As Aging Homeowners Stay Put, Remodeling Opportunities Rise
Aging at Home Puts Strain on Housing Market for Buyers, Silver Lining for Remodelers
According to a report from CNBC, at least part of the blame for the housing shortage goes to our older generation and its members that are choosing to age at home instead of move into more elderly-friendly homes and communities.
- 1.6 million fewer homes are on the market due to the elderly staying in their family homes
- Freddie Mac chief economist estimates an additional 2.5 million homes are needed to meet demand
- Low inventory and high demand increase housing prices, making rentals more attractive
- Remodelers that can make homes elderly-friendly have an excellent business opportunity
- Younger families may not have the option of moving, opening up more remodeling business
Staying Instead of Selling
There are plenty of reasons elderly people move later in life. The house they raised their families in are too large and require more maintenance than they can handle. Stairs, bathtubs, and hard-to-reach areas can be fall hazards.
Regardless of the reasons, our elderly typically move into a different home or community as they age. But that’s not the current trend. Great communities, freedom, and control are all reasons to stay. Aside from that, many elderly people own their homes outright with no debt on them.
Trade that for a retirement home? No thanks.
The prospect of moving with today’s housing prices, particularly in areas that are attractive for retirement, might not make sense financially.
Putting Pressure on Millenials
As Millenials enter the housing market later than expected, they’re finding homes for higher prices thanks to the laws of supply and demand. There’s always danger for first-time home buyers to get into more payment than they can afford, even with post-recession regulations in place and downpayment assistance.
With competition so tight, renting becomes a more attractive option. There are no guarantees for changes, of course, but at least you’re not looking at a $3,000 mortgage payment on a $5,000 monthly salary.
As always, the housing market will ebb and flow, and my recommendation is to rent, save up a solid downpayment, and pay down your debts. As you become more stable in your career, have more savings built up, and less debt, you become more attractive to lenders and qualify for better interest rates.
The Silver Lining for Contractors
Remodelers have a golden opportunity for the current trend by making changes to homes so they’re more friendly to aging homeowners. Remodeling bathrooms and kitchens can be a huge help along with widening entryways. For high net worth clients, you can even install an elevator in multiple story homes.
The idea is simply to look at the ways you can eliminate the reasons an elderly person would have to leave instead of going by choice.
Create relationships with service providers along the way. Recommending lawn maintenance Pros and house cleaners you trust adds a bit more value and helps your client visualize being able to stay in the home they love.
For your clients that are at the peak of their careers, start having some of these conversations early. While they’re in their top earning years, they’re in a better position to make some of those upgrades years before they need them and before it’s a bigger financial strain. Start brainstorming with them and see if they’re committed to staying in their home through the aging process.
What About Younger Homeowners?
The elderly aren’t the only ones staying put. All homeowners have to decide whether to stay or go as their house no longer meets their needs. With the elderly not putting their family-friendly homes on the market, younger people with growing families don’t have as many existing home opportunities.
One option is to build a new home. But for many, renovating their current space is a more affordable option and might be more attractive if they’re in a good neighborhood with good schools.
Regardless, it’s shaping up to be a solid season in the housing market for remodelers across the entire spectrum of homeowner ages.