Advertisement
  1. News
  2. /
  3. Real Estate

When Baby Boomers die, their homes hit the market. Nowhere more than Tampa Bay

The enormous generation born between 1946 and 1964 owns about 40 percent of the homes across the country.
A huge number of homes owned by Baby Boomers will sell in the next 20 years. How will the trend affect the Florida housing market? [CAMERON GILLIE  |  NAPLES DAILY NEWS]
A huge number of homes owned by Baby Boomers will sell in the next 20 years. How will the trend affect the Florida housing market? [CAMERON GILLIE | NAPLES DAILY NEWS]
Published Dec. 7, 2019
Updated Dec. 9, 2019

Baby Boomers keep getting older, and that has consequences for the economy. The huge number heading toward — or already in — retirement has already left a lasting impact on the job market. Now come questions about what will happen as they sell their homes, due to downsizing or death.

This won’t be a blip. Boomers own 32 million homes across the country, about 40 percent of the total. And a new Zillow study estimates close to 20 million homes owned by older Americans will hit the market in the next two decades.

Ground zero for the trend: Tampa Bay.

By 2037, one out of every three homes in our metro area will have sold because an owner aged 60 or older died, downsized or left some other way, Zillow found. That placed us tops among 59 large cities in the study. Tucson, Ariz., ranked second. Miami and Orlando filled out the top four. Jacksonville placed 23rd.

Parts of the country with stagnant populations could struggle to fill the flood of inventory. Cleveland, Buffalo and Dayton, Ohio, are cities that have a large share of older residents who will leave their homes in the coming years, but fewer younger people to replace them.

In contrast, the Tampa Bay area keeps attracting more residents, a trend predicted to last for at least the next two decades.

“Tampa Bay is an example of a metro area that could take advantage of this inventory coming on the market,” said Karl Kuykendall, principal economist at IHS Markit. “It is a large, economically diverse area with population growth well above the U.S. average.”

For several years, our area has wrestled with a tight inventory of homes for sale. That has helped drive up prices and prevented some renters from becoming homeowners.

As for new homes, builders have been constrained by higher land prices, a lack of workers in some construction jobs and less access to capital than before the Great Recession. In 2005, for instance, builders broke ground on more than 21,000 new homes in the Tampa Bay area. Last year, the number was closer to 12,000.

A growing inventory of Baby Boomer homes should help loosen up the market. Not to get too morbid, but when owners die and their homes sell, it increases the housing supply. That creates more options for buyers, which can also hold down prices. Home prices in the Tampa Bay area have increased far faster than average salaries in the past decade.

“A curb on prices is good news for affordability,” Kuykendall said.

The additional inventory should also help feed the growing demand to live closer to city centers. Baby Boomers, who have owned their homes for longer than younger generations, tend to live closer to downtown areas. They weren’t as likely to get pushed into faraway suburbs due to high prices or lack of inventory.

New home construction often focuses on the periphery of big cities, where land is less expensive. The Baby Boomer trend should provide builders with opportunities closer to city centers, including freeing up lots in some areas to build duplexes, triplexes and small apartments.

“What seems most likely amid all the uncertainty is that, in the coming two decades, the construction industry will need to place a greater emphasis than before on updating existing properties, in addition to building new ones," the Zillow report stated.

Two things to keep in mind: This trend has already begun, and it’s going to play out over a couple of decades. The housing market won’t be deluged overnight. Baby Boomers are between 55 and 75 years old and many of them will choose to “age in place” — remain in their homes for years. Think of the trend as a steady flow that will quicken as more Boomers move deeper into their 70s and 80s.

Zillow’s numbers tell the story. From 2007 to 2017, owners aged 60 or older released roughly 730,000 U.S. homes into the market each year. From 2017 to 2027, the number will increase to 920,000. From 2027 to 2037, it will reach 1.17 million a year.

Any place that caters to retirees, including stand-alone developments or pockets within metro areas, could end up with a surplus of homes unless it attracts younger residents. The Villages, the sprawling retirement community in central Florida, has grown rapidly in the past 20 years. Once the bulk of Baby Boomers reach their 70s, the pace will likely slow, Kuykendall said.

“Places that depend largely or entirely on retirees will find it harder. They might stop growing or not grow as fast," he said. “But for metro areas that have enough demand, it’s a manageable trend.”

