Will boomer age homeowners fuel a silver tsunami?

Will there be a Silver Tsunami in 2024? In other words, will Baby Boomers flood the housing market with their existing homes as they retire and downsize? 

Experts at MarketNsight do not believe there will be a tsunami of Boomers flooding the market. And the reason why makes a lot of sense!

John Hunt, Principal and Chief Analyst with MarketNsight, states, “Even as some Boomers do list their existing homes, we further believe that pent-up demand by Millennials and Gen Zs will snap up that inventory.” 

Inventory is incredibly low in Atlanta at present. MarketNsight numbers show it 40% below pre-Covid levels. Atlanta needs 47,000 additional housing units to be listed for  home sales to get back to a normal 6 months of housing supply.  At present, Atlanta has 2.3 months of supply and is not estimated to exceed 3 months of supply this year.

A recent Fortune magazine article sets out very good counterarguments to the “Silver Tsunami” theory.  

“Demographics are never a tsunami,” one commentator states. “[Baby Boomers are] going to take about two decades to work their way through. In fact, the youngest baby boomers are only just turning 60.” 

Plus, if there was a “Silver Tsunami,” surely there would have been signs of it in 2021 when rates were ultra-low and home prices were up 21%! That would have been a perfect time for Boomers to unload their homes, but they didn’t, largely because they had nowhere to go. 

The overwhelming majority of home construction in this country over the last 40 years has been single-family detached at or above 2,000 square feet. Boomers are ready to leave that house behind for something smaller, usually smaller than most zoning will allow.  

Hunt says, “We are simply not building enough ‘Boomer Friendly’ product to encourage them to make a move. And now, even if they had that product available, they would not give up their 3% mortgage for one at 6%. This will keep a tight lid on resale supply for the foreseeable future.” 

In a U.S. News article published last month, experts point out that Boomers are a generation of approximately 20 years, and it will take a while for the housing market to feel a difference. Even so, the generation is very split regarding housing decisions. Some will sell their properties, but others plan to pass them down to loved ones. For many Boomers, they raised their children and grandchildren in these homes. There is a nostalgic desire to keep their beloved homes in the family for the next generation.  

Aaron Gordon, branch manager at Guild Mortgage, told U.S. News that the change will be less of a tsunami and more of a “rideable wave.” 

It looks like there won’t be much movement from Boomers anytime soon. Without options that fit their updated needs, they are staying put. As Boomer homes eventually start to list, they will fill a need in the housing market. But it won’t be a tsunami. 

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