Home prices are flat to decreasing in most areas of the country, and rates are starting to fall, improving affordability for potential home buyers who have been waiting on the sidelines.
However, potential buyers face skyrocketing homeownership costs, including rising property taxes and insurance costs, not to mention higher property maintenance costs. These higher ownership costs are a hinderance for some first-time homebuyers.
What’s more, there continues to be a serious lack of supply in many markets – particularly the Northeast. Not only does new home construction need to increase to meet demand, the supply of existing homes needs to increase further before it becomes a buyers market.
One factor that might help boost the supply of existing homes in the years to come is the Great Baby Boomer Wealth Transfer, which is expected to have a significant impact on the housing market overt the next 20 to 30 years. Boomer homeowners downsizing and moving into assisted living could be the ticket to boosting inventory and fueling home sales.
In a wide-ranging interview with MortgageOrb, Emmanuel St. Germain, CEO for Florida-based Choice Mortgage, discusses this and other factors that will reshape the housing market moving forward.
Q: What do you think will happen to real estate when the wealth transfer from Baby Boomers starts?
St. Germain: This is a great question, and one with many factors to consider. To start, let’s look at the scale: An estimated $70 trillion in wealth is expected to transfer over the next 20–30 years, with a significant portion tied to real estate.
One likely effect is an increase in housing supply as Baby Boomers pass away or downsize—particularly in suburban and retirement-heavy markets like Florida and Arizona. Downsizing could also create stronger demand, and therefore a premium, for condos and townhomes, which require
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