Baby Boomers in the United States are looking to downsize and enjoy a comfortable lifestyle, ditching single-family homes for apartments in urban centers. Conversely, the younger generation is migrating toward the suburbs.
While Millennials are partly responsible for the last decade’s rapid decline in urban living, Baby Boomers actually had an even greater influence on the trend. According to the latest Emerging Trends in Real Estate Report by Urban Land Institute and PwC, the urban population aged 20 to 29 rose by 4.7 million. However, the number of people aged 55 to 64 living in downtown also increased – by 10.3 million.
Consequently, despite the Millennials’ affinity for high-rise buildings in emerging neighborhoods, most of the properties might end up occupied by older renters, instead. That’s because, compared to their children, Baby Boomers are more financially stable and can afford to rent in urban centers.
Baby Boomers Attracted to Downtown Apartments
It’s common for empty nesters to move downtown when children leave the house. However, U.S. Census Bureau figures indicate that the largest increase in the renter population is correlated with the 55-and-older population. The number of renters in this age group rose 38% between 2007 and 2017, and the number of renters aged 65 and older increased by 65%. Meanwhile, the percentage of renters aged 54 and under grew by only 10%.
According to Curbed, several trends led to this growth. First, Americans now work and live longer than they used to. As such, they are looking for more active types of senior living. Another factor is that moving to a smaller, downtown apartment within the budget is much easier than living in a large, suburban mansion.
Amenities – such as transit and proximity to restaurants and shops – which are appealing to Millennials, are also sparking the interest of their parents. Since they begin to experience decreased mobility as they age, Boomers are attracted by the ease of elevators, as well as reduced maintenance and assistance from building staff.
What Baby Boomers Look for When Moving
Generally, older residents are searching for homes somewhere between the size of a suburban home and a starter home. This means that developers are looking to build homes with two or three bedrooms to fit their needs. Boomers are also looking for walkability, fitness centers, and other amenities that interest Millennials, as well.
According to Harvard’s Joint Center for Housing Studies, by 2035, one in three homes in the United States will be owned by someone older than age 65. Specifically, the forecast projects that, by 2038, the number of households owned by individuals aged 70 to 79 will reach 10.7 million, while the number of 80-and-up households is expected to hit 17.5 million. However, most homes are in dire need of upgrades; only 3.5% of U.S. homes are currently equipped with the necessary safety and mobility features for older adults who aim to age in place.
Considering the potential of senior housing markets, developers are envisioning a series of options targeted toward different age groups as Boomers get older. From standard apartments to assisted care facilities that offer support staff and increasing amenities, developers are prepared to cater to every stage of their lives.
Millennials Transforming the Suburbs
While Baby Boomers are transitioning to the urban lifestyle, unaffordability is pushing Millennials toward suburbs close to urban centers. As they migrate, Millennials are revitalizing these areas, transforming them into the so-called “Hipsturbia.”
While they may prefer urban core living where they can live, work and raise a family, the younger generation is reviving suburban areas by creating their own urban, walkable lifestyle. And, developers, urban planners, municipalities and other stakeholders are ready to make it happen. The most important factor of a “Hipsturbia” is a hip downtown to resemble the urban cores that the Millennials are leaving behind.
Anita Kramer, senior vice president of the Center for Capital Markets and Real Estate at Urban Land Institute, said in Forbes:
“It’s ironic when you think these Millennials did grow up in the suburbs, where now you have empty nesters selling their homes and moving to the cities. There was always a question if these Millennials would follow in their parent’s footsteps to the suburbs.”
While generations are migrating in different ways, both are looking to be near communities. Whether it’s renting an apartment in a new, planned community or constructing a new version of walkable lifestyle, there’s a lot of potential for real estate in the coming years.