LK Marketing and Real Estate

Have you come across the term “Silver Tsunami” and found yourself wondering what it signifies? Lately, it’s been a hot topic of discussion online, but what does it really mean, and will it truly shake up the housing market as some speculate? Let’s delve into the concept and why it might not have the drastic effect some fear.

Deciphering the Silver Tsunami

In a recent piece by HousingWire, the Silver Tsunami is described as:

“. . . a colloquialism referring to aging Americans changing their housing arrangements to accommodate aging . . .”

The premise is simple: as the baby boomer generation ages, a considerable portion is expected to downsize their homes. Given the sheer size of this demographic cohort, if a significant number were to downsize simultaneously, it could flood the housing market with larger homes for sale, potentially disrupting the delicate balance of supply and demand.

While the theory holds merit, the question remains: will it come to fruition, and if so, when?

Why the Impact Might Not Be as Massive in 2024

Experts suggest that, thus far, the Silver Tsunami hasn’t materialized – and it’s unlikely to do so in the near future. According to the aforementioned HousingWire article:

“. . . the silver tsunami’s transformative potential for the U.S. housing market has not yet materialized in any meaningful way, and few expect it to anytime soon.”

One significant factor contributing to this is that many baby boomers simply don’t want to move. Data from the AARP indicates that over half of adults aged 65 and above surveyed plan to remain in their current homes as they age, rather than opting to relocate.

It’s evident that not every baby boomer intends to sell or move, and even among those who do, the process will unfold gradually over time. As Mark Fleming, Chief Economist at First American, aptly puts it:

“Demographics are never a tsunami. The baby boomer generation is almost two decades of births. That means they’re going to take about two decades to work their way through.”

The Bottom Line

If concerns about a Silver Tsunami disrupting the housing market have been on your mind, rest assured that the impact, if any, will be gradual and spread out over many years. As Fleming succinctly summarizes:

“Demographic trends, they don’t tsunami. They trickle.”

In essence, while the Silver Tsunami remains a topic of interest and speculation, its true impact on the housing market may be more subdued than initially anticipated. Time will tell how this demographic shift unfolds, but for now, it’s more of a gentle current than a crashing wave.

*Info provided by Keeping Current Matters