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The Silent Generation: Downsizing Homes & Joining Senior-Related Housing

The Silent Generation, buyers aged 73 to 93 years, made up the smallest share of buyers by age at only seven percent of all home buyers in 2018. The median age for this group was 76 years old and they were born between 1925 and 1945. They tended to have the smallest families; 96 percent of these buyers had no children living at home under the age of 18 years and they made up the same share of single female buyers as Younger Boomers at 25 percent. Of the generations, buyers 73 to 93 years bought fewer multi-generational home at 13 percent. For those that purchased a multi-generational home, the reason was for the health and caretaking of aging relatives at 13 percent.

The Silent Generation had the smallest share of first-time home buyers at only four percent, which was expected for their age group. Correspondingly, they made up the largest share to move directly from a home that they owned at 82 percent. They also had the lowest median household income at $69,600, likely living off retirement funds. They managed their finances accordingly and bought homes with the second lowest median home price at $243,000. They also purchased some of the newest homes last year with a median year of 1996.

Buyers aged 73 to 93 years also bought new homes at 14 percent and wanted the amenities of new home construction communities (23 percent). These buyers were the most likely to purchase a duplex, apartment, or condominium at nine percent, or a townhouse at 10 percent. They were also the most likely to buy a home in senior-related housing at 29 percent. These buyers wanted a home convenient to friends and family (47 percent) and for the convenience to shopping (34 percent). They were the least likely to buy homes in an area for the quality of the school district, convenience to schools, or for the convenience to a job. They were also the least likely to compromise on the condition of the home (16 percent). The Silent Generation also bought frequently in a rural area at 23 percent.

The age group of buyers 73 to 93 years were the highest share among the generations to purchase for the desire to be closer to friends and family (27 percent) and for a smaller home (17 percent). They had an expected tenure in the home at a median of 10 years. They were the most likely to move due to a household member’s health and least likely to want a larger home.

Foreign Buyers Purchased $4.8 Billion in U.S. Commercial Real Estate in 2018

International clients are an important niche market for residential and commercial REALTORS® alike. In the latest 2019 Commercial Real Estate International Business Trends, NAR reported that foreign buyers purchased $4.8 billion of U.S. commercial real estate in 2018.[1] The median value for a buyer-side transaction was $600,000, while the median value for a seller-side transaction was $1 million. The dollar volume of foreign buyer purchases of U.S. commercial property declined in 2018 compared to the $6.7 billion in 2017 and $7.9 billion in 2016 as the economic expansion slowed in Asia (e.g., China, Japan), Canada, Europe (e.g. United Kingdom, Germany, France, Italy, and Spain), and Latin America.

Major Buyers of Commercial Property

Asia was the largest source of U.S. commercial property buyers, accounting for about a third (34 percent; 28 percent in 2017) followed by the Canada and Latin America (29 percent; 25 percent in 2017), Europe (20 percent; 29 percent in 2017), Middle East (10 percent; 12 percent in 2017), Oceania (2 percent; 1 percent in 2017), and from other countries that were not identified by respondents (3 percent; 6 percent in 2017).

The top foreign buyers of commercial property were China (21 percent), Canada (7 percent), Mexico (6 percent), Germany (5 percent), India (5 percent), Israel (5 percent), United Kingdom (5 percent), Venezuela (5 percent), Vietnam (5 percent), and Italy (4 percent).

Major Destinations of Buyers of Commercial Property

Florida was top choice among foreign buyers of U.S. commercial property (20 percent) followed by Illinois (13 percent), Texas (11 percent), and California (9 percent). Other top destinations were Georgia, New York, Virginia, Hawaii, Maryland, Massachusetts, Nevada, New Jersey, and Oklahoma.

Financing and Types of Property Purchased

About half of commercial foreign buyers, 52 percent, made an all-cash purchase (70 percent in 2017), and 25 percent obtained financing from a U.S. source.

International commercial buyers purchased across a variety of property types, but apartment was the most preferred, at apartment (19 percent), followed by retail (16 percent), land (12 percent), industrial (11 percent), office (9 percent), hotel (9 percent), and other types.

The bulk of foreign buyers of commercial property purchased the property as an investment to be rented out (39 percent in 2017), and 33 percent purchased the property for a business they participate in (34 percent in 2017). The Other category, which accounted for 22 percent (16 percent in 2017), includes a purchase of the property for residential and business-related uses.

