There’s been a lot of talk of a “silver tsunami” in real estate, referring to the prediction that baby boomers will downsize and put a massive number of homes back on the market. “From 2017 to 2027 and from 2027 to 2037 that number is set to rise to 920,000 and 1.17 million per year, respectively, an addition of about 440,000 homes annually by the second decade,” Zillow reported back in 2019.
Two real estate experts—Lindsey Harn, a residential real estate agent and owner of Lindsey Harn Group in San Luis Obispo, California, and Gerson Seise of Gerson Seise Realty in Laguna Beach, California—agree that you shouldn’t expect a tsunami.
“It will happen, but not in one dramatic surge,” Seise says. “It’ll unfold slowly over the next 10 or 20 years as baby boomers downsize, move closer to family, or transfer their homes to the next generation.”
Feverpitched/Getty Images
There are several reasons for the slower pace, and Harn explains that her senior clients tend to take longer weighing their options and are simply struggling to determine the best housing solution. Rather than wondering whether a housing tsunami will come into play, she suggests an even more pressing conundrum: Where will all of the baby boomers go? In San Luis Obispo County, she’s seeing more multi-story new builds and a limited selection of single-level, retirement-style housing.
“Finding a home suitable enough for retirees is going to be the biggest challenge,” Harn says. “Maybe they’ll leave the state, going to Arizona, Idaho, or wherever they’ll have more options.”
So what’s next for baby boomers looking to downsize, and millennials and Gen Z hoping to get into the market? Everyone needs to prepare as early as possible.
FreshSplash/Getty Images
“Seniors will have to take a proactive approach and really start researching and identifying their next phase,” Harn says. “For home buyers, it’s looking positive over the next one to five years, because I do think more properties will come on the market—bigger homes in nice neighborhoods that can accommodate younger families. Determine your housing goals and figure out what you would do if your dream home came on the market.”
Seise adds that there are three ways millennials and Gen Z can approach inventory and interest rate fluctuations: Keeping debt-to-income ratio healthy, maintaining a steady and reliable income, and monitoring and improving your credit.
“These three factors matter more than chasing the ‘perfect’ rate or timing the market,” he says. “When your financial foundation is strong, you can move confidently whenever the right home shows up—regardless of market noise.”