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Silent Generation continues to downsize their housing

(HOMEOWNERSHIP) The Silent Generation are market shakers, it’d be unwise to ignore them.

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Housing market

Studying the 2016 housing data by generation is highly interesting. For the Silent Generation alone, it has brought forward some surprises that realtors may not necessarily expect.

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While this generation doesn’t have the dollars to live the high life, they often made choices, for example, downsizing to newer homes, which made them a significant force in the market. Ignoring them will be a mistake.

Home buying

The Silent Generation, people born between 1925 and 1945, only account for 8% of all homebuyers in 2016, the smallest share by generation.

This should not come as a surprise if you also consider that they are the generation with the lowest median household income at $66,600, likely living off their retirement funds.

Consequently, when they do buy homes, it is usually in the second lowest median home price bracket, at $220,000. They are also most likely to buy a home in senior-related housing at 24 percent.

The reasons seem to be self explanatory—at median age of 75, these buyers aged between 71 to 91 years tend to have the smallest families.

They hardly share space with dependents, like children—only about 3% have children under 18 living with them.

Somewhat surprisingly, in 2016 the Silent generation made the highest share (21%) to buy the newest homes, with a median house age of 1999.

Type of houses

The data also reveals two related extremes. On one hand, this generation accounts for highest share of single male buyers at 10%, perhaps due to divorce or death of a partner; on the other, at 91%, they make up almost all of the housing economy who are likely to move from an already owned home, due to downsizing.

Correspondingly, the Silent Generation also forms the smallest share of first-time homebuyers at 4%.

As a consequence, the reason for buying a multi-generational home within this generation is negligent—a share of only 11%, mostly to take care of someone ailing. Much more likely, the data reveals, these buyers purchase the highest share of a duplex, apartment, or condominium (17%) and townhouse (9%).

The data also clearly reveals that while the Silent Generation forms the highest percentage of homeowners who’d choose a neighborhood home with proximity to shopping (39 percent)

They are also the highest share among generations to purchase a smaller home and to be closer to friends and family (both at 23%).

Interestingly enough, the Silent Generation is in tandem with the Millennials, for the shortest expected tenure in the home with a median of 10 years, admittedly for very different reasons.

Least likely

As already established, the Silent Generation is not exactly the upgrading type. They are the generation that is most likely to move due to a household member’s health and least likely to move for a nicer home.

#silentgeneration

Barnil is a Staff Writer at The Real Daily. With a Master's Degree in International Relations, Barnil is a Research Assistant at UT, Austin. When he hikes, he falls. When he swims, he sinks. When he drives, others honk. But when he writes, people read.

Homeownership

The Granny Pod could be the alternative to nursing homes (and why people will soon demand bigger back yards)

The Granny Pod looks like a guest house and sits conveniently in any backyard – they plug right up to existing plumbing and electrical and allow both caregiver and senior to have their own space while remaining connected.

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I’ve spent most of my life living everywhere but the United States, and from what I’ve seen in other cultures, when couples tie the knot parents come with the marriage! That doesn’t necessarily mean the parents live with the kids (although I’ve seen that in countries like Japan, Korea, and Turkey), but I feel safe saying that it’s a given the kids will taken in/take on/take over their ailing parents at some point in said parent’s lives (Italy for example).

I’m not sure the US is set up that way. The big business of senior living facilities and nursing homes tells me otherwise.

But that might be changing thanks to the Granny Pod and similar mono-living facilities that can be installed in a person’s backyard (which is why we suspect people may demanding bigger back yards in coming years).

Close, but not TOO close

MedCottages or “Granny Pods” seem to be a viable solution for taking care of elderly family members without giving up the independence Americans put so much emphasis on.

A recent story explains that Reverend Ken Dupin created the MedCottage as an alternative to nursing homes, as 78 million baby boomers head toward retirement.

These 12 feet by 24 feet pods can sit conveniently in any backyard and plug right up to one’s existing plumbing and electrical. The pods allow both caregiver and senior to have their own space while remaining connected.

Retiree support for Granny Pods

For its part, AARP, the lobbying group for aging Americans, has gone on record to assert that local zoning laws pose one of the biggest obstacles to making such dwellings a practical solution to caring for aging family members in what it calls “accessory dwelling units.”

AARP spokesperson, Nancy Thompson said “the MedCottage has some of the features the organization advocates in accessory dwelling units, but not all of the universal design features that could be useful for people of all ages.” She does add that it’s a step in the right direction for accessory dwelling units.

No more condo fees

I’m no social worker, but studies bear out that human contact is vital as we grow older. Even in a worst case scenario (when an individual living in a nursing home is alone in their room for much of the day), they at least meet other patrons at lunch or dinner, and at whatever social outings are plugged into a daily schedule. For all the close circuitry and monitoring the Granny Pod offers, I don’t know if it takes the place of human contact, so hopefully families will remember the ties that bind them and do more than just monitor a screen to see if Granny is okay.

