How to work with baby boomers, the X-factor in today’s housing market

This is the fourth installment in Inman’s series on the ways people from different generations approach the homebuying experience. Click here for part one on millennials, here for part two on Gen Z and here for part three on Gen X. Also, check back in the coming days for additional stories as part of Agent Appreciation Month. And take advantage of our Agent Appreciation Sale, and subscribe to Inman Select for only $85. 

Danny Maisano enjoyed owning a condo in a mixed-use community on the waterfront of Naples, Florida. He didn’t mind the noise from bands playing downstairs or lugging groceries from the parking lot up.

But in 2020, Maisano, who is now 70, and his wife, now 63, began looking for something else.

“It wasn’t really what my wife was looking for,” Maisano recently told Inman of his condo. “The issue we found was it was hard to make friends, and there’s not really a sense of community in that environment. We were in Bay Front for seven years and we never met our neighbors.”

Eventually, the couple found a property they liked in what Maisano described as “your typical Florida gated community.” The community has pickle ball courts and walking paths. The home itself spans about 2,800 square feet, and includes a “casita” in the backyard that’s perfect for accommodating family. It has a garage, rather than a parking lot, which Maisano said was a major selling point because it’s nice “just to have a place to keep your stuff.”

And so the couple liquidated other real estate assets, including their waterfront condo, and moved in about a year ago. Maisano said he still prefers the condo life, but overall spoke positively about the new setup.

“This is a lot more conducive to what my wife wants,” he said, adding that they’ve already met numerous neighbors, and that many of those neighbors have ties to New England, where Maisano and his wife still spend a significant amount of their time.

TAKE INMAN’S QUIZ TO SEE IF YOU SPEAK THE LANGUAGE OF YOUR BABY BOOMER CLIENTS

Maisano is right in the middle of the baby boom generation, and his recent experience in the market is sort of the platonic ideal of a baby boomer real estate deal. He bought in a warm state, in a gated community, and in a place dense with other members of his generation. He was looking for space to accommodate family, but not so much at what the nearby schools look like. Community mattered more than almost anything else.

Over the last several days, Inman has explored how Generation Z, millennials, and Generation X all approach the homebuying experience. In many cases, those younger cohorts have had a tough time as they contend with fast-rising prices and intense competition. And in many ways, those three younger generations also all resemble each other in terms of their relationships to work and family, their home preferences and their financial decisions.

But baby boomers, who are now retiring, in some cases well-off, and increasingly free from the rigors of childrearing, stand apart. They’re outliers. They’re a singular generation and the X factor that will determine how the housing industry unfolds. While they may be heading into hold age now but their influence isn’t likely to wane any time soon.

Table of Contents

Who are the baby boomers?

The Baby Boomers were the children born in the post World War II era, as returning GIs rode a wave of economic prosperity and rapidly expanded their families. As a result, demographers generally consider the starting point of the generation to be 1946 and the ending point to be 1964.

The older Baby Boomers were pioneers of the counter culture movement in the late 1960s and early 1970s. They helped make the Beatles and the Rolling Stones household names. The baby boomers attended Woodstock, fought in and protested against the Vietnam War, and watched as a human walked on the surface of the moon for the first time.

By the 1980s, the baby boomers helped elect Ronald Reagan in a landslide. Then they awarded the 1990s to Bill Clinton. They’re the parents of the millennials, the other huge demographic that has now eclipsed them both in terms of sheer size and influence over the housing market.

Today, the oldest baby boomers are in their mid 70s, while the youngest are in their late 50s. Many younger members of the cohort are still working, but as a whole the group is heading toward, or already in, retirement. Daryl Fairweather, chief economist for Redfin, also noted that the trend of baby boomers retiring has accelerated during the coronavirus pandemic.

“A lot have exited the labor force,” Fairweather told Inman. “And a lot of them have been able to do that because their home value has gone up so much.”

According to a 2021 report from the National Association of Realtors (NAR), which was based on thousands of survey responses, the younger half of the cohort now makes up 18 percent of all homebuyers. The older half of the baby boom generation makes up 14 percent, for a combined, 32 percent of homebuyers.

Boomers also make up a total of 43 percent of homesellers, according to the report. Younger baby boomers have a median age of 61, while older boomers have a median age of 69. Just under two thirds of baby boomers are members of a married couple, and more than 90 percent of baby boomers no longer have kids at home.

Key baby boomer traits:

• Baby boomers were participants in some of the most significant events of the twentieth century.
• Today, they’re mostly married, mostly empty nesters and mostly headed toward or already in retirement.
• Even as they near old age, baby boomers still account for a huge share of the homebuying and selling market.

Where are the baby boomers going?

