Written By: Linda Nelson - Compass Realtor ~
Did you know that Baby Boomers are one of the strongest forces in the global home buying market? Let's bust a myth: while many believe younger generations like Millennials are the primary home buyers, it's actually the older folks leading the charge. Why? They've got the financial power, thanks to paid-off mortgages, decades of savings, inheritances, and more. In fact, Baby Boomers, those born between 1946 and 1964, now represent a whopping 39% of home buyers, a jump from 29% in 2021. Meanwhile, Gen Z is at 4%, with many moving straight from family homes into their own property.
Surprising? Well, some of the most affluent home buyers aren't the young tech or crypto millionaires but those who've accumulated wealth over a lifetime. And they're spending it, often with a sense of urgency to enjoy life to the fullest.
What are Baby Boomers Investing In?
- Dream Homes: Spaces large enough for the whole family. Think swimming pools, tennis courts, and resort-like features that entice the grandkids.
- Additional Properties: They're snapping up second or third homes, even ones that appeal to first-time buyers.
- Tax-Friendly States: To protect their wealth, many are choosing states with lower costs and taxes.
- Sunnier Spots: A good number are heading to warmer climates.
- Family Proximity: Moving closer to their children is a big incentive.
- Trophy Properties: Those who've had business or stock market success are splurging on standout homes.
- Multi-use Homes: Buying properties with multiple structures, either for extended family or help.
- Single-Level Living: As they age, many prefer homes without stairs.
- Low Maintenance: With travel in mind, they're opting for properties that are easy to lock up and leave, like staffed condos with shared amenities.
- Smart Investments: Some are using 1031 exchanges to diversify big assets into multiple smaller ones, avoiding hefty capital gains taxes.
- First-Time Buyers: Believe it or not, 46% of older Baby Boomers are buying their first home, often in affordable areas or retirement communities. After years of renting, owning a home is a cherished dream.
In summary, older generations, particularly baby boomers, possess substantial purchasing power in the real estate market. Their financial stability and unique preferences shape the industry and drive various trends.