The Economist has an article out about the possible effects on housing when 78 million baby boomers retire, drawing from a report published this month in the Journal of the American Planning Association. The authors of the report are Dowell Myers, a professor of urban planning and demography in the School of Policy, Planning and Development at the University of Southern California, and SungHo Ryu, an associate planner with the Southern California Association of Governments:
"For three decades baby-boomers have helped push prices up: they settled down, then bought bigger houses and second homes. But as the first of them celebrate their 65th birthdays in 2011, this may change. The old sell more homes than they buy, according to data covering 1995-2000 (see chart). The ratio of old to working-age people is expected to grow by 67% over the next two decades. Will the younger generation be able to buy all the homes on the market?The Wall Street Journal also has some commentary on this in an article entitled "Why Baby Boomers May Bust the Housing Market".
Young adults make up the bulk of new demand, with most purchasing homes when they reach their early 30s. The flood of elderly people selling their homes, Mr Myers suggests, may lead to a drawn-out buyers' market. Prices may fall further as younger people, perceiving a downturn, delay purchasing".
In some states – namely Connecticut, Hawaii, New York, North Dakota, Pennsylvania and West Virginia – the process has already begun, with sellers starting to outnumber buyers, Mr. Myers says. He contends that the East Coast, particular Maryland and states north, face a double hurdle because there aren’t enough young people to pick up the slack as boomers sell off and because prices are so high that many will not be able to afford these homes.In the past few years, some housing talk has centered around young people expressing concerns about not only paying more taxes for social welfare programs, but also funding someone's retirement in Florida or Arizona by buying their overpriced house.
“In some states like New Jersey, it could be 20 years before prices recover,” he says, explaining that the generational trend is one that could stretch for decades.
Here's an ad from last year posted by one of our commenters in this thread:
14XXX Legend Glen Court
Gainesville, VA 20155
ATTENTION ATTENTION: Husband needs to retire. Bring any Reasonable OFFERS for us to consider and Pre-approval from bank to OPEN HOUSE THIS SUNDAY 6/24 or call us for private showing. ALL PAPERWORK will be done by licensed agent.
The poster (John) noted the original list price was $475,000 and was reduced to $389,900 after a year on the market. The house was purchased on 6/30/2003 for $250,000. Currently the lowest-priced house on the street is $299,900, and the most expensive is $349,900.