Boomer Relocation: A Gradual Shift Rather Than an Abrupt Surge

Have you come across the term "Silver Tsunami" in discussions lately? If so, here's the essential insight you should grasp. This phrase alludes to the anticipated mass movement or downsizing of baby boomers. The concern is that a simultaneous surge in homes hitting the market could significantly affect the housing landscape. This scenario would intensify competition for smaller residences and disrupt the equilibrium between supply and demand, consequently influencing home prices.

However, there are a few flaws in that reasoning. Let's examine them closely to alleviate any concerns you may have.

Not Every Baby Boomer Intends to Relocate

To begin with, a significant number of baby boomers have no intention of relocating. According to a study conducted by the AARP, over half of individuals aged 65 and older express a desire to remain in their current homes as they age, as indicated in the graph below:

Although it's true that circumstances can evolve, and certain individuals who currently have no intention of relocating (illustrated in red on the chart above) might eventually find it necessary to do so, the overwhelming majority are banking on the concept of aging in place.

For those who opt to remain in their current residences, it's probable that they will make adjustments to accommodate their evolving needs as time progresses. Moreover, when renovating their existing homes isn't a feasible option, some may choose to purchase a second property while retaining their original one as an investment, aiming to build generational wealth for their loved ones. This perspective is elaborated on in an article from Inman.

"Numerous boomers are not inclined towards complete retirement and downsizing... A considerable portion will customize their current residence, while those with greater financial resources may choose to own multiple properties."

Even Those Who Decide to Relocate Won't Do So Simultaneously

While not every baby boomer is considering selling their homes and relocating, those who do won't undertake this transition simultaneously. Rather, it will occur gradually over several years, as noted by Freddie Mac.

"We Predict the 'Tsunami' Will Resemble a Gentle Tide, Resulting in a Gradual Departure of 9.2 Million Boomers by 2035..."

According to Mark Fleming, Chief Economist at First American...

"Demographic shifts never occur suddenly. The baby boomer generation spans nearly two decades of births, indicating that their impact will unfold over a similar timeframe."

Bottom Line

If you're concerned about a sudden upheaval in the housing market due to a "Silver Tsunami," rest assured. The movement of baby boomers will occur gradually over an extended duration, rather than precipitating an immediate impact.