MassInc, a public interest research group, released their newest report this morning, "A Generation in Transition: A Survey of Bay State Baby Boomers." The survey asked 1,000 baby boomers in Massachusetts about "their current circumstances and future plans for work, retirement, [and] housing…"
One key finding parallels a phenomena The Real Estate Cafe has witnessed working with home buyers in suburban Boston, where it sometimes appears that neighborhoods are "turning over:"
"The survey also foreshadows a new boomer exodus from Massachusetts – exacerbating the state’s population loss challenge. More than one-third of baby boomers (35 percent), roughly 650,000 people or 10 percent of the state’s population, want to retire outside of Massachusetts."
"There are 1.83 million boomers in Massachusetts, accounting for nearly 30 percent of the state’s population and roughly 45 percent of its workforce. The first baby boomers turn 60 in January 2006."
About a decade ago, 2006 was the date some economists predicted
would be a tipping point in the housing market. More recently
industry observers have said that housing demand from baby boomers is
increasing, and that traditional assumptions about downsizing and
relocating are obsolete. MassInc’s report demands closer reading to
make more sense of those conflicting scenarios.
While I’ve yet to read the full report, my working hypothesis is
that the "Mass. exodus" — pun intended — is bad news for sellers who
are already confronting falling prices, a record number of expired listings, and the first buyers’ market in a decade.
650,000 people represents about ten years worth of housing inventory.
Granted, not all baby boomers live alone, so cut that number by half or
one third. That still leaves five to seven years supply of housing,
presumably single family homes. How fast will they come on to the
market? What impact will those units have on sales prices, especially
if energy prices and interest rates continue to rise?
My guess is that those kind of questions are addressed in the report,
and will be discussed in a roundtable discussion on Friday, December 2,
2005, 8:00 to 10:00am at the Westin
Copley Place Boston. Until then, your comments are welcome here
online, or on The Real Estate Cafe’s readers’ line, 617-876-2117.