Real Estate News

4 factors which may impact future housing sales to seniors

Published: 26 Jan 2017

Looking forward in the housing sector requires thinking about what the new buyers will look for in their next homes. It also means thinking about the possible changes coming to the market, from both business conditions and the new government administration.

Another major factor is demographics. While many have spoken about the millennial generation's interest in housing, there's something to be said for the older buyers, who may need homes that aren't as available as they could be. A report from the Joint Center for Housing Studies of Harvard University looked at this issue, noting that a fifth of the entire U.S. population will be more than 65 years old less than two decades from now.

With that in mind, here are some important considerations which could have a lasting effect on the market.

#1: Older residents will demand specific housing
One of the larger concerns is how friendly the new crop of houses being built will be for older residents in the future. Right now, the report said, the majority of households 65 and older are living in single-family instead of multi-family houses.

There are, however, other options for the aging resident, such as mobile homes or non-traditional houses, and the report suggested that different housing types could appear on the market in the future.

It is important to note that larger multifamily homes are, according to the report, more likely to have extra wide doors, entrances without steps and other features that promote accessibility. In addition, older homeowners could be more at risk of facing inadequate homes with infrastructure problems, such as leaky roofs and broken utilities.

#2: Retrofitting may be necessary, but so will affordability
Because of the issues with available homes, it makes sense that some will have to redo existing buildings for more accessibility. On the other hand, the older generation will need to find a place within their price range, and that could mean a change to the way homes are set up. 

In a Forbes interview, Real Property Management CEO Lukas Krause said that supply needs to increase to meet the incoming waves of demand. Likewise, retrofits will need to keep these homes accessible and attract new buyers.

#3: Cohabitation could become a trend
This might be something buyers and realtors need to work against, or at least adapt to. As a means of finding housing, Krause said that some may choose to live with others instead.

"I think given affordability concerns, people will find alternative solutions," Krause said. "We'll see mother-in-law suites growing in popularity. Grandparents haven't been living with their families the way they did in previous generations. We might see the pendulum swing back, with multiple generations living in one home."

Homes that aren't equipped for single older residents could, instead, eventually house more than one person. But this might also be less preferable, in the grander scheme of things, than a market where senior buyers feel able to actually invest.

#4: The older generation could have better spending habits
It may be true that seniors have cost restrictions, but they also seem to be able to pay off their housing debts, according to the Dallas Morning News. The source spoke to National Association of Home Builders Paul Emrath, who said that baby boomers are the ones "paying cash" when they look for a new home.

Despite the expected arrival of more Millennials in the homeowner sector, this immediate capital arguably puts boomers at a bigger advantage, especially if they have previous homeownership experience.

Securing new (or old) property will require title insurance for full assurance of ownership. Without this, older homeowners with extensive needs may have to pay for their own legal fees out of pocket.