The first time Arthur C. Nelson and I spoke about what he's come to call the "great senior sell-off," back in March, he was broadly worried that baby boomers would soon begin trying to sell large suburban single-family homes that no one would want to buy.
Tastes change. Demographics shift. And America's home-ownership rate has been on the decline. Combine all of those factors, Nelson predicted, and the gap will only widen in the coming years between the share of seniors trying to downsize, and the number of young families eager to take their place in the kind of housing popular in the 1990s.
"That's going to hit us," Nelson warned of all this unwanted housing. "Not right now. But my guess is that about the turn of the decade, that number will become a real number."
In the months since then, Nelson, director of the Metropolitan Research Center at the University of Utah, has been trying to nail down what that number could really look like. He's at work now on a new book on this research (tentatively, suggestively titled "The Great Senior Sell-Off: How Boomers will Reshape America's Housing Market to 2040"). In the December issue of The Atlantic, he gave us a preview of his findings, and he now believes the future looks more grim than he feared back in March.
By Nelson's calculation, 20.1 million senior households will be trying to sell their homes between 2015 and 2030. As many as 7.4 million of them won't find a willing buyer – a number, as we outline in the magazine's Chartist feature, that could send us towards the next housing crash.
That's a nationwide statistic that obscures the fact that some places will be hit much harder by the "senior sell-off" than others. As Nelson emailed me today:
Growing places will be fine, such as Texas, as well as most of the Western and Southeastern states, but large swaths of America will become very hard hit with rippling effects throughout the nation's economy and society.
Of course, it's hard to predict how the market will respond. Maybe banks will step in to buy these homes when individual families will not (likely at a steep discount that seniors won't like). Maybe something significant will change between now and then in our immigration or education policies, creating more high-income minority families eager to move in to five-bedroom, high-priced suburban homes (as Nelson notes, the fastest growing portion of the U.S. population currently has the lowest home-ownership rate).
Maybe the communities around some of these homes will evolve into denser, amenity-rich places, so that a house that demanded two cars a decade ago will become more transit-friendly in the future.
Heck, maybe some of these homes will be subdivided, creating a new kind of multi-family market out of empty McMansions.
At any rate, Nelson argues, it's time to start planning now for the likelihood that our current housing won't fit future demand, and in a very serious way.