There are approximately 76 million baby boomers (aged 56 – 76 years old) in the U.S. Furthermore, this demographic has owned the largest amount of real estate wealth in the country since 2001. Fortunately, baby boomers are living longer and are healthier than previous generations and it’s enabling them to stay longer in their homes. Ultimately, more baby boomers are adopting the aging in place strategy. With this said, it is not uncommon to see many baby boomers throughout South Florida still living in the same house that they raised their children in over 30 years ago. So is the growing popularity of aging in place contributing to the housing inventory challenges? The short answer is even though it could possibly alleviate the single-family home inventory constraints, the main root of the problem continues to be a lack of new units being built. In a nutshell, our housing has not kept up with our population growth.
Selling with nowhere to go
A common challenge being faced by all homeowners right now is being able to find a subsequent property to move into once a sale occurs. There is no doubt that it is currently a seller’s market with the latest data from the Broward, Palm Beaches and St. Lucie Realtors Association showing that sellers got 100% of their asking price. This figure is up about 3% from the prior year. In the year 2021 approximately 2% of baby boomers moved to another property. Of those that moved, 46% reported downsizing to a smaller home or condo. Although many would think that this would be a logical approach in the South Florida market, it is important to remember the low property tax burden that many of these baby boomers currently have in their homes of 30 or more years. Of course, this is a significant benefit of the Homestead Exemption. Given the fact that their property taxes would likely rise significantly in the event of a move, it is easy to understand why more baby boomers are opting to simply age in place.
A healthy real estate market typically has about 6 months of housing supply available at any given time. Throughout the South Florida market, the current inventory is approximately about one month. Unfortunately, the South Florida market is now dealing with significant inventory constraints primarily due to decades of under building. Combine this with the overall population growth from 1985 through 2000 and it is easy to see why there are inventory challenges. Lastly, South Florida has significantly gained in popularity throughout the past few years as more Americans grew tiresome of the the restrictive lock downs and have opted to take advantage of remote working environments.
At Live South Florida Realty, Inc. we have assisted many clients with their real estate needs. Are you looking to buy or sell a property in South Florida? Now more than ever, it is critical to have a qualified real estate team and the proper search tools behind you. Live South Florida Realty, Inc., has been a leader in the South Florida market for many years. Let our team of professionals assist you with buying or selling your piece of paradise today! In addition, our recently launched “Florida Home Search” app is now available on the Apple App Store and Google Play Store. With real-time MLS feeds, this app lets you set your own alerts to notify you as soon as a property meeting your needs hits the market. Furthermore, it will also let you know of recent closed sales in your area so that you may be even more educated on the market. Be sure to download this app for your smartphone or tablet today!