Older homeowners resist downsizing

Seniors are waiting longer to downsize, preferring to age in their own home instead. (TNS)
Seniors are waiting longer to downsize, preferring to age in their own home instead. (TNS)

A new report from Trulia says households headed by seniors are delaying downsizing.

That’s in part because seniors are working longer, so they don’t feel as pressed to dramatically reduce expenses, and because more seniors are housing their adult children compared with a decade ago.

Downsizing rates for seniors had held fairly steady between 2005 and 2016, said Alexandra Lee, housing data analyst for Trulia.

In 2016, 5.5 percent of all households headed by owners 65 and over moved, with the downsizers pretty evenly split between those moving to single-family homes (2.7 percent) and multifamily homes (2.4 percent). The balance would be mobile homes, trailers, boat, van and other homes, Lee said. In 2005, the moving percentage was virtually the same.

The big change is in timing.

“Seniors are starting to downsize later in life,” she said. “In 2005, more senior households were moving into multifamily than single-family housing by age 75. In 2016, this inflection point had shifted to age 80.”

Jennifer Pickett, associate executive director of the National Association of Senior Move Managers in Chicago, said the average age of seniors she works with and who are moving into assisted living facilities is about 86.

“We’re not seeing 70-year-olds doing this,” she said. “We’re seeing people in their 80s doing this.”

The downsizing delay also coincides with the recession and the recovery.

Kiplinger quoted home price data from Clear Capital, a provider of real estate data and analysis, on 100 of the largest metro areas.

It listed the 2017 median home price for the Dallas metro area at $182,000, up nearly 11 percent from 2016, and up 53 percent from May 31, 2006, the date it tags as the housing market peak nationally. Prices here gained nearly 84 percent since March 31, 2012, when the housing market hit bottom, according to the study.

Housing market figures vary by study. A June report from Zillow said home prices in Dallas-Fort Worth hit their pre-recession peak in June 2007, when the median home sold for $158,000. The median home value for the metro area in June was $229,400, an 11.6 percent increase over June 2017, Zillow said.

“The ability of senior households to downsize depends on the availability of homes to downsize into,” the Trulia report said. “The acute shortage in starter home inventory can make it difficult for retirees to move to smaller homes.”

That means baby boomers looking to downsize might be feeling the same pinch as Generation X-ers and millennials looking for starter homes.

And some of those seniors still have mortgages to pay off, which is also delaying retirement. The report noted that the proportion of household heads 65 and older who are still in the labor force rose to 19.3 percent in 2016 from 15.9 percent in 2005.

And adult children are moving out later. Of senior households nationally, 83.4 percent lived by themselves, with no younger generations, in 2016, down from 85.2 percent in 2005.

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