AUSTIN (KXAN) — Online real estate company Zillow is expecting more homes to be on sale by 2037, helping to alleviate the country’s housing shortage crisis.
Zillow is calling the flood of homes the “Silver Tsunami” because the analysis is looking at how many homes baby boomers own now and how many will sell those homes in the next 20 years. The company explained:
“The Silver Tsunami is estimated to hit in earnest as the number of seniors aged 60 or older who pass away each year rises during the 2020s and 2030s. In the decade from 2007 to 2017, roughly 730,000 U.S. homes were released into the market each year by seniors aged 60 or older. From 2017 to 2027 and from 2027 to 2037 that number is set to rise to 920,000 and 1.17 million per year, respectively. This means more than 27% of today’s owner-occupied homes will become available by 2037.
For Austin, however, that number is much smaller.
“That’s a reflection of how Austin has grown tremendously quickly, attracting a lot of young families,” said Jeff Tucker, economist at Zillow.
In the Austin metro, Zillow expects only about 7 percent of the homes to become available by 2027 and 19.8 percent by 2037.
Tucker said for rapidly-growing cities, the takeaway of the study isn’t “a sense of complacency — “our housing shortage is going to be resolved ” — but rather, it’s a more urgent issue that needs to be addressed soon.
“There are a lot of millennials right at the cusp of entering their 30’s, right at the cusp of trying to buy their first home, and they’ll be trying to become homeowners while most baby boomers are sitting tight in their homes,” Tucker said. “So this is important for everyone across the country, but especially important for Austin.”
Supply and demand imbalance
In Central Texas, Romeo Manzanilla, 2020 President of Austin Board of Realtors (ABoR), said, “Some areas, as soon as home goes on the market, it’s multiple offers that same day.”
According to ABoR, the median price for a single-family home in central Austin is $505,000. Seven years ago, the median price was at around $302,000.
“When you get a home that goes on the market, you’re going to be competing with multiple home buyers, investors, cash offers, all types of financing, so in some circumstances, I mean we’re seeing offers that are coming in 10-15 percent above asking price due to the demand,” Manzanilla said.
He explained the housing supply released by baby boomers isn’t enough to meet the demand because Austin area’s population is expected to double by 2040.
Tucker said, “Building lots of homes is my No. 1 prescription for a housing shortage.”