Why boomers won't sell their big houses in the Bay Area
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Empty nesters own more than a quarter of the Bay Area's family-size homes, according to a recent Redfin report.
Why it matters: San Francisco has a well-documented housing shortage and affordability crisis, and sky-high interest rates are putting home ownership out of reach for many millennials, unless they have help from family.
By the numbers: In the Bay Area, empty nesters (boomers with no more than two people living in the household) own 26% of large homes, which is defined as having three or more bedrooms.
- Millennials with kids own nearly 11% of large homes in the area.
State of play: The problem for many younger families is baby boomers don't have much motivation to sell, according to Redfin senior economist Sheharyar Bokhari.
- Boomers typically have low housing costs, and most of them "are only in their 60s, still young enough that they can take care of themselves and their home without help," Bokhari said in the report.
- Still, boomer wealth isn't evenly distributed, as an estimated 17 million people over 65 are considered economically insecure, according to the National Council on Aging.
What they're saying: One Oakland-based boomer couple, Deborah Frieden and her husband, wants to downsize, but many of the available, accessible condos "feel and seem like they're built for young people," Frieden told Business Insider last month.
- While some condos advertise their gyms, shared courtyards and bike racks, Frieden would prefer a unit big enough to have a guest bedroom and ample storage, and is in a walkable area.
- She argues that real estate developers are missing out on an opportunity to target empty nesters who aren't looking for traditional senior housing, but simply want condos that "are more versatile and appeal to people who have a little bit more money."
Reality check: Seniors are still downsizing, sometimes to luxury apartments.
- Of 1,020 boomers Opendoor surveyed nationwide who plan to sell their home, 85% said they intend to do so in the next three years.
The big picture: Homeowners nationally are holding on to their homes nearly twice as long as they did in 2005, Redfin research shows.
- Many of those staying put are aging in place. Most baby boomers who own houses are mortgage-free or have a low interest rate, according to the brokerage.
What's next: Many young families are renting single-family houses.
- Those who want to purchase a spacious home should consider new construction, especially since some builders offer perks like mortgage-rate buydowns, Bokhari said.