The dream of selling their home for a retirement nest egg will hatch into an albatross around the neck of many Americans, according to new research forecasting that millions of homes will become unsellable in the coming years.
A study from the University of Arizona predicts that baby boomers and Gen Xers will not be able to sell the home they’ve spent decades paying for because millennials and Gen Zers aren’t interested in, or can’t afford, the properties.
The research predicts that the shift in home-buying patterns will result in a glut of houses that could climb to as high as 15 million by 2040. This will see homeowners forced to sell their properties for far less than what they paid for them, if they can find a buyer at all.
Urban planning and real estate expert Professor Arthur C Nelson carried out the research and dubbed his prediction “The Great Senior Short Sale” in a paper published this week.
Professor Nelson said that the phenomenon threatens to undermine one of the “big promises” of homeownership: that a home can be sold for a retirement nest egg. “What if you pay off your mortgage over 30 years,” he said, “and nobody buys the home?”
“There’s the mismatch – if those over 65 unload their homes, and those under 65 aren’t buying them, what happens to those homes?” he asked.
Nelson noted that millions of people will still buy some of the homes that older generations are selling. However, he cautioned that the supply is so large and the demand will be so small that it’s going to develop into a significant problem within 10 years.
The issue is expected to get progressively worse over the coming decades, with up to one million unwanted homes racking up every year. The problem will be particularly acute in suburban and rural areas.
“We’re going to wake up in 2025 – give or take a few years – to realize that millions of seniors can’t get out of their homes and that it’s going to get worse into the 2030s,” Nelson warned.
The research stirred up a significant response on social media and a notable feature of the reaction was that it seems that absolutely nobody was surprised by the news.
How could it be otherwise? Millennials aren’t having children, don’t need or want big homes, let alone being able to afford them. https://t.co/PkenLfAyfY
— Cernovich (@Cernovich) August 13, 2020
“How could it be otherwise?” conservative blogger Mike Cernovich asked. “Millennials aren’t having children, don’t need or want big homes, let alone being able to afford them.”
However, it wasn’t all gloomy takes, some predicted that the Covid-19 pandemic will increase the popularity of suburban and rural areas, while others were simply looking forward to buying homes at knockdown prices.
Not gonna lie though, I’m looking forward to the fire sale.
— Supreme Coofer Christopher Valence 🇨🇳🦠 (@ChrisValence) August 13, 2020
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