Just San Ramon Homes

Who Will Buy Your Home When You Sell?

East Bay Home Buyers

You may be surprised to learn that it may well be bought by a Baby Boomer.

Baby boomers may be keeping the US economy afloat….. Americans aged 65 and up accounted for about 17% of the population but 22% of spending in 2022, the highest share since records began in 1972 and up from 15% in 2010. Americans age 70 and older now hold nearly 26% of household wealth, the highest since records began in 1989. Extended periods of patient saving and investing with compounding interest adds up over time.

Older generations may be the most potent home buying demographic of all, globally. While theoretically, we are often tempted to believe otherwise and focus attention on Millenials, it is older people with paid down mortgages, investments in equity markets, compounded interest savings over decades, no more costs to pay for kids, sales of companies built over decades, inheritance, etc, etc. Baby boomers – people born from 1946 to 1964 – now make up around 39% of home buyers – the most of any generation – an increase from 29% in 2021. Generation Z now makes up 4% of buyers, with 30% of Gen Z moving directly from a family member’s home into homeownership.

What are Baby-boomer Buyers buying?

  • Often they are buying their ‘dream home’ big enough to attract their entire family. Smart grandparents know how a pool or tennis court or other resort-style amenities makes grandkids visit!
  • Many seek warmer climates.
  • Many are moving to be closer to where their kids have moved.
  • Some are buying homes with more than one structure, such as an ADU, for multi-generational use or to house help.
  • Some are focused on aging in place, seeking single floor living.
  • Some who have rented out a large primary home as an investment for the past few years are now doing 1031 exchanges to avoid large capital gains taxes, diversifying the one big asset into several smaller assets or a multi-unit property.

So while historically, it seems that many recent sales have been to younger families, it seems likely that the demographics in our area may be changing in the next few years.

 

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