Is Zillow Right About The Impending “Silver Tsunami" In Housing?
Co-authored by Alyson Austin, Principal and Co-founder at Gaffney Austin
If Zillow is right, and millions of homes are due to come online as Boomers move out, this is the market supply explosion that Millennials have been waiting for. Zillow says between 2017 to 2027, the number of homes released back into the market could be between 920,000 and 1.17 million per year. Looking at the Millennial population by age, we see the age group with the highest number of potential buyers in 2019 are between 28-29 years old.
Assuming a 20-year college loan* is paid off by the time this cohort reaches 35-40 years of age, and these homes come booming onto the market, the timing is ideal. Millennials will welcome the glut of homes on the market as they purchase their first home or move up.
Fears of an oversupply are likely overblown. Due to high costs for homebuilders, new housing starts have been depressed since the Great Recession. Meanwhile, Millennials, the largest living generation, are followed by Gen Z, projected to be an even larger group. This means demand is there to backfill the Baby Boomers.
So, remodelers, get ready! These homes might be good candidates for fixer-uppers and the younger generation isn’t afraid to take on the challenge thanks to HGTV and YouTube. This doesn’t take away from the homebuilding industry, either. We need the younger generations to get on the homeownership ladder somewhere, and lower-priced existing homes offer a good start.
Don’t call it a Silver Tsunami, but a Silver Shower and Millennials will be dancing in the rain.
*I refinanced my loan years ago that brought my term from 20 to 10 years and lowered my interest rate. Companies like the one I worked with are becoming increasingly more popular among younger generations
Real Estate Economist | Data Wonk | Author and Speaker
4ySounds about right. Most boomers -- myself included -- have no intention of giving up their houses anytime soon. Reminds me of when developers of "senior housing" in the 1990s would prepare market studies assuming demand from 65-year-olds. As if. The revolution will wait.
Lead Analyst at HousingWire
4yThis boomer supply shock has been a thesis since 1998 as the first boomer hit 62 in 2008, and it has never panned out. The impact of any real increase in supply would mean builders will limit their production of homes.
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4yI agree Ali and Alyson. Reference to projected increases in absorption is curiously absent from the Zillow and WSJ reports. When sold retail with a real estate agent commissions, many of these homes (plenty of these are Mcmansions) will sell for top dollar so am a little dubious on “affordable” - they might be slower movers. The attainability, and opportunity for Millennials, really comes with single family conversions or fix-and-flip direct sales/rentals in secondary or tertiary markets with job growth. #housing #realestateinvesting #fixandflip #singlefamilyhomes #millennialmarketing
Sr. Director of Planning / Facilities, Design & Development
4yIt sounds great, “millions of homes are due to come online as Boomers move out”. But move out? To...?
Strategic Communications Professional at Gaffney Austin, LLC specializing in Public Relations
4ySilver Tsunami? If so, Millennial will be dancing in the rain! Perfect timing for buyers coming-of-age to purchase homes during the next 10 years.