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The Silver Tsunami: What is it?
The silver tsunami is a term used to describe the aging baby boomers changing their living situations to better fit their needs. The trend shows they are downsizing to new homes, resulting in an increase in supply in specific housing markets. This increase in supply may affect the 2024 housing market.
According to Meredith Whitney there are two major demographic shifts happening in the US.
“First of all, the US economy is remapping itself regionally, and it has been since the great financial crisis,” she said. There is growth in different states such as Texas, Utah, Florida, Colorado, and South Carolina. There has been more housing demand in these states and less housing demands in states with less economic opportunity.
“Then the other major demographic trend you see is the aging of America,” she said. This is where the term silver tsunami comes in. By 2030, all baby boomers will be over the age of 65 and there will be more people over the age of 65 than under the age of 18. This will create a very different environment. “The AARP estimates that 51% of people over 50 downsized their home. And people over 50 are 74% of total US homeowners. So if you just take half of that, you've got about 30 million homes that should be coming on the market,” she said.
Over the next few years, Meredith believes there will be a supply-demand imbalance. She says, “But I think that what will happen is prices have to come down. Because if you have more people selling than buying, that invariably puts pressure on homes and increases home affordability. And I think you're going to see that.”
What Does This Mean For Younger Generations?
The silver tsunami will have impacts on the younger generations both positively and negatively so let’s split it into two categories: Economics and Opportunities.
Economics:
There may be changes in the job market. As baby boomers retire, it will open more job opportunities for the younger generations. On the other hand, it can also increase competition between certain jobs.
If baby boomers are downsizing, there may be increased competition for housing which could affect the younger generations and their ability to afford homes.
Opportunities:
By addressing needs of the older population such as healthcare, technology, and eldercare can increase business opportunities for the younger generations.
Overall, the silver tsunami provides both challenges and opportunities for the younger generations. Continued open discussions are crucial to navigate this new demographic shift. By recognizing the positives, all generations can work together to build a more equitable and sustainable future.