Regional Spotlight—(MCT)—When it comes to housing, baby boomers are different from many people in two important ways: they have more equity in their homes, and many are preparing to move.
If housing experts are right, boomers—the 77 million Americans ages 47 to 65—soon may be a sweet spot in an otherwise sour market for new homes.
But if you’re a Central Indiana boomer looking to downsize, good luck finding the house you want.
Homebuilders—caught in a slump that has slashed U.S. new homes sales in half since 2007—have been slow to adjust. And the stock of existing homes in Central Indiana is not exactly rich in the type of amenities boomers say they want. A few builders are shifting to the senior market, but there’s not nearly enough construction planned to meet the pent-up demand, says Edsel Charles, a national and local housing researcher.
“Right now,” says Charles, of Tennessee-based MarketGraphics, “I think only about 60 percent (of boomers) will find what they want, and it should be much higher.”
So empty nesters such as Bruce and Nancy Childs, who decided to downsize from a large home on an acre lot on Indianapolis’ Far Northside, had better be ready for a slog. The Childses started with a list of 220 houses—and ended up dismissing all but two before eventually buying in Noblesville’s Lochaven neighborhood.
“It was a madcap search,” says Bruce Childs, 64, “and they didn’t have a lot we were interested in.”
It’s a story that Charles, who has been researching new housing in more than 20 states, including Indiana, says will be told more and more frequently as early as next year.
Ready to downsize
The retirement market, experts say, appears ripe for change.
Having raised families, many baby boomers are ready to turn in the keys to their oversized suburban McMansions. Research suggests boomers are tired of climbing stairs and mowing lawns and will seek ranch-style homes along quieter blocks, with features that make life a little easier on achy backs and knees.
So far, however, boomers haven’t started moving in big numbers.
“They have hesitated because of the recession,” Charles says. “Once the government and the stock market settle down, and the market turns, you will find this bunch that has hesitated will become a pent-up demand.”
Boomers and retirees, he says, will be among the largest share of the market beginning as early as 2012.
If so, it could be a potent market.
It would be hard enough to ignore 1.7 million Hoosier boomers, who make up a quarter of the state’s population, but add in the housing slump, and it would seem impossible.
“These days a lot of people can’t move,” says Indiana University economist Willard Witte, “because they can’t or won’t sell their house at a big loss.”
Unlike the younger families targeted by most builders, however, boomers have been building equity for decades. They have paid down their mortgages over time, putting them in a better position to sell. Witte said boomers may be the first demographic to move when the market picks up. Charles agreed.
“I think we are heading into a huge retirement market,” he says.
Long wish list
What boomers want, however, appears to be in short supply.
Most boomers now favor ranch homes that are about 1,500 to 2,500 square feet, Charles’ research shows, selling for $140,000 to $230,000. Some prefer age-restricted communities, low-maintenance townhomes and Downtown condominiums. The majority, his research shows, say they want single-story houses within neighborhoods that attract a broader mix of people — and are close to where they now live.
And they carry along a pretty specific checklist:
• Open spaces to host friends and family, rather than separate dining rooms, living rooms and kitchens.
• Features such as vanities and electrical sockets that are a bit higher off the ground than normal.
• Storage, especially his and hers master closets, plus structurally reinforced attics.
• Backyard living spaces—not swimming pools or outdoor kitchens, but large decks with fireplaces, hot tubs and wet bars.
(c) 2011 The Indianapolis Star