The baby boom could eventually become the cause of a housing bust: a flood of homes will come on the market in the next 20 years as boomers age, enough to affect local economies in traditional retirement areas, said a Zillow analysis.
About one-third of America’s homes are owned by those 60 and older, Zillow said, and the “Silver Tsunami” is estimated to hit in earnest as the number of seniors aged 60 or older who die each year rises during the 2020s and 2030s. In the decade from 2007 to 2017, roughly 730,000 U.S. homes were released into the market each year by seniors aged 60 or older. From 2017 to 2027 and from 2027 to 2037, that number is set to rise to 920,000 and 1.17 million per year, respectively. This means more than 27% of today’s owner-occupied homes will become available by 2037.
While virtually all areas will feel the effects to some degree, retirement hubs like Florida and Arizona are likely to feel the sharpest impact, Zillow noted. If demand erodes because fewer people choose to retire there in the coming years, those areas might end up with excess housing. Also heavily affected will be regions like the Rust Belt, which saw younger people move away in recent decades, leaving older generations to make up a larger share of the population.
Some regions will be far less affected. These include Salt Lake City, where a much smaller share of homeowners are in their golden years, as well as Atlanta, Austin, Dallas and Houston, relatively inexpensive places that tend to attract younger residents looking for an affordable alternative to expensive coastal cities.
Still, the differences in the share of homes released by seniors among metros are small compared to the differences within them. Palm Springs, for example, will see 45% of its owner-occupied homes vacated by 2037, compared with 23.8% of the combined L.A.-Riverside metro area overall. El Mirage and Sun City figure to see nearly two-third of their homes available, compared with 28.2% of the Phoenix area at-large.
