The term “Silver Tsunami” has indeed gained traction, alluding to a potential wave of baby boomers downsizing or relocating simultaneously. The concern is that this surge in housing supply could disrupt the market’s balance, impacting prices and creating fierce competition for smaller homes.
Not All Baby Boomers Plan To Move
However, there are misconceptions underlying this fear. Firstly, not all baby boomers intend to move. Research from the AARP indicates that over half of adults aged 65 and older express a desire to age in place, preferring to remain in their current homes. Even among those who may eventually contemplate a move, many plan to adapt their homes to accommodate changing needs rather than selling outright. (see graph below):
As an article from Inman explains:
“Many boomers have no desire to retire fully and take up less space . . . Many will modify their current home, and the wealthiest will opt to have multiple homes.”
Even Those Who Do Move Won’t Do It All at Once
While not all baby boomers are looking to sell their homes and move – the ones who do won’t all do it at the same time. Instead, it’ll happen slowly over many years. As Freddie Mac says:
“We forecast the ‘tsunami’ will be more like a tide, bringing a gradual exit of 9.2 million Boomers by 2035 . . .”
As Mark Fleming, Chief Economist at First American, says:
“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”
Bottom Line
In essence, if concerns about a Silver Tsunami unsettling the housing market overnight weigh on your mind, rest assured. The movement of baby boomers will unfold slowly and steadily over an extended timeframe, allowing the market to adjust gradually.