Baby Boomers: An impact on Real Estate Sure to Have a Big Boom Indeed
The most famous generation in American history, Baby Boomers also make up the most populous. The U.S. Census Bureau defines a Baby Boomer as one “born between January 1st, 1946 and December 31st, 1964,” reflecting the return of America’s World War II troops and their desire to settle in, return to normalcy, and start families— big families at that. BabyBoomer Magazine breaks down the birthrate of this group as follows:
- Per year: 4,000,000
- Per day (4.0 mil / 365): 10,958
- Per hour (10.6 k / 24): 456
- Per minute (456 / 60): 7.1
And 7.1 per minute amounts to one every 8.5 seconds. If you use 1957 as your base number, when 4,300,000 million boomers were born, that’s a heck of a number!
Because of this “heck of a” number, the Baby Boomer generation has the power to change every facet of American life, from the economy to politics to social culture and values. If we just focus on the economy though, we see that America’s major growth in the 1990s could never have happened without 76 million Baby Boomers in their peak earning and spending years. Real estate is no exception: like all American commerce, Baby Boomer have basically dominated what is built, bought, and sold– until now, as the generation known as “Millennial” reaches an age where their buying power commands respect. But Millennials are another story. Let’s stay with Baby Boomers, because they’re about to transition in a major way.
Because now, they are getting ready to retire.
If we add 65 years to January 1st, 1946, the result is January 1st, 2011; so, the moment when the first Baby Boomers reach retirement age has already come and gone. As The End of the American Dream puts it (rather alarmingly), “Beginning January 1st, 2011 every single day more than 10,000 Baby Boomers will reach the age of 65. That is going to keep happening every single day for the next 19 years.”
What Does this Transition Mean to Real Estate?
Baby Boomers not only buy and sell real estate; in the past, they’ve done so traditionally. According to a 2006 NAR report, Baby Boomers consistently use the services of a real estate agent: “Approximately 60% of homebuyers and 79% of home sellers used a real estate agent in their last transaction.” Thus, it behooves the industry to note what Baby Boomers want and need in homes as their lives shift into retirement mode.
As the economy changes, several studies show Baby Boomers have adjusted their real estate goals. This research, combined with input from ZipRealty agents, will inform our next post.