Prospects for the Post-Pandemic Real Estate Market
Prior to the COVID-19 epidemic, nearly 34% of U.S. homes were owned by residents aged 60 and older.1 As the “Silver Tsunami” winds down, existing homes may begin to flood the market — driving prices lower in residential real estate.
Interestingly, many young homebuyers have adopted a retro perspective when it comes to searching for the perfect home. The construction industry will likely be busy building new homes and updating existing properties based on recent trends.
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According to a 2019 study, only 23% of American workers are very confident that they have enough money for a comfortable retirement.2 As a result, more of us will work longer, with two out of three pre-retirees saying that work will be one sources of their retirement income.3 Furthermore, they tend to prefer smaller homes in dense, walk-able, urban-oriented neighborhoods, and favor efficient and eco-friendly houses that require less maintenance.2
Mid- and late-career demographics — many who have weathered serious economic setbacks in the past dozen years — are expected to be a bit more pragmatic when it comes to retirement living. They may seek to downsize to a smaller home so they can age in place with lower bills and maintenance obligations.
Projects That May Pay Off
If you’re contemplating improvements for your house, seek the most bang for your buck. According to the 2020 Cost vs. Value Report by Remodeling magazine, exterior projects offer some of the biggest investment returns. For example, consider the curb appeal of replacing your home’s siding with fiber cement board or manufactured stone veneer. Think about replacing the roof, older windows and even the front door.3 In recent months, homeowners have come to appreciate the value of a breezy front porch — and a separate home office would be appreciated.
These updates make a lot sense if you want to list your house for sale, as new home-buyers prefer to customize the interior for their needs. Remodeling is fun when you get to design the kitchen, choose appliances and select colors for the bathroom. But spend money to install a new roof? Not so much.
It may cost more to replace siding, but it’s an investment you can recoup in the sale price — unlike a kitchen island. Curb appeal is important because it invites more prospects to tour your home and, once inside, they can envision how to personalize the home’s interior. That’s something you can’t possibly deliver to each prospect who walks through your door.
1 Issi Romem. Zillow. Nov. 22, 2019. “The Silver Tsunami: Which Areas will be Flooded with Homes once Boomers Start Leaving Them?” https://www.zillow.com/research/silver-tsunami-inventory-boomers-24933/. Accessed April 3, 2020.
2 Skylar Olsen. Zillow. Dec. 9, 2019. “Bold Predictions for 2020: Shrinking Homes and a More Stable Market.” https://www.zillow.com/research/2020- predictions-26100/. Accessed Feb. 6, 2020.
3 Brenda Richardson. Forbes. Jan. 14, 2020. “10 Home Improvement Projects That Return The Most At Resale.” https://www.forbes.com/sites/brendarichardson/2020/01/14/10-home-improvement-projects-that-return-the-most-at-resale/#62eeaefe6201. Accessed April 3, 2020.
