When looking for a smaller living space, buyers definition of square footage can change, too.
By Myrna Traylor
As they have done for decades, the baby boomers are exerting an influence on the marketplace. When it comes to their so-called empty-nester home sales and purchases, this age group is making interesting choices that affect builders and REALTORS® alike.
According to the 2015 NAR report on Home Buyer and Seller Generational Trends, younger boomers (born 1955-1964) and older boomers (born 1946-1954) comprise 31 percent of homebuyers, nearly matching the 32 percent share of the market held by the youngest and largest segment of buyers, the millennials/Gen Y/Gen Next (born 1980-1995). But purchases made by the boomers differ in terms of the primary reason for buying. As opposed to the youngest and Gen X (born 1965-1979) buyers who are purchasing a first home out of a desire for home ownership, many of the younger boomers cite job relocation (16 percent) and a desire for a smaller home (13 percent) as their reason for buying, while older boomers are looking for a home in which to spend their retirement (15 percent).
When it comes right down to it, though, what are these buyers looking for?
Less Square Footage (but Not Really)
As is often the case when it comes to determining buyers’ true desires, what they say they want is somewhat different from what they will actually choose once they are presented with a specific property. Jean Groesbeck, CRS, SRS, Certified Real Estate Instructor WA, of Coldwell Banker Bain and Jean Groesbeck & Associates, LLC, in Anacortes, Washington, reports that most of her clients want to downsize. ”Most often, downsizing also involves the need to purchase smaller scale furniture,” she says. ”And most boomer buyers have a hard time parting with their stuff, which, in turn, makes room size a challenge. I’ll find a client the perfect house based on what they say they want. They say the rooms are too small and they want the same floor plan [as their current home] with larger rooms, only they don’t want more square footage! Most clients dont understand how a square footage number works. They just pick a random number that is some percentage less than what they have.”
Antonia Toni Connors, CRS, GRI, ABR, CSP, of Nothnagle REALTORS® in Pittsford, New York, has had a similar experience with some of her buyers. ”In my opinion, they do not want to relinquish much square footage, but they do want first-floor living,” she says. Her buyers also want to have dedicated spaces for home offices, man caves or craft-and-hobby rooms, which can support work or leisure activities as the residents transition into retirement.
Time to Fly
Barbara Carroll, CRS, GRI, of Randall REALTORS® in Rhode Island, hates the term “empty-nester.” She advises clients to think of this phase in their lives as “re-nesting.” Here are some of the tips REALTORS® can share with their own clients:
- Set aside about a year to de-clutter your home. As you free yourself from all your belongings, you’ll start to feel better.
- Tell your kids to come get their stuff. Tell them you will rent a storage unit for two years for anything they can’t take away, but after that they either have to pay for the storage or get rid of whatever is inside.
- Calculate how much you could save in taxes by moving to a community where there are fewer or no schools, such as a resort community with few year-round residents. Think about what you can do with this extra money.
- Don’t be emotionally tied to your biggest investment. You can probably sell the house for far more than you could get out of a reverse mortgage; you’re not going to get 100 percent of the appraised value in that arrangement. If you are thinking about it, talk to an accountant about how funds derived from a reverse mortgage will affect your Social Security and Medicare payments.
Another factor working against keeping total square footage down is the number of bedrooms buyers want. Besides a well-appointed master, these buyers look forward to having rooms for grandchildren or other visitors, particularly if the home serves—at least initially—as a second, vacation home. And buyers who are planning on aging in place want separate quarters for a caregiver, whether that is a family member or paid helper.
So, in a very general estimation, Connors sees that couples who are leaving homes of 3,000 to 6,000 sq. ft. will be satisfied with 2,400 to 3,000 sq. ft. “The single 55+ buyers will usually look for the same 2,200+ sq. ft. minimum if their house [before widowhood or divorce] was 3,000 sq. ft. or more,” she says. Buyers who are leaving homes of 2,000 sq. ft. or less are usually happy with 1,200 to 1,400 sq. ft. in their new home.
Features and Amenities to Suit a New Lifestyle
Beyond the question of square footage, CRSs are helping prospective buyers appreciate how a new home will support a lifestyle that balances the leisure of retirement with the possibility of a change in personal mobility. With retirement comes the opportunity for recreation and travel, so buyers are very interested in either condos or townhouses where outdoor maintenance is handled through condo or HOA fees. Amenities such as gas fireplaces that don’t require hauling in wood are also a plus, as are energy-efficient homes that can keep operating costs low.
The personal mobility issues may not, however, be top of mind. “Some people say they don’t care about having stairs,” says Groesbeck. ”But then I ask them how many of their friends have had knee or hip replacements, or if a hospital bed could fit into a main-level room, and then they see the advantage of main-level living.” Even when it comes to resale values, Groesbeck counsels buyers about undertaking small renovations that make the home more accessible or not shunning those features if they are already in place.
”If you think about features such as a lower counter in the kitchen or grab bars in the shower—as long as they are architecturally cool—the cost for those features is much less than the cost of getting in-home care or moving to an extended care facility any sooner than you have to,” says Groesbeck. “It’s all part of buyer counseling.”
”I find that when clients say they want to downsize, what they most often mean is that they want to simplify and reduce monthly expenses,” continues Groesbeck. “I believe the mindset of the boomers has been forever changed by the Great Recession. The boomer buyer has lived through the inability to sell real estate during down times, and now they are very concerned about holding costs and potential appreciation. It plays a significant factor in their purchase decision and often trumps the other features of a home.”
Read more about baby boomers buying trends.
