Recently I wrote about how construction since the Recession has not kept pace with population increases and household formations leaving the nation with millions fewer homes than it needs, which has driven up prices. Because construction isn’t keeping up the supply end of things, people are staying in their homes longer – especially older people.
You see, the real estate market is a “circle of life” industry whereby the young start out small and move their way up until the kids are gone and they’re older, at which point they downsize to lower-maintenance properties. This makes room for the next generation to move up to the next level.
According to FreddieMac, 1.6 million senior-owned homes are not shuffling along the real estate conveyor belt to make way for a new generation. That’s essentially a typical year’s worth of new construction and over half the estimated 2.5 million home deficit the country struggles with due to over a decade of underbuilding.
The hot term is “aging in place” and I see the appeal of living independently – just maybe not in an oversized house I can’t take care of. Of course part of the reason those 1.6 million senior homeowners aren’t moving is because there’s nowhere to move. It’s not like the construction industry was building retirement facilities instead of homes for the past decade. There’s not a ton of empty Shady Pines and Gossamer Meadows out there gathering dust.
And that’s not all.