Reasons Foreign Client Decided Not to Purchase U.S. Commercial Real Estate

One in five international clients decided not to purchase U.S. commercial properties in 2018 (17 percent in 2017). Understandably, the primary reason deterring a purchase is cost and exchange rate changes (36 percent of clients who decided not to purchase; 30 percent in 2017).Other major reasons are the buyer “could not find a property” (31 percent of clients who decided not to purchase), difficulty moving money out of the country (22 percent; 17 percent in 2017), tax-related issues (22 percent; 17 percent in 2017), immigration/visa (9 percent), and difficulty obtaining financing (9 percent).


[1] NAR also estimates foreign buyer purchases of U.S. residential property. According to the 2018 National Association of REALTORS® Profile of International Activity in U.S. Residential Real Estate, foreign buyers purchased $121 billion of residential property during April 2017—March 2018, or eight percent of the $1.6 trillion of total existing home sales during the same period.

 

Older Boomers: Most Satisfied Buyers Purchasing Forever Homes

Older Boomers, buyers aged 64 to 72 years, made up 14 percent of all home buyers in 2018 again this year. The median age for this group was 68 years old and they were born between 1946 and 1954. Within this group, they had the third largest share of single female buyers at 20 percent. Their primary reasons for purchasing a home were the desire to live closer to friends and family (22 percent), followed by retirement (19 percent).

Combined, Older Boomers owned the highest share of investment (10 percent) and vacation (seven percent) properties. Older Boomers were the most likely to purchase homes in a rural area (25 percent) and in a small town (14 percent).

Compared to other buyers, they moved the greatest distances at a median of 30 miles, same as the Silent Generation. Older Boomers were the less likely to purchase homes for the quality of school districts or convenience to schools. Rather, they purchased homes for the quality of the neighborhood and for convenience to friends and family. This age group found commuting costs the least important. Overall, Older Boomers were very likely not to make compromises on the home when they purchased (49 percent), citing that they were never moving and it was their forever home (33 percent).

In their home search process, Older Boomers were very likely to contact a real estate agent first and they were the least likely to find the paperwork a difficult step. Older Boomers were the most satisfied with the home buying process at 94 percent.

Older Boomers’ income was below the median income of all buyers ($91,600) at just $83,200 and they purchased homes at a median price of $250,000. Older Boomers were very likely to use the proceeds from the sale of a primary residence as the source of their downpayment (54 percent) and from an IRA account (five percent). They were the largest group of home buyers to have credit card debt at 67 percent.

Older Boomers were the second largest share of home sellers at 22 percent in 2018. The median age for an Older Boomer seller was 68 years. They had the second lowest median income at $81,700. They were the most likely to sell to be closer to friends and family (26 percent) and for retirement (16 percent), and at a median distance of 50 miles from the home they recently purchased. They were also very likely to sell when they wanted to (96 percent). They receive the second highest equity at 43 percent and second highest dollar value at $74,000.

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The Roskelly Team
Jessica Hood, REALTOR®
1166 Route 3 South #106
Gambrills, MD  21045
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Jessica was excellent selling our Piney Orchard townhouse and helping us find and purchase our dream home! From the beginning, her marketing plan was impressive, her professional staging and the professional photos were so good, we almost didn't want to sell! When we were uneasy, she calmed our fears. She found us the absolutely perfect new home and helped us negotiate to get exactly what we wanted. She is extremely knowledgeable with many years of experience to draw from. Her team was great to work with as well, especially Darby who kept us up to date and was very responsive, taking care of all of the details! We are thankful to Jessica and her team for such great work! The Dupee Family - Piney Orchard
We wanted to let you know how thrilled we were with your service in selling our house! From the very first meeting to the very end, both of you made the whole experience painless. Your professionalism and knowledge of the market in our area gave us confidence that we would be able to sell our house quickly and you delivered! With your track record of selling at least two other homes in our neighborhood each within 7 - 10 days, we had all the confidence and firm belief you could add our house as #3 on your record. You informed us that it would be hard work, but together we met our goal date of putting the house on the market 45 days after we met and you selling it in two weeks. ↵↵We count our blessings every day and firmly believe that you and Jessica are the miracle workers in the real estate industry. You continued to do an outstanding job with the final negotiations and guiding us in the right direction. As a result of listening to you, we were able to sell our house for a fairprice which enabled us to enjoy the next chapter of our lives in Texas. Thank you again for your hel and most of all just being good and honest people in helping others sell there homes. Roger & Susan - Piney Orchard Home Sellers
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