in nearly 30 years, but are finally on the uptick as of February. Boomers are said to be one reason inventory has been in short supply and the housing market has been frozen.
“Lower mortgage rates seem to be the only way to bring in more listings—reducing the spread between the prevailing mortgage rate and the 3% rates homeowners locked in,” says Jonathan Miller, CEO of appraisal firm Miller Samuel Inc. in New York and author of the Housing Notes newsletter. “At the same time falling rates increase demand, steadily rising prices make for an inventory stalemate that may last for several years,” Miller says.
So, what might spur boomers to move and add inventory for eager millennials?
Retirement, including pending retirement, is a potential trigger for boomers, pushing them to move to places they want to live, including closer to friends and family, says Jessica Lautz, deputy chief economist and vice president of research at NAR.
If they move, it may be to a different type of home, she says. “They often seek a newer property, and are not necessarily downsizing,” Lautz says. “The lack of downsizing may be due to the lack of smaller housing inventory, but also the desire for a bigger home” to accommodate children and grandchildren. She agrees with Miller that it’s unlikely housing inventory will increase as was anticipated when boomers purchased 20 years ago or so.
With 10,000 boomers reaching age 65 every day, it’s a good time to think about how you might help them navigate this complicated life stage. “So many [boomers] say, ‘I’m not moving.’ But what is left out of most conversations is what comes next. The follow-up statement is almost always, ‘unless I have to,’ ” says Nikki Buckelew, CEO and founder of the Seniors Real Estate Institute in Oklahoma City.
Crises—a fall, illness, lower fixed income—may necessitate change, even though many in this group like to remain in control and are accustomed to researching to find what’s best, says Jean-Marie Minton, GRI, SRES, with Minton Regan Homes, Keller Williams Realty in Beverly, Mass.
No single solution works for all. “Unlike first-time buyers, this group typically has several options. It’s part of my job to help formulate which might be best,” says broker Tia Hunnicutt, ABR, SRES, founder and broker of Proxima Realty Group in Oakland, Calif.
That takes more than a one-hour conversation, says Jae Wu, broker and co-owner of Heyler Realty in Los Angeles. “It’s the largest life move for a lot of seniors and requires asking thought-provoking questions and listening to their answers. I ask them what they like to do, if they’re an introvert or extrovert, and to share what they want their life to be like in 10 years, so we can plan,” Wu says.
Many seniors who are moving want to stay near what they know, says Stafford Manion, SRES, with Gladys Manion in St. Louis. His mother remained in her Florida home into her 90s. “It gave her purpose,” he says.
Other boomers want to “chase grandbabies, sometimes in another state,” says Lautz. Or they seek a warmer climate, says broker-associate Angie Golembiewski, SRES, C2EX, an agent with Baird & Warner in Crystal Lake, Ill. Some stay put to house their grown millennial offspring, which helps them save for a house or pay student loan debt. Another option, multigenerational living, has grown more popular in recent decades, according to the Pew Research Center.
Besides taking the time to under-stand boomers’ desires, here’s more advice on becoming a knowledgeable, compassionate guide.
Professionalize Your Knowledge
The Center for REALTOR® Development offers the Seniors Real Estate Specialist (SRES) designation. The coursework provides useful information to help boomers make late-life housing decisions and can be done through NAR’s online self-paced platform or in a classroom.
As your clients approach retirement, real estate questions may be brewing in their heads: What's the value of our home? Can we afford to move? What are options for homes and communities that suit our changing needs and lifestyles?
Through the program, Minton says, she learned how to counsel older sellers and buyers; they know she understands their emotional and financial concerns and can help them evaluate choices. She’s also prepared to find other resources—perhaps a service to declutter, which often evokes fear and can delay starting the process.
Kickstart a Conversation
Find out what real estate questions are brewing in boomers’ heads.
They may be interested in knowing the value of their home, the available housing inventory, and options for homes and communities that suit their changing needs and lifestyles, says Golembiewski. “With their growing housing wealth and historic levels of equity, more boomers are using their equity to fund their retirement,” she adds.
Others may have grown children who are concerned about their living alone and who want them to move closer, says Minton, who at age 64 moved with her husband to Boston from Chicago, so they could be within walking distance of their daughter.