The biggest thing to know about baby boomer migration right now is that, because they’re retiring and no longer have kids at home, they’re less tied to things like local job markets and school districts. And according to realtor.com Senior Economist George Ratiu, that means boomers are free to look for housing in further flung locations.

“They have the highest share looking to move to another state,” Ratiu told Inman.

Data that realtor.com shared with Inman specifically shows that 30 percent of baby boomers looking to move are planning to leave their state. That compares to just 13 percent of Gen Xers and 12 percent of millennials — both of which are in the middle of their professional and family-raising years.

The data further shows that 5 percent of baby boomers are looking to leave the U.S. entirely. That too is a higher percentage than previous generations, with only 1 percent of Gen X and 2 percent of millennials looking to become expats.

A plurality of baby boomers, or 41 percent, are still looking to move within their own cities. But that plurality is smaller for baby boomers than it is for Gen X or millennials.

Agents in pricier parts of the country are seeing this first hand. Among them, Kyle Whissel, CEO of the San Diego-based Whissel Realty Group at eXp Realty, recently told Inman that “our baby boomer clients are almost all leaving the state.”

“They’re tending to go to wherever their kids and grand kids are,” he said, adding that Arizona tends to be a popular destination for Californians on the move.

“Very, very rarely do they boomerang and come back,” Whissel added.

Fairweather confirmed that many baby boomers are moving from pricey coastal areas to more affordable places. She said Arizona is indeed a popular destination, as are other Sunbelt states such as Florida and Nevada.

“It seems like baby boomers like warmer winters,” she said.

Beyond mobility, NAR’s report shows that a plurality of baby boomers are buying homes in the suburbs. However, that plurality is smaller for the cohort than it is for Gen Xers, millennials or Generation Z. In other words, suburbs are still attractive to baby boomers, but more and more of them are opting for both small towns and resort communities.

The picture that emerges is that the baby boomers may be the most distinctive age cohort in the U.S.

Baby boomer migration:

• Baby boomers are more mobile than younger generations, with many looking to leave their current state.
• Baby boomers still favor suburbs, but to a lesser degree than other generations.
• In addition to suburbs, members of the baby boomer generation also favor small towns and resort areas.

What are the baby boomers looking for in a house?

In the same way that retirement has freed baby boomers from the constraints of specific locations, it has also changed their preferred amenities. Jackie Soto, owner of brokerage EHomes in California’s Inland Empire region, said that in her area, many baby boomers are looking to downsize after their kids have moved out. And that can mean smaller properties, sometimes in areas that are physically designed to foster community.

“They want to be near their family or they’re looking for community,” Soto said.

This point came up repeatedly.

For example Tiffany McQuaid, president of Florida brokerage McQuaid and Company, told Inman that her area gets a significant amount of attention from retirees. As is the case in Soto’s region, many buyers McQuaid sees are looking to downsize, and to find a community they can be a part of. In some cases, groups of baby boomer friends have even opted to buy property together, either in the same community or literally in a joint ownership arrangement.

“They’re moving in packs, meaning packs of friends,” McQuaid explained. “And the boomers to me are the epitome of location, location, location.”

Brandi Snowden, a senior analyst with the National Association of Realtors (NAR), also said community is a primary amenity for baby boomers, telling Inman that “more than any other generation they’re purchasing to be closer to friends and family.”

The idea of community as a home amenity can mean different things to different people, but it serves as a unifying philosophical theme for baby boomer home searches. And one of the ways it can manifest is in a preference for communities that are specifically oriented toward seniors.

Snowden, for instance, said 12 percent of buyers over the age of 50 are purchasing homes in senior oriented communities. Broken down by age, 9 percent of buyers between the ages of 56 and 65 bought in senior communities, while 18 percent of buyers between 66 and 74 did the same. The most popular housing type in senior communities was a single family detached home in a suburban location.

Maisano epitomizes this trend; though his new home isn’t in an age-restricted development, he said it’s still about 80 percent retirees. And he and his wife chose it because it offered a better community. 

The report from NAR further shows that homes purchased by baby boomers had a median size of 1,900 square feet, which is smaller than the median for either Gen Xers or millennials. Boomers also had a median expected tenure in their homes of 20 years. By contrast, Gen Xers and older millennials only expected to be in their homes for 15 years on average.

Other factors playing into baby boomers’ home choices tend to be related to their age. McQuaid said that older buyers in her area aren’t especially interested in having big yards or swimming pools, both of which require maintenance, though many do like having a hot tub.

On the other hand, McQuaid said baby boomers in her area do want to be in close proximity to medical and emergency services. McQuaid described this preference as “anticipatory,” meaning baby boomer homebuyers are thinking about a time in the future when they need regular access to doctors.

