Housing Crisis that We Have Never Seen

Okay, so there's something that we ultimately need to talk about if you are a baby boomer. So I found this article on Fortune and it is something that I feel like needs to be talked about. The boomer housing crisis is pacing to get even worse. We've never had a population pyramid that looks like this. So we are seeing throughout the housing industry that the baby boomers are the generation that is capitalizing on the housing market. Essentially, you have a house that you have been in for a very long time, your family home, I'll call it. It's probably paid off or nearly paid off. And now you need to downsize because you're an empty nester or there's a lot of stairs in your home and you're looking for one level. So you can sell your home for essentially top dollar and a millennial or even Gen Z will come in and buy it. And if it was during COVID, you could sell it with no inspections, you didn't have to do anything to it, and you were walking away with a pretty fat check to be able to purchase your next home. And while that is still the case with the interest rates where they are, we are seeing the market slow down a little bit. But most of the time, you are still able, especially if you're in a desirable area, you're still able to sell your family home for pretty much top dollar and not have to do too much to it. And then you walk away with this check and you're supposed to essentially use this check to be able to purchase your next home, which would be considered your forever home. It's usually a ranch style home that doesn't have stairs. Sometimes it's in a 55 plus community. And then this way, you don't have to worry about your maintenance of your lawn. You have all of these clubs that you can go to, you have a huge clubhouse, there's a pool, there's all of these like festivals and games and like garden clubs. And essentially you are living the good life, or so to say. But what's happening is now is that they are not building enough of these homes to keep up with the demand of the baby boomer generation. And the reason is, is because there are so many baby boomers and there's just not enough houses to go around. Another thing that this article actually doesn't touch on is the fact that I, I mean, I'm in this industry every single day. A lot of clients come to me and they tell me, I don't want to be in a 55 plus community, whether it be that they're not at that age yet, because I hear it a lot where, oh, well, I just turned 55. And I think the notion is they can't relate to the people that are living in a 55 plus community. Maybe they aren't retired yet. Maybe they're about to be retired. Maybe they're just thinking about retirement. And they would rather be in a neighborhood that is just a ranch style home, but in a neighborhood that is surrounded by families or maybe out in the rural country, which is totally fine. But the article is essentially bringing up the fact that they are building these new houses in 55 plus communities, not just building new houses. And they say that by 2020, I'm sorry, 2030, we are going to have a shortage of 560,000 homes in order to usher in the aging population. And what's happening is, is that a lot of baby boomers are deciding to age in place. The problem is, is that a lot of them, like I said, have stairs. You would need in-home care. You would need more nurses. You would need like either your kids to take care of you or a family member to take care of you. Especially as you get to the part of life where you can't take care of yourself. And this, I'm not even going to mention, I'm not even going to mention the assisted living homes because they are so ungodly expensive that people, that's not even on people's radar anymore. There are so many stories that come out of like the treatment and like the, just the overall, like the cost. Like I've heard people say that they've spent $10,000 a month to have mom or dad in an assisted living place, which that is insane. That is absolutely insane. It is saying that we've never seen this. And no, we haven't seen this because the baby boomer generation is the largest generation to ever exist. Now I do, this has always been my theory is that baby boomers had millennials. So our generation, my generation is essentially, I'm not going to say just as big because it's not. Like my dad was one of four and I'm one of two, right? So like you can definitely see that people are having less kids. And what I'm trying to say is, is that millennials, while no, we are not the baby boomer generation, there are still a lot of us. There are still a lot of us. So if baby boomers are actually going to age in place, those homes will never hit the market, which means that either we're going to have to figure something out or we're going to have to make these senior homes more affordable. Because that is another thing that's happening is that we are seeing the price of these 55 plus communities, the prices of these homes, new construction homes, keep going up just like everything else that just keeps going up. And the HOA fees are sometimes expensive, especially if you have a fixed income. Even if you were to purchase your house cash, you still have this HOA fee. So I mean, like it's usually, I mean, I've seen 155 monthly. I've seen $525 quarterly. I've seen $247 monthly. I mean, it really depends where you are. And with Delaware being a retirement state, we see 55 plus communities literally everywhere, all over the state, whether you're going to be in Newcastle County, Kent County, Sussex County. I mean, they're literally everywhere. And it's a large part of my business. And I love working with retirees. I absolutely love it. To me, it feels like cozy and warm and fuzzy, and I love it. But I also feel for these people as well when they tell me, okay, well, here's my budget. And I tell them, unfortunately, I don't have anything in that budget. And it doesn't mean I don't have anything in that budget for the particular area. It means I don't have anything in that budget for the entire state. And I've had a lot of people tell me, unfortunately, I just don't think I can move to Delaware. Like, yes, we have low property taxes. And the cost of living is fairly similar, might be slightly higher, but definitely housing is higher. And it's because we've had