The Boomers are Getting Old

In the last few months, I've come to the realisation that my parents, like many other baby boomers, are getting older. My father's recent diagnosis of prostate cancer has only intensified this awareness, reminding me that our time together is precious and limited.

However, this post isn't about my parents - it's about the broader implications of an aging baby boomer generation specifically on the housing market.

Like many of my Millennial generation (born between the early 1980s and the mid-to-late 1990s) we are looking now to progress upwards in the housing market but are met by extortionate house prices and now risking mortgage costs too.

A Brief History

My parents, like many baby boomers, were born in the early 50s in the suburbs surrounding London. They met, married, and eventually settled into a lovely 4-bedroom detached house with a massive garden. As they've aged, so have their neighbours - the once lively street filled with young families is now much quieter. Mainly, its full of older couples.

The Impact of Baby Boomers

The baby boomer generation has significantly impacted the economy at every stage of their lives. From the cultural revolutions of the swinging sixties to the accumulation of wealth in the 80s, their sheer size has shaped the world around them.

But as they age, what comes next? And how should this affect the decisions made by generations looking to follow in their footsteps?

The Future of the Housing Market

As my old street and similar neighbourhoods become predominantly occupied by aging baby boomers, we must ask: what will these areas look like in 15-20 years? And what impact will this have on the housing market?

For my family, these questions are particularly relevant as we look to trade up in the market. We want to ensure that our investment doesn't leave us generationally disadvantaged.

Let’s be clear here! This isn't about inheritance - I fully expect my parents to live another 30 years and spend their well-earned wealth enjoying their retirement. It's about understanding the future of the housing market and making informed decisions.

Following the Logic

To get a sense of where the housing market may be headed, let's consider a few potential outcomes:

Downsizing Trend: As baby boomers age, they may opt to downsize, selling their larger homes and moving into smaller, more manageable spaces. This could lead to an increase in available family homes, potentially stabilizing prices and providing more options for younger generations.

Intergenerational Living: Another possibility is the growing trend of intergenerational living, where multiple generations of a family reside under one roof. This could slow the turnover of homes in neighbourhoods like my parents', keeping the housing market tight.

Market Shifts: As the baby boomer generation moves into retirement, there could be a shift in the types of properties that are in high demand, with a focus on single-level homes, retirement communities, and assisted living facilities. This may open up new investment opportunities for those willing to adapt.

As the baby boomer generation continues to age, the impact on the housing market will become more apparent. What worries me is the knock on impact to a housing market that simply has less demand at the top end.

Japan has seen steady reductions in population since 2010 mainly due to their aging population. Looking at the trends and the birth rates across the Western World many countries are heading in a similar direction. Japan in particular has seen significant and sustained falls in the price of houses over time. Are we heading there in the medium term?

While it's impossible to predict the future with certainty, being aware of potential trends and considering the implications of an aging population can help us make informed decisions about our own investments in the market.

To some extent, it doesn’t really matter what the price of houses are as long as you can afford the monthly mortgage payments. We should stop looking to our houses as investments and see them for what they are - places to live and raise a family.

Its just that nagging doubt in my head that some big price falls are around the corner and as the generational wheel of fortune turns maybe its the millennials that will get burned?

Maybe? What do you think?

And… to get the latest post each week please don’t forget to hit subscribe

I provide a FREE post every week with each one having the mission to inspire and support learning across our community.

Thanks for reading Never Stop Learning! Subscribe for free to receive new posts and support my work.

If you found value in this newsletter and believe others can benefit too, please feel free to share it with your friends, family, and colleagues so they can also gain insights and join our growing community of informed individuals!

It helps more than you know. Thank you!

Also - hitting the like button below really helps Substack value this post.