WITH BIDDING WARS heating up, construction booming, and mortgage rates still at historic lows, the housing market is finally on the rise — but a new problem might be on the horizon. And the baby boomers now pondering downsizing could be to blame.
When empty nesters decide en masse to try and unload those sprawling homes in Newton and Wellesley in the coming decade — and with them all the yardwork, maintenance, and heating bills — experts fear the glut of houses could burst this area’s fragile recovery. Boomer housing is “a very hot topic right now,” says Davenport Crocker Jr., regional vice president for Coldwell Banker Residential Brokerage in Massachusetts. “At the midyear meeting of the National Association of Realtors, there was discussion of that pending avalanche of homes.”
According to a 2012 report prepared by the nonprofit Bipartisan Policy Center, seniors nationwide will try to sell up to 11.3 million housing units this decade, and up to 15 million more between 2020 and 2030, which “may result in a long period of slack housing demand in the Northeast and Midwest, beginning just in time for the recovery of national housing markets in the mid-2010s.”
But the outlook isn’t quite that dire, says Barry Bluestone, director of the Dukakis Center for Urban and Regional Policy at Northeastern University. “Will this retiring baby boom generation decimate the market? I don’t think that will happen,” he says. However, “we’re not going to have another price spike,” he adds. In his Greater Boston Housing Report Card 2012, Bluestone predicted that home prices might not return to 2005’s peak until as late as 2031. (Ouch.) He says recent data suggest prices should rise sooner, “but not at extraordinarily high rates.”