such an influx of other states coming to Delaware because of our property taxes, that our housing costs have gone up. And basically, what this article is saying is that, and it's also what I was saying, basically, during COVID, is that the price of the home today is not going to be the same tomorrow, it won't be the same next year. So the cheapest home to buy is always today, whether it be instead of next year. And this is why I try and share when I see homes that are affordable. Meaning, I just shared a video a couple days ago, and it was like prices I haven't seen since 2019. And that was not a lie. I truly mean it. Because I also see that the prices of homes are going up, especially for the senior community. So when I see prices in the 300s, I mean it when I say I haven't seen them since 2019. So jump on this while you can, because you may not have this opportunity. Now, I realize not everyone is in that situation, and these are in 55 plus communities. So it's give or take, there are HOA fees associated with it. Are you in a position to sell your family home? Essentially, this article is saying in 2021, 11.2 million seniors, about one in three, were cost burdened spending more than 30% of their income on housing. Though government programs provide crucial housing assistance to millions of older adults, demand drastically outstrips supply with years-long wait lists in some areas. It says we have never had a population pyramid that looks like this. The senior housing industry would need to develop twice as many units as it has ever developed in any single calendar year every year to keep up. What's more is that the early pandemic pulled the brakes on the housing industry, which we saw. When the COVID, when everything got shut down, I mean, builders stopped building. They really did. No one knew what was going to happen. We didn't know that we were going to go on this epic, epic housing boom. I mean, no one knew that the interest rates were going to drop where they did. No one knew that essentially there was going to be this K-shaped recovery, and people were going to be fully remote, and they were going to move wherever, and then they could still keep their job. And I mean, it was unknown. So no, like, yeah, this is definitely right in the fact that the brakes were put on. And then it was very hard to get them to ramp back up because then wood was hard to come by, the lumber industry. You couldn't get garage doors, then you couldn't get windows, then you couldn't get siding, and you couldn't get shutters. I mean, it was just like one thing after another, honestly. It says years later, developers are still operating at a different pace. Real estate advisory company Green Street tells the Journal that high interest rates and the cost of building still keeps the industry from meeting said demand. Many seniors are unable to afford private retirement homes and others who are opting to age in their home. Yeah, because that's what we are seeing is that either seniors are starting to age in their home, and then we're selling, or they're somehow finagling if they can figure out where they can live for cheaper than purchasing new construction, or trying to compete with a millennial buyer or a Gen Z buyer, which most of the time, especially if you have cash, you will beat them out. But they're competing for these ranch style homes that maybe aren't in a senior community. It says that the new projects are often luxury ones that cater to the riches of boomers. Developers say to the outlet, that all leaves a large portion of boomers pushed out of affordable housing. America is an increasingly aged nation. It's not just putting a roof over seniors' heads, that is the uphill battle. There's also a strain when it comes to finding care. Nursing homes are dealing with staffing shortages, finding it difficult to retain talent when it comes to often grueling and underpaid job. Meanwhile, the number of adults who will likely need help with basic care, aged 85 and older, is set to quadruple between 2000 and 2040. Insurance, including Medicare, will also need to step up to meet the influx of needs. This is the part, like if you age in place and you're not in, even if you're in a senior community, it doesn't even matter. If you need at home care, we're seeing that the demand is way insane. Especially with COVID, there are just not enough nurses and staffing to do at home care. It says there's a tsunami of people coming into Medicare. That's going to put pressure on the entire healthcare system. The question is, what can we do to make housing more affordable for seniors? Ultimately, I think that is ultimately what we need to do. We need to make housing more affordable for seniors so that they sell their family homes, so that there was a more influx of housing for millennials and Gen Z. Basically, millennials and Gen Z are going to have to want to purchase a home that maybe isn't move-in ready. Maybe it does need a little bit of updating. I can tell you this from experience. I purchased my grandmother's home and yes, it needed updating. It was literally like walking into 1978 and yes, we have gutted the entire house and yeah, taking a lot of money. But at the same time, I got this house for way cheaper than if I would have purchased one that was move-in ready. It's just about a mindset. It's a mindset of helping seniors get into affordable housing and then changing the mindset for millennials and Gen Z that maybe you don't need move-in ready. Maybe the gift is actually getting a house for the affordable price that you can afford and fixing it up over time. But I really hope this video helps shed some light on what's going on in the housing industry for baby boomers. If you like this video, be sure to give me a thumbs up. Be sure to subscribe to the channel. If you think this video will help someone else that you know, please share it with them and I would also love the chance to help them as well. Once again, be sure to give me a thumbs up. Be sure to subscribe to the channel and I will see you on the next one. Hey, if you are thinking about retiring to Delaware, you should definitely check out this video right here. And if you would love to tour Delaware new construction homes with me, check out this playlist right here. And don't forget, subscribe to my channel.