The inventory of homes for sale has fallen to its lowest level in almost twenty years, and now a new survey from Realtor.com suggests is placing the blame for this on baby boomers and homeowners that just don’t want to sell.
The survey revealed that most baby boomers simply want to “age in place” and therefore have no intentions of “downsizing” to a smaller home. As such, this refusal to sell is clogging up the market, the study says. Some 85 percent of baby boomers indicated that they do not plan to sell their home in the next year, which means a total of 33 million properties won’t enter the market. Those properties would of course be popular choices for millennials, many of whom are still waiting to become homeowners.
“Boomers, indeed, hold the key to those homes the market desperately needs, both in the urban condo and the detached suburban home segment,” said realtor.com’s chief economist Danielle Hale. “But with a strong economy and rising home prices, there’s really no reason for established homeowners to sell in the short term. Although downsizing might be on the minds of boomers, they face the same inventory shortages and price increases plaguing millennials.”
The survey also found that 63 percent of all homeowners indicated that they’re satisfied with their current homes, which meet the needs of their family. Homeowners cited low interest rates, recently buying a home, and the need for improvements as their main reasons for not wanting to sell.
“Life events drive real estate transactions,” Hale said. “When the majority of homeowners feel their family’s needs are being met by their current home, there is nothing compelling to them to put their home on the market.”
However, there is hope that we might see more starter homes on the market soon. ossibly offsetting the low supply of starter homes, which is down 17 percent year over year, 60 percent of survey respondents who are planning to sell in the next year are millennials who want to move to a larger home or one with nicer features.
“The housing shortage forced many first-time home buyers to consider smaller homes and condos as a way to literally get their foot in the door,” Hale said. “Our survey data reveals that we may see more of these homes hitting the market in the next year, but whether these owners actually list will depend on whether they can find another home.”