What's Happening?
A recent study by the Center for Retirement Research at Boston College reveals that homeowners aged 70 and above tend to receive lower sale prices for their homes compared to younger sellers. The research indicates that an 80-year-old homeowner typically
gets a 5% lower price for a house held for about 11 years. This trend is attributed to factors such as deferred home maintenance and the tendency of older sellers to use private, off-market listings, which limit competition and often involve investors. The study highlights that as of 2024, baby boomers, who make up 20% of the U.S. population, are increasingly choosing to age in place, contributing to housing availability issues.
Why It's Important?
The findings have significant implications for the real estate market and retirement planning. As older homeowners receive lower returns on their property sales, their financial security in retirement could be compromised, especially since home equity often represents a substantial portion of their wealth. This trend may also exacerbate housing shortages, as fewer homes are put on the market. The study suggests that planning and maintaining homes can help mitigate these issues, emphasizing the need for older homeowners to consider their long-term financial strategies carefully.
What's Next?
As the baby boomer generation continues to age, the real estate market may see increased pressure to accommodate the needs of older homeowners. This could lead to more services aimed at helping seniors maintain their homes or navigate the sales process. Additionally, policymakers and financial advisors might need to develop strategies to support aging homeowners in maximizing their home equity for retirement.
