Baby boomers could struggle to downsize from their ‘supersize’ homes

Baby boomers who have built “supersized” homes for themselves may find it difficult to sell when they want to downsize, according to a report in the Wall Street Journal. The report adds that some sellers are resulting to steep price cuts in order to attract prospective buyers.

Around 15 years ago, just before the Great Recession, there was a trend among retirees to build huge, five or six-bedroom homes in warmer climates such as Florida, North Carolina, Texas and other sun-splashed cities. The trend was driven in part by easier access to credit and the housing boom of the time.

But these days many retirees who built or bought such properties are facing challenges in keeping up with the maintenance of such properties. It’s becoming costly, and many don’t have the energy for DIY tasks themselves. Worse, they can’t sell because younger buyers lack the appetite for so-called “McMansions”, opting instead for smaller, modern homes that cost less.

One only needs to look at Buncombe County in North Carolina to see the reality. There, 34 McMansions priced at over $2 million are currently listed for sale. But just 16 percent of those homes have actually found a buyer in the last year, said Marilyn Wright, a real estate pro with Premier Sotheby’s International Realty. And in Scottsdale, Arizona, there are currently 349 homes valued at north of $3 million on the market. However, many of these are actually being listed at steep discounts of up to 50 percent, the Journal said.

Experts say the situation could worsen as more baby boomers advance in age and become forced to sell up.

“You had this wave of homes built that now just don’t make sense for a lot of the people who bought them,” Rick Palacious Jr. of John Burns Real Estate Consulting told the Journal.

Baby boomers currently own 32 million homes across the country, Palacious mentioned.

Unfortunately for them it seems as if discounts will be the only way they’ll find a buyer easily. A recent report by realtor.com revealed that almost half of all home buyers this spring are constrained by their budgets, and so they’re looking for homes priced at $200,000 or less. That puts them out of the market for supersized homes. In fact, just 7 percent of shoppers in the same survey said they’re looking to buy a home that’s valued at $750,000 or above.