“There’s a question that’s coming up a lot, ‘where’s the nearest fire station? Where’s the nearest hospital?” McQuaid said.

Baby boomer home preferences:

• Baby boomers are looking for properties where they can enjoy a sense of community.
• Some baby boomers are moving into senior-oriented communities.
• Others are already anticipating future medical needs and opting for housing near hospitals.

How are baby boomers paying for their homes?

The most obvious implication of the baby boomers being at retirement age is that they’ve had decades to build careers and significant amounts of wealth. The result is that even though millennials now make up the largest homebuying cohort, baby boomers still have more wealth and flexibility when it comes to choosing a home.

Maisano’s experience illustrates this. When he decided to buy a new home, he used proceeds from the sale of an office building he owned in Connecticut. Then he used the proceeds to pay cash for the new house. Far fewer younger buyers have multiple properties they can sell to come up with large amounts of cash. By contrast, Maisano said that in his current Florida community most people buy property outright.

“If you don’t have the cash people don’t want to deal with it,” Maisano said. “Everybody who I know that moved to Florida from Connecticut paid cash.”

There are other ways baby boomer wealth plays into homebuying as well. For example, Maisano pointed out that most people in his community are on second marriages, either thanks to divorce or the death of a prior spouse.

“Everybody is on their second marriage down here,” Maisano said. “The joke is you have two dogs, two wives and a convertible.”

Jokes aside, the reality of multiple marriages has implications for the housing market; Maisano pointed out that when two people marry later in life they potentially combine two well-established estates. The money may come from insurance payments, alimony, pensions, long-gestating business ventures or other sources. But the point is that people on their second marriage can potentially bring far more resources to bear on a real estate transaction.

“You combine those asset bases and that influences your ability to pay cash,” Maisano said.

Even baby boomers who aren’t on second marriages may have more resources than younger buyers, though, if they started climbing the real estate ladder decades ago. Whissel, for instance, pointed out that many baby boomers in his area are cashing out on their home equity, which has risen consistently for years and rapidly during the pandemic.

“They’re selling their house here and taking that equity and buying a house in cash in Arizona,” Whissel said.

NAR’s report bears this out, showing that smaller percentages of baby boomers are financing their homes than is the case for younger generations.

The report further shows that baby boomers tend to have larger down payments and are financing less of their homes than younger generations. At the same time, baby boomers most common source of a down payment is from the proceeds of a previous real estate deal, and only very rarely comes from a family member or friend — as is the case from young buyers.

What becomes clear from all this is that the baby boomers are in something of a unique financial situation thanks not only to their now-long careers, but also as a result of rising home values and in some cases advantageous second marriages.

Baby boomer finances:

• Baby boomers have had longer to work and accumulate wealth than younger generations.
• Many also benefit from soaring home values.
• Baby boomers use financing more rarely, and to a smaller degree, than other generations.

How baby boomers approach real estate and real estate agents?

One of the recurring things that came up in conversations for this story was the idea that older homebuyers often want a more hands-on experience from their real estate agents.

“Some older buyers need more hand holding,” Soto said, summing up a widespread perception about the cohort.

Michael Nourmand, president of Los Angeles-based brokerage Nourmand & Associates, made a similar point, telling Inman that “if I’m going to be working with a baby boomer, most likely we’re meeting in person before we transact.”

“I think with the baby boomers things are a little bit slower,” Nourmand continued. “They use more phones. There are more conversations.”

Nourmand compared that approach to younger buyers, such as millennials, who might instead prefer to communicate electronically and who tend to want to move at a faster pace.

That isn’t to say that baby boomers aren’t using technology. And in fact NAR’s report shows that 97 percent of younger baby boomers and 95 percent of older boomers use the internet for their home searches — only slightly less than is the case for younger generations. A plurality of baby boomers also ultimately found the home they purchased online, according to the report.

On the other hand, a higher share of baby boomers, or about a third, also found their homes through their real estate agents. For every younger generation, closer to a quarter of buyers found homes through agents. That means baby boomers may be leaning more intensely on their agents than younger consumers.

Anne Jones, co-owner of Windermere Abode in Tacoma, Washington, also said that among some baby boomers, there’s a sense that overall they want a relationship-based experience. They may be getting information online, but at least in Jones experience baby boomers are less likely to give that information the same level of trust as, say, a friend’s recommendation.

And in the end, some older homebuyers simply want the old school real estate experience.

There’s a cross section of people,” Jones concluded about older buyers, “who really dig the hard sell.”

Baby boomers and real estate:

• Baby boomers tend to want a more relationship-based, involved agent experience, according to some industry members.
• Baby boomers use technology almost as much as younger consumers, but may trust it less.
• There are still baby boomers who want an old school approach to housing.

Email Jim Dalrymple II