Baby Boomers Retired At A Record Pace In 2020. Here’s Where They’re Looking To Move
Baby Boomers—the generation born between 1946 and 1964—handed in their resignations at record rates in 2020. On average, 2 million boomers have retired each year since 2011, according to an analysis by Pew Research Center. But in 2020, that number rose to 3.2 million people. Researchers speculate the pandemic might have sped up retirement decisions for some.
If boomers’ jobs (or decision to leave the workforce) were influenced by Covid-19, so were their home values. As most boomers are homeowners, they likely benefited from the staggering upsurge in home prices across the country.
In the fourth quarter of 2020, 88% of the housing markets in the U.S. had double-digit home price appreciation, while national median prices rose 14.9% year-over-year to $315,900. For homeowners, this was a welcome gain to their bottom line.
Today’s homeowners who want to cash in on that equity without taking out a home equity loan have to downsize, move to a cheaper area or find other living arrangements that don’t necessitate getting back into a hot seller’s market.
“Some Baby Boomers are selling, but others are buying vacation homes. They’re downsizing, for the most part,” says Rich Schulhoff, CEO of Brooklyn MLS, a New York real estate listing service. “Another trend is that South Carolina and Florida are attracting large numbers of Baby Boomers, as well.”
Home Ownership Rates by Age
Older Baby Boomers Made Up the Largest Share of Sellers
Baby Boomers aged 65 to 73, or the older segment of that generation, sold their homes at a higher rate than any other age group in 2020. They were also the group most likely to move the furthest distance after selling, with the median distance being around 40 miles.
“Most retirees make their decision about where to move based on where their children live. Oftentimes I find that clients want to move closer to their children or grandchildren,” says Yawar Charlie, real estate agent at the Aaron Kirman Group in Los Angeles. “However, if the couple doesn’t have children, they don’t really feel the need to live that close to their immediate family, they really want their dream retirement home. Usually, this is near or on a golf course, a beach or warm-weather destination.”
The top 10 most popular places for seniors to search for homes were, unsurprisingly, all in Florida. Sunshine State areas that attracted homebuyers were all in proximity to beaches except for Ocala, located in the center of the state, according to an analysis by Realtor.com. The site looked at for-sale listing views to homes across the country originated from residents of 371 postal codes with at least 40% of the population 65 or older.
In 2020, markets in the Carolinas and Georgia saw a greater increase in popularity than some traditional Florida retiree markets.
4 Things to Consider Before You Sell Your Home
Whether you’re selling your home and moving down the street or across the country, there are some serious factors homeowners should keep in mind before planting a “for sale” sign in the front yard. From getting your house ready for prospective buyers to financial questions you should ask before moving, experts offer their best advice for retirees looking for their next dream home.
1. Do a Cost-of-living Analysis if You Plan to Leave Your City
Ready to swap snow boots for flip flops? Experts say that before you make a move outside of your city, examine what it will mean for your wallet.
Homebuyers should talk to their real estate agent in the new area about local property taxes, insurance costs, homeowners association fees and any other expenses related to your new area and home. Average power and water bills also can vary by state.
“Insurance considerations can also be discussed with their Realtor to determine the flood zone, fire hazard zone and other insurance-related issues which can create cost variances for property insurance. Of course, any other tax differentials should be discussed with their tax accountant for full clarity,” says Mary Lee Blaylock, president and chief executive officer at Berkshire Hathaway HomeServices California Properties.
For folks moving from the suburbs to urban centers (or vice versa), there might be a cost difference. Apartments and condos in urban centers typically cost more per square foot than houses in the suburbs, but those higher costs might be offset by not needing a car (which could mean savings on car payments and insurance).
“Social Security benefits are not taxed, but for partial retirees or those who have income from investments, the state and local tax rate in the new area is important to consider,” says Erin Sykes, chief economist at Nest Seekers International. “Similarly, it is important to research if there is a death tax in the new area as that can diminish the amount of inheritance that you could pass on to your family.”
2. Get a Current Home Appraisal
Make sure you know exactly how much your home is worth before you sell it or put it on the market. This is especially important if you don’t plan on listing your home, but decide to sell to someone you know.
“The market is moving at such a fast pace that any appraisal obtained on one date could become obsolete in a shorter than normal period of time,” Blaylock says.
Consult an experienced real estate agent, as they can pull comparable properties for sale in your area in addition to properties that have sold recently to come up with an accurate estimate.
3. Take Time to Organize, Store and Purge
If you’ve lived in your home for decades, chances are you have built up quite a collection of possessions—from the useful to the useless and even redundant (there are probably many households that have several can openers, hammers, tire pumps and other multiples of things).
And it might not all be yours. If you have children, then you probably have some of their stuff, too. Before you put your home on the market, experts say it’s a good idea to declutter.
Depending on how much you have, this could be a long process, so give yourself plenty of time. There are even companies out there that can help you sort, organize and toss.
“When you’ve lived in a home for 20 to 40 years, you can collect lots of stuff. Allow a new buyer to see all the space they are buying and be able to think of it as a fresh palette,” says Lindsey DellaSala, real estate agent and owner of The DJ & Lindsey Team in Jacksonville, Florida.
4. Invest in Small Repairs and Curb Appeal
Take stock of minor repairs and updates to your home before you start showing it. Small fixes can help juice your profits in today’s seller’s market. These can be low-budget projects that give your home a clean, bright feel or minor tasks, like changing out old light bulbs.
“The housing market is very hot right now, and you want to make sure that you get the most out of it,” says Charlie. “Little things that people can do to enhance curb appeal include planting a beautiful garden, [or] a fresh coat of paint will add value to your home before putting it on the market. For a lot of people retiring, the home that they live in is a large chunk of the retirement nest egg, and you want to make sure that you maximize the proceeds when you go to sell.”