Often, sellers have mixed emotions about leaving a family home; Hunnicutt advises focusing on getting them excited about their move.
Strategize Finances
How much equity boomers have built up in their house—along with how much they’ve saved—is critical information for evaluating how ready they are to meet their financial and lifestyle goals, says Lawrence D. Mandelker, trusts and estate partner in the New York office of Venable LLP. He takes a holistic view of his clients’ situation, often working with the seller’s team of advisers, including their real estate salesperson, accountant and financial planner.
When you’re working with older sellers who are buying a new property, encourage them to consult an attorney before buying to ensure ownership is structured appropriately, Mandelker advises. Many times, owners are encouraged to put assets, including real estate, into a trust, which may offer creditor protection or tax benefits.
Explore with boomers whether “right-sizing” will better fit their finances, says Jessica Duncan of Better Homes & Gardens Real Estate–Main Street Properties in Pensacola, Fla. If they’re in a single-family home, a condo may be less costly—though it may not be if the unit is newer construction. Help boomers consider all potential expenses, including monthly HOA fees.
Another financial issue to raise is the possibility of a capital gains tax, which depends on what they paid, how long they lived there, if it was their primary residence, the amount spent on capital improvements and their marital status, Mandelker says. In areas where houses have seen big appreciation, homeowners may feel stuck and decide to stay, even if maintaining the house is becoming difficult, so their heirs benefit from the step-up in basis exemption upon their death.
However, the amount of the tax may be less than they imagine; if it’s a concern, encourage them to talk to a tax adviser. (See Know the Tax Ramifications).
Develop a Plan B
Because finding a forever home may not be possible, Buckelew helps older buyers develop both primary and backup plans. “The house advisable for someone healthy at 70 to 80 is likely different than for someone 80-plus and coping with health challenges,” she says. Local services are often available to help, says Brendan L. Ward, trusts and estate partner with Cherry Tree Legal PLLC in Lynn, Mass.
Aging in place may be impractical for some. When needed, broker Betsy Phillips, SRES, with Compass in Glenview, Ill., is prepared to share information about full-service independent living, assisted care, memory care and continuing care retirement communities. New possibilities keep emerging, including “dementia villages” that offer a home-like setting with medical practitioners onsite.
For many seniors, though, these choices are unaffordable, says Jennifer Molinsky, director of the Housing and Aging Society Program at Harvard University’s Joint Center for Housing Studies. In the overwhelming majority of metro areas studied for the report Housing America’s Older Adults, only 13% of single adults 75 and older living alone could afford assisted living, she says. She advocates for more innovative housing models, accessory dwelling units, missing- middle housing, and zoning and building code changes.
Help Prioritize Condition and Location Goals
Older adults are more likely to have mobility difficulties and need services and support at home, Molinsky says. Yet less than 4% of the country’s housing stock offers three basic accessibility features: single-floor living, no-step entries and extra-wide hallways and doorways, she says. “In addition, many older adults live in low-density locations with limited service options, and in-home assistance is expensive,” she says.
Many boomers don’t want to under-take a remodel, which is why Wu has found many favor new properties that offer less ongoing maintenance. Location goals also differ from their younger years when, for many, having a school nearby was a must. Wu says proximity to a medical center and other services, an outdoor space, and a garage tend to be priorities. She and her husband moved his mother from Boston to California, into a 55-plus community near their Los Angeles home.
Discuss Whether to Buy or Sell First
There are always debates about whether sellers should first list or buy.
The advantage of selling first is that they know what liquidity they have, Manion says. “Too many times people think they’re going to get one price, and they don’t.”
Minton likes the idea of selling first and then temporarily renting to avoid a hasty purchase, which could be especially smart for boomers moving to a different city. But it will mean two moves and possibly storage expenses.
In a competitive market, says salesperson Allison Bond of Cummings & Co. in Ruxton, Md., sellers might ask buyers to sign a rent-back agreement to gain more time to find a home. Duncan has become a specialist in orchestrating simultaneous moves, so properties close the same day.
Because of sparse inventory, boomers who can afford to may choose to buy first. They might also offer buyer financing, Ward says.