A wave of homes for sale

The percentage of all the homes in a market that people 60 years and older will sell in the next two decades.

City* By 2027 By 2037

1. Tampa Bay 15.2% 33.2%

2. Tucson, Ariz. 14.8% 32.6%

3. Miami 15.2% 31.9%

4. Orlando 14.4% 31.9%

5. Dayton, Ohio 14.3% 31.3%

6. Knoxville, Tenn 13.5% 30.8%

7. Pittsburgh, Penn. 13.6% 30.2%

8. Cleveland, Ohio 13.2% 29.9%

9. Albuquerque, N.M. 12.7% 29.6%

10. Greensboro, N.C. 13.3% 29.5%

* Metro or combined statistical areas. In this case, the Tampa Bay area refers to Pinellas, Pasco, Hillsborough and Hernando counties.

Sources: American Community Survey; Zillow analysis

ALSO IN THIS SECTION

  1. AdventHealth's central Pasco emergency room at t 16625 State Road 54 is shown here. The hospital chain recently purchased 18 acres on State Road 52 at the northern entrance of the Mirada development west of Dade City. [MICHELE MILLER  |  Times]
    The hospital chain pays $4.5 million to buy 18 acres from a Metro Development Group affiliate.
  2. Crystal Sierra, left, and Sarah Sprague, who share a home, are pictured at Holiday Lights at the Florida Botanical Gardens in Largo. [Courtesy of Crystal Sierra]
    And it’s not all about finances.
  3. Renderings by Arquitectonica of the proposed Red Apple Group condo project in St. Petersburg. Courtesy of Arquitectonica [Courtesy of Arquitectonica]
    $300 million. 45 stories. A little closer to existence.
  4. A group of East Lake residents has erected signs protesting a 44-home development proposed by Tarpon Springs developer Pioneer Homes. Tarpon Springs commissioners recently voted to annex the site into the city. [Courtesy of Marc Washburn]
    The action targets a plan to build 44 homes on land between Keystone Road and Highland Avenue, double what was allowed in the East Lake District.
  5. A for sale sign is seen in front of a home in the Westchase area of Tampa. CHRIS URSO  |  Times (2013)
    And a spike in cash sales suggests investors were active in the market.
  6. A proposed bill in the Legislature would set a statewide referendum on whether to amend Florida's constitution to add a year to the period when home buyers can transfer their accumulated benefits under the Save Our Homes cap on property assessments to a new home. Pinellas County Property Appraiser Mike Twitty says going from two years to three would reduce the possibility that construction delays in a booming real estate market would prevent some buyers from meeting the deadline, costing them potentially thousands 
 of dollars in property tax savings. [SUSAN TAYLOR MARTIN | Times (2019)]
    The bill, the idea of Pinellas County Property Appraiser Mike Twitty, would give buyers another year to transfer their tax savings under Florida’s Save Our Homes assessment cap to a home they’ve...
  7. More than 44 percent of people who searched on ApartmentList.com for the Tampa Bay area from June to December were outside the region, according to a report from Apartment List. Percentages in the “Top Three Sources” box represent the share of searches coming from outside the metro area. (Apartment List map) [Apartment List]
    The region trails only Denver, Baltimore and San Diego for the percentage of people from outside the area searching for apartments on Apartment List.
  8. This home in Colonial Hills neighborhood in west Pasco has been vacant for 10 years, neighbors said. A new Pasco County ordinance would require the owners of vacant and rental residences to register their properties with the Pasco County Sheriff's Office. [C.T. BOWEN  |  Tampa Bay Times]
    A new ordinance is supposed to aid sheriff’s deputies and code-enforcement officers dealing with rental or vacant properties.
  9. A beer is pictured in the outdoor games area of Park & Rec on Wednesday, May 22, 2019 in St. Petersburg. [LUIS SANTANA  |  Tampa Bay Times]
    The Towers of Channelside condo association has filed a lawsuit against the bar, as residents complain about noise.
  10. Flooding from an October king tide in Miami Shores fills streets, sidewalks and driveways at its peak. [Miami Herald]
    And it could lose up to 35 percent of its value by 2050, according to a new report.
Advertisement
Advertisement
Advertisement