As always, Baby Boomers–61 to 79 years old–are having a huge impact on the real estate market as both the Sellers and the Buyers of properties nationwide, according to the National Association of Realtors’ Generational Report. It says that 55% of the sellers and 42% of the buyers are categorized as Baby Boomers. They are different from the younger generations in many ways.
As the Sellers: This may be a time in their life when they are planning for their next stage of life. Many are living in homes they bought at younger ages than most buyers of homes today, have built up a lot of equity, and have little or no mortgage left to be paid off. For many, it may be their largest asset that they own, and so they are concerned about their timing of their sale and the amount of the capital gains tax to be paid after closing. Offsetting that is the fact that this continues to be a booming real estate market with record-setting sales prices.
How long can this last? Things that concern them are
- Should they update their existing home to get the highest sale price from their potential buyers?
- Which projects are the most important to do, and how long would that take to complete? … And cost?
- Will a builder want to buy their home and then tear it down?
- Or would the likely buyer merely renovate their home?
- What can I get for my home?
- Why can’t I price it higher?
As the Buyers: They’ve probably owned one or more homes over the last few decades and have assets, including cash. Some may be downsizing and cashing out, while others are finally buying their “dream home.” Some Boomers may be going home or are buying something closer to family or friends. Many want something in move-in condition and want to settle into their new location after doing many renovations over the years. The most important factor is that they usually have all or most of the cash to buy and are less concerned about mortgage rates in order to buy. They also want to know where they are going before they commit to sell their home. With low inventory in most areas they want to go, this can be the biggest problem now. They can usually afford to have desirable terms in their offer to purchase
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