There is a silent shift that is currently staging to take place across the nation and this is going to have a significant effect on the overall housing market. This shift is a demographic change that is set to take place within the senior population in the nation and based upon research conducted by the National Association or Realtors this will create both substantial opportunities and challenges.
(picture of the lovingly kept Rittenhouse Square Park)
The next generation of home owners
Over the course of the next two decades it is believed that there will be a surge of over 30 million seniors, which is not to mention their children. Called the echo boomers, this group was born after 1981 and before 1995. They encompass as many as 65 million U.S. Citizens and as they come of age they will have a significant impact on the housing market.
Although this may create an influx in need from this group, the rate in which seniors over the age of 60 will have home dissolution will start to occur at a rate that is faster than it is created. Over this next four decades this means that there will be an incredible increase of houses into the market creating remarkable challenges for some, and amazing opportunities for others.
Of the areas in the United States that will likely feel these changes the strongest will be in the Northeast and the Midwest. This is the areas that see the most of the boomer population and it is estimated that as much as 75% of that market will be consumed by the echo boomer generation, possibly as early as 2020. On the down side of this, the echo boomers have also seen some substantial set backs with the recent economic upheavals.
One of the unanswered questions that remain is whether or not the echo boomers will, after having faced serious challenges obtaining home ownership, be able to purchase these houses. There are some who suggest that it will take further correction by the housing prices to help move things in the right direction.
In the end, it is important to remember that there are many aspects to the economy that are all interconnected. This includes the housing market and employment. If we continue towards a strong economy and there is growth as projected in the boomer housing market, then echo boomers will have a good chance. This absorption of the excess market will help soften the blow as boomers are leaving their homes, and with a population growth of approximately 93 million people by 2050 there will be further natural expansion.