Baby Boomers, often known as the workaholic generation, are famous for their strong work ethic, career dedication, and pursuit of personal and professional growth.
So, it’s not surprising that Baby Boomers currently hold a significant portion of wealth in the United States, 50 percent to be exact, and much of that wealth is in real estate. Boomers, defined as those born between 1946 and 1964, were fortunate to purchase homes at significantly lower prices, and have either built substantial equity in their homes or have leveraged that equity to make future purchases.
Over the next 10 to 20 years, the largest group of home sellers by far will be those from the ‘Boomer’ generations, as they continue to ‘age out’ of their homes, while Millennials (those born between 1981-1996), have now become the biggest group of buyers, according to the National Association of Realtors.
Despite 92 percent of Boomers preferring to age in place (American Advisors Group), many have not planned how to do so safely. This preference contributes to the short supply in the resale market. In 2023, home sales hit a 30-year low, impacted by high interest rates and rising prices, discouraging many Boomers from moving.
Given the inevitable increase in demand for homes over the next several years, now may be the optimal time to evaluate whether it is the ‘right’ time to make a change and capitalize on some of that built-in equity for a healthier, happier future ahead. Here’s how to get started:
1. CONSULT A REAL ESTATE PROFESSIONAL
Determine your home’s true value and equity after selling costs. Assess any improvements needed to enhance salability, such as updating larger systems, or making cosmetic improvements (such as paint). Keeping up with some improvements could be very appealing to buyers who may not have the extra cash on hand to invest in an aging home.
2.TAX IMPLICATIONS
Consult a tax advisor about potential tax burdens and benefits available related to capital gains.
3. FINANCIAL PLANNING
A financial advisor can help you decide whether to sell or stay and modify your home for better suitability.
4. EVALUATE CHANGING GOALS
How do you want your life to look for the next several years? Many find that after age 60, life goals tend to be less about wealth accumulation and professional successes, and the focus turns to fulfilling lifelong aspirations like travel, spending more time with family, honing a hobby, or moving away from a location once necessary for work to one that is more conducive to recreation and quality of life.
Below are some of the biggest reasons that Baby Boomers are choosing to make a move; perhaps one or more of these applies to you:
Moving closer to family/grandchildren
- Choosing to move to a ‘dream’ destination
- Downsizing or space-changing for accessibility needs
- Moving to eliminate a mortgage (using equity to pay for downsizing)
- Moving to a location to lower cost of living (taxes, utility costs)
- Moving to an area with a desired lifestyle (golf, hiking)
- Moving to a better climate
- Moving for a new sense of community
- Moving to a location with better/more accessible healthcare
It’s fair to say Boomers are not slowing down any time soon. They’ve earned their freedom, they know what they want, and they know how to get it. They also want a real estate agent who is at the top of their game and has the same work ethic and drive to succeed.
While we are just a few years behind this generation, we are at your service and ready to take the Boomers into this next exciting stage of life.
Christine Anthony and Jennifer Sturgeon, both Realtors® with Russ Lyon Sotheby’s International Realty, have enjoyed years of experience helping others to navigate ‘what’s next’ when it comes to these important decisions. To request a confidential consultation, please call (480) 200-0972 or (480) 495-3806.