Economy Delays Boomers' Plans to Sell Homes

Economy Delays Boomers' Plans to Sell Homes

CNBC

By Lulu Chiang, Senior Field Producer, CNBC 

NEW YORK (CNBC) -- In a survey conducted by Coldwell Banker Real Estate, 9 out of 10 brokers said "the economy is delaying baby boomers' plans to sell their homes, compared to a few years ago."
The big issue is the huge number of foreclosures. Jim Gillespie, CEO of Coldwell Banker Real Estate, said it really depends on how long it will take to work through the foreclosures in the system.
However, the survey pointed out that baby boomer desire to purchase and own a home remains strong. The reason? Gillespie believes the American dream of owning a home is alive and well.No one seems to have a definitive answer on the timeline. All of this is based on Americans going back to work and consumer confidence coming back. That's the big overhang.
Home ownership is still the American dream. "60-75% of Americans say investing in a home is the safest or second safest investment," said Gillespie. It all boils down to lifestyle. "The long-term future of the housing market looks good," added Gillespie.
Gillespie pointed out that a lot of young people are living with their parents, grandparents or other family members. Once we see job creation and consumer confidence bounce back, Gillespie expects demand to pick up. Right now, many young people out there are renting because the economy is weak, and there may be not as much funding available to them.
Is this just a temporary trend? Gillespie dismisses the idea we are turning into a renter's society. "That is not the case," added Gillespie.
Currently, the baby boomer generation accounts for 79 million Americans. The survey divided up the boomers into two groups, younger baby boomers (ages 47-55) and older baby boomers (ages 56-64). "31% of respondents say that younger baby boomer clients are selling their current home and looking for a larger home, compared to 6% of older boomers," based on results of the survey.
Four out of five agents said that 'older' baby boomers are two times more likely to want to downsize than 'younger' ones. Gillespie stressed that half are downsizing for a simpler lifestyle, not downsizing for economic reasons.
According to the survey, "49% of agents say the primary reason boomers want to downsize is because they desire a simpler lifestyle, while only 28% said the leading reason boomers are downsizing is to save money."
Coldwell Banker Real Estate conducted this online survey across the country about housing trends for baby boomers. Over 1,300 agents participated in this survey. The survey was conducted during the week of September 6 and September 15, 2011.
-- Written by Lulu Chiang, Senior Field Producer and Senior Booker of CNBC's "Closing Bell with Maria Bartiromo" and "The Wall Street Journal Report with Maria Bartiromo."