Even the tiniest of factors can have a huge ripple effect on the housing market. A small increase in interest rates can tank demand for mortgage loans. The building of a new school can spike demand for local real estate. There are countless other examples of these impacts, but it is important to recognize that larger trends have had an outsized impact as well.
One of the most significant demographic changes that will impact the world of real estate is the aging of the population. You may have noticed that there are more older workers at the grocery store and fewer strollers at the playground, and those perceptions are not your imagination. The population is indeed getting older, and the impact on future real estate sales is likely to be both long lasting and profound.
Longer Working Lives
One of the most interesting of these demographic shifts involves the lengthening of working lives. These increases in working lives are sometimes a matter of choice – bored retirees reentering the workforce in exchange for some extra spending cash. In other cases the reentry is a matter of financial need – seniors worried about outliving their savings and unable to stretch their Social Security checks as far as they would like.
No matter what the reason, the increase in the length of the average career is likely to have an impact on the housing market. Retirees who are looking for a simpler way of life may choose the simplicity of a retirement community, while parents of adult children may opt for co-housing situations and multigenerational households. Either way it is bound to be disruptive to the real estate industry, and the ripple effects are already being felt as the population ages.
Another interesting trend involving the aging of the population involves the changing face of housing itself. For many years the single family home has been the gold standard of real estate, a status symbol and a private place in which to raise children and live out those golden years. While the single family home is still popular, in many parts of the country it has given way to other, more flexible, options.
Whether they are working longer or retiring at a younger age, seniors are increasingly expressing the desire to age in place. That could mean a higher demand for age-related alterations, including grab bars on the showers and ramps at several different entry points.
In other cases those older men and women may choose to move to more senior-friendly residences – not quite assisted living, not quite nursing home but places where help is available for various tasks of daily living. Some real estate developers are already building communities that offer these kinds of services, and as the population ages the popularity of those senior-friendly developments is likely to grow even greater.
Demographic changes can have a huge impact on the housing market. Just think about the growth of single family housing and the way planned communities sprung up during the dawn of the Baby Boomer generation. The shift toward multigenerational living has become profound as well, increasing as housing prices rise and young people are priced out of the market.
Now the aging of the population threatens to upend the real estate market all over again. With more and more seniors working longer, living healthier and building richer and more interesting lives, the places they choose to live is likely to change once again. Real estate agents are already getting ready, building different kinds of communities, adapting their current housing stock and making other changes that will improve the lives of their clients, and their bottom lines, for many years to come.