1 in 3 Baby Boomers Say They'll Never Sell Their Home

[Metaphorical]

56. The Shifting Demographics of Housing

Historically, people buy up in houses (more space, better amenities, especially schools and similar facilities), then reach a point where they are empty nesters, and buy down as children leave, with job changes usually being the catalyst for that change.

That's become somewhat distorted for several reasons:
* More DINKs and DISCs (Dual income, single child) have meant that family size became less of a factor in moving, typically meaning more people are empty-nesting by their late forties and early fifties, rather than in their sixties or seventies.
* We're facing the end (probably for several decades) of Zero Interest Rate Policies (ZIRP). This is disincentivating moves in general.
* People buy up when they are feeling optimistic about the future, and buy down (or hunker down) when they aren't.
* All Ascending Boomers born before the peak in 1955 are now above retirement age (65). By 1930, all Gen Jones will be. Fixed incomes in general have been diminishing over time (in both absolute and inflation adjusted terms), which means that there is more and more financial pressure to cut costs, which in real estate terms meaning not taking on new mortgage debt, paying down existing debt, and holding on to housing that's been paid off.
* By the age of 75, the likelihood that one or the other spouse will die rises dramatically, The youngest boomers hit that point in 2030, and that will usually result into a move to either a retirement community an assisted living facility, or moving in with one of the kids within a couple of years of the spouse's death. While Boomers are no longer the largest demographic (the Millennials took that spot in 2012), they are still a large demographic bulge that will affect housing dramatically for the next couple of decades.
* At some point, investment companies are going to end up with a surfeit of houses that are all declining in value because of market pressures, plus are just getting older, and will be increasingly poorly maintained. This points to a housing recession sometime in the next ten to fifteen years.
* Work From Home has started decoupling the need for workers to have to move to their next jobs (geofencing).Despite efforts to push RTO mandates, as more work becomes virtualized or otherwise geospatially automated, this trend will continue, and this means in general the 25-65 year old cohorts will likely be less incentivised to live in high cost areas. The biggest beneficiaries - smaller cities and large towns that balance low housing prices with reasonable cultural amenities. It may end up rebalancing some purple states (such as Pennsylvania or North Carolina), making them bluer again, and it will relieve the pressure for housing in geographically constrained areas such as San Francisco, New York, Boston, or Seattle.
* On the other hand, many rural towns are likely to disappear altogether. The median age in many Midwest and Southeast towns is well north of 55, and as these populations age out, there will be fewer and fewer people younger people interested in staying there, let alone retiring there. By 2035, much of Red America outside of towns> 100,000 people will be ghost towns.