Sunday, July 23, 2006

Where Will The Boomers Go?

From the Star Ledger:

Just don't call it a retirement home
BY KATHLEEN O'BRIEN

After decades in the insurance business, Gene Zielinski was used to crunching numbers.

As he faced turning 60, he did this calculation: If he and wife Becky moved to North Carolina, they could have 50 percent more house for 40 percent less money and 25 percent of the property taxes.

Zielinski is among the oldest Baby Boomers, those turning 60 this year. In New Jersey alone, 50,000 residents will hit that milestone each year for the next two decades. Will there be a giant sucking sound as they pull up stakes to flee the Garden State's high housing costs?
....
With housing consuming the biggest chunk of household income, a lot of money is riding on where they'll want to live next.

"Baby Boomers are the 800-pound gorilla in the housing market. They always have been," said James H. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

The housing needs of boomers have literally remade the landscape at every stage of their lives so far, he said. The Levittown-style housing tracts were built for their childhoods. When they were ready for their first apartments, New Jersey saw the garden apartment boom of the 1960s. When, as newlyweds, they wanted to buy real estate, the market responded with condominium construction.

Experts say they probably won't move lock step to one kind of retirement housing. Instead, those who do move may chose Southeastern states like Georgia and the Carolinas; age-targeted (but not age-restricted) developments tucked in nooks and crannies of existing Jersey suburbs; or the Hudson River waterfront, with its New York feel. (Think Jersey's boomer-in-chief, Hoboken resident Jon Corzine.)

7 Comments:

Anonymous Anonymous said...

Read the full article, it describes very well the choices my husband and I recently made. After 24 years in central NJ, we moved out of the country for 2-1/2 years, and are now returning "home", but home is one mile away from the NJ border in Pennsysvania. Pennsylvania is far more tax friendly than NJ, and we will be staying here after retirement. Both of us do not like the over-55 cookie cutter southern NJ developments. What we will have in PA is a golf community with many types of housing choices, families and retirees, in a beautiful green setting.

7/23/2006 10:09:00 AM  
Blogger RentinginNJ said...

My parents are in their upper 50's and starting to think seriously about retirement. They just got their new property tax bill for the year (went up of course) and are really concerned about how they are going to keep paying once on a fixed income. They always expected to retire here, but are starting to seriously consider their out of state options. I’m going to check out North Carolina in September with my wife and am going to invite them along.

7/23/2006 11:18:00 AM  
Anonymous Anonymous said...

So baby boomers are going to seriously consider 1 million dollar plus townhomes on the Hudson River waterfront?

7/23/2006 11:21:00 PM  
Anonymous Anonymous said...

No, no, no, you miss the point, anon 12:21... they are actually going to live ON the waterfront. Still some spare benches there.

7/24/2006 05:32:00 AM  
Anonymous Anonymous said...

Maybe they can move to hoboken
and take over many of the bust
out condo that are coming onto
the market.

7/24/2006 01:33:00 PM  
Anonymous Anonymous said...

Ok, this is one of my pet theories, so here are my thoughts on this and some "back of the envelope" calculations:

The article mentions 50,000 NJ residents hitting 60 each year over the next 10 years.

50,000/2 = approx. 25,000 households

25,000 households x 65% own a home = 16,250

16,250 x 33% retiring each year (this is a total guesstimate, but I believe it will be somewhere under 50%) = 5400 (rounded to make math easier

5400 x 65% selling home to move to smaller house, warmer climate, can't afford taxes, etc. = 3510

3510 x 10 = 35,100 homes over the next decade

Seems substantial, but not a tidal wave, even if you give +/- 20% on this, it's in the 28,000 to 42,000 range. Given that we have 30,000 in NNJ inventory now, it will have an negative impact on prices.

JM

7/24/2006 02:20:00 PM  
Anonymous Anonymous said...

One thing I didn't calculate is the additional people retiring each year on top of my initial number...so add several thousand homes to that number each year...

JM

7/24/2006 02:22:00 PM  

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