Boomer Homeownership Overview, 20182023
Baby Boomers remain a powerful force in Massachusetts housing market.
Urban vs.
Suburban: Where Are Boomers Buying?
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Contrary to some expectations, Massachusetts boomers have largely not flocked to urban condos in retirement.
Earlier predictions imagined empty nesters downsizing to trendy city apartments, but reality proved the opposite.
Downsizing or Staying Put?
Despite reaching retirement age, a large majority are not downsizing.
National surveys indicate about 78% of baby boomers plan to age in place in their current home.
Massachusetts reflects this norm boomers are remaining in their single-family homes longer than prior generations did.
This means fewer big homes entering the market for younger families.
Some boomers do downsize, of course, but its a trickle rather than a wave.
Motivations Behind Boomer Decisions
Why are so many baby boomers holding onto their homes?
The motivations are both practical and sentimental.
Key Reasons Boomers Stay Put
Many refinanced or bought when 30-year mortgage rates were 34%.
This lock-in effect convinces homeowners to stay put rather than pay much more for financing a downsized home.
Massachusetts home values have risen steeply, so even a smaller condo can be very expensive.
Property taxes are also high in many communities.
Long-time owners may have tax benefits or exemptions theyd lose by moving.
In short, downsizing doesnt always save money in Massachusetts pricey market.
With renovations or in-home help, they can manage maintenance.
Improved health and longevity mean less urgency to move into senior housing.
This lack of inventory of senior-friendly homes keeps many in larger houses by necessity.
After the 2008 financial crisis, many boomers became cautious.
By 2023, a typical Massachusetts boomer had substantial equity, which they view as a safety net.
Owning real estate provides stability.
Additionally, some prosperous boomers purchased second homes or investment properties during the boom years.
Sentimental attachment and financial logic thus reinforce each other.
Interest Rate Fluctuations
Meanwhile, mortgage interest rates underwent a historic swing during this period.
But by 20222023, rates surged past 6%, reaching levels not seen in over 15 years.
This spike, combined with high prices, pushed Massachusetts housing affordability to its worst point in years.
Boomers sitting on prime real estate only exacerbated this crunch, albeit unintentionally.
Property Taxes and Cost of Living
Property taxes and cost of living are another financial consideration.
But long-time owners often have lower assessed values than what a newly purchased home would cost in taxes.
From 2018 to 2023, the evidence shows no mass exodus so far.
Many boomers have decided that staying in Massachusetts (or at least not going far) is preferable.
The expected migration to Sun Belt states like Florida has been modest certainly nowhere near a flood.
But we havent seen that… inventories are at historic lows, with seniors largely staying put.
Popular Destinations for Those Who Move
That said, some relocation trends can be observed.
Those boomers who do leave Massachusetts often head for traditional retirement havens.
Florida and Arizona remain popular destinations, as warm weather and tax advantages beckon.
But importantly, even these moves are happening gradually and individually, not as a broad wave.
Theyre either staying put or, in a smaller subset of cases, leaving the state upon retirement.
Post-Financial Crisis Recovery
In the aftermath of the 2008 financial crisis, many boomers delayed retirement moves.
In 20152017, talk of a looming silver tsunami began, yet listings from older sellers remained subdued.
Notable Changes in Recent Years
There have been a few notable changes in the recent period.
One is the rise of inter-generational competition for housing.
Interest Rate Impact
Another difference is the interest rate environment.
In practice, many still stayed put, but those who did move could finance cheaply.
This was a stark change from prior years when millennials led the pack.