Another benefit of the Granny Pod is that once it’s paid for and installed, that’s it – no more monthly rent or condo fees that can deplete a retiree’s resources.

Granny Pod starting a movement

According to the Washington Post, other companies seeking to make similar structures are Seattle-based FabCab (whose name comes from Fabulous Cabin), and San Francisco-based Larson Shores Architects, which designs what it calls “Architectural Solutions for the Aging Population,” or ASAP, and its “Inspired In-Law” dwellings” demonstrates that assisted living facilities aren’t the only item on the menu.

As this type of structure catches on, it may threaten nursing homes and even retirement condo villages, and could influence the sizes of yards builders offer in coming years. Industry practitioners should be aware of the trend, and be able to offer this type of setup to clients who are actively considering options for their parents (the solution may just be a bigger back yard).

#GrannyPods

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Homeownership

Real estate association launches impactful video – I’m not crying, you are

(HOMEOWNERSHIP) The dream of owning a home is under assault – one real estate association has launched a massive awareness campaign that is truly meaningful.

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The Ontario Real Estate Association (OREA) has launched a new site, KeepTheDreamAlive.ca to lobby locals to “keep the dream of home ownership alive.”

America is not the only nation with diminishing affordability conditions, rising prices, and limited inventory. No, Canada is experiencing a similar market, and OREA is taking action to make sure those people hoping to own have the chance to do so.

“Millennials want to own homes but it’s never been tougher to achieve,” the organization notes. “Rising home prices have pushed home ownership out of reach. All their hard work and saving just isn’t enough to compete with rising prices.”

The KeepTheDreamAlive.ca site offers homeownership statistics and makes it easy to email their candidate to express the importance of the dream of ownership.

The video is moving. Prior to watching, we assumed it was another feel-good video about how neat homeownership, but to end it in broken dreams is more realistic than what you’ll see here in America.

We hope that changes. In America, the National Association of Realtors (NAR) is extremely realistic with data and they have long been very vocal on people being squeezed out of the market. And the major real estate sites paint a sunny picture of home searching and making the dream come true, but none reach as far as OREA has, to express that homeownership is simply out of reach for otherwise qualified people.

Send a link to this story to your local and state Associations as they consider their plans for marketing outreach next year. Perhaps it’s time to empower local homeowners to contact their representatives, lest they remain unaware of the big picture.

While NAR has repeatedly noted that three things will alleviate the pressure on the market (investors putting inventory on the market, builders stepping up production, and more current homeowners opting to sell), overall awareness that homeownership is out of reach for many can put a spotlight on these conditions in each market.

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Homeownership

Consumer confidence about money is up, but not optimism about buying a home

(REAL ESTATE) Consumer confidence is way up about the economy, but many still don’t feel it’s a good time to buy – here’s the data behind this contradiction.

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In the first quarter of this year, consumer confidence regarding their personal finances and the economy rose, yet this confidence is not translating to optimism that now is a good time to buy a home, according to the National Association of Realtors (NAR) “Housing Opportunities and Marketing Experience” (HOME) survey.

In fact, positive feelings that it’s a good time to buy a home is at its lowest share in the past two years, and even lower among renters. The strongest concentration of those that did feel positive about buying are homeowners in the South and Midwest where housing is more affordable.

The survey also indicates that owners feel positive about selling, while non-homeowners are feeling anxious about qualifying for a loan and saving for their down payment.

NAR Chief Economist, Dr. Lawrence Yun says extremely challenging market conditions to start the year are chipping away at homebuyer optimism. “The critical shortage of listings in most markets continues to spark a hike in home prices that is not easy for many buyers – and especially first-time buyers – to overcome.”

“Adding more fuel to the affordability fire is the fact that mortgage rates have shot up to a four-year high in just a few months,” added Dr. Yun. “Many house hunters are telling Realtors® that they are dispirited by the stiff competition for the short number of listings they can afford.”

He notes that if more homeowners decided that spring is the best time to list their home (especially after amassing equity), supply conditions would “improve measurably, and ultimately lead to more sales.” We would add that the HOME survey’s confidence indices would also shift.

Consumer confidence is up, but of particular note, non-homeowners are anxious about saving for a down payment. Nearly half indicating limited income was a primary reason, followed by student loan debt (30 percent), rising rents (28 percent), and health expenses (14 percent). Only 14 percent said nothing was holding them back.

The survey also indicates anxiety over qualifying, with 45 percent claiming the reason is income uncertainty. One in three said their credit score would hold them back, and 26 percent said they were carrying too much debt. Nearly one in three said they don’t know the first step they’d need to take in order to qualify, so a lack of financial literacy is holding a portion of the market back.

“It’s never too early for those wanting to own a home in the future to sit down with a lender to discuss their current financial situation,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “Homeownership could be a more attainable goal once an interested buyer finds out how much they can afford to buy, as well as what steps, if any, are needed to improve their chances of obtaining a mortgage.”

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