Boomers Stuck With Big Homes to Sell
October 19, 2017
Baby boomers looking to retire, downsize, or cash in are growing concerned that they’ll be unable to sell their big suburban homes as the younger generation shows different preferences in homes.
First-time home buyers are “hungry for starter homes and efficient layouts,” says Javier Vivas, manager of economic research at realtor.com®.
Large single-family homes are lingering on the market. Realtor.com® defines “large single-family homes” as the largest 25 percent of all listings on realtor.com®, which tend to be about 2,900 to 4,000 square feet. On average, large single-family homes are selling up to 73 percent slower than the typical home. In other words, these homes are selling in about 50 days, according to realtor.com®.
Researchers find that large single-family homes are garnering 12 to 45 percent fewer views on realtor.com® than the typical home in each market.
Larger homes tend to come with bigger price tags, which may also be contributing to their longer market times. This often means there’s a smaller buyer pool that can afford them, Arthur Miller, founder and CEO of AMLUXE Realty, based in Miami, told CNBC.
“The McMansions that soon-to-retire people purchased in the '80s and '90s are a very difficult sell right now,” Melissa Rubenstein, a former real estate attorney who now sells luxury properties with RE/MAX HomeTowne Realty in Bergen County, N.J., told CNBC. Some of these homes are outdated and do not include a first-floor bedroom and bath suite, which are now growing in demand, real estate pros say.
Large home listings have risen 2 percent from last year, while listings of all other homes are down 10 percent from last year, according to realtor.com®.
“We’re finding these homes are an albatross for clients,” says Michael E. Chadwick, a financial planner and owner of Chadwick Financial Advisors in Unionville, Conn. “We’ve got several right now who have been trying to sell them and move south, and they’ve cut the asking price by over 30 percent each and they’re still not going anywhere fast.”
Nevertheless, there are still buyers out there who desire larger homes, even if the demand isn’t as high lately. The sales pace of larger homes is about half as fast as the typical home, but notably, sales of larger homes are performing stronger than they did last year. The number of days on the market is down 4 percent, according to realtor.com®.
“The condition of the property seems to have the most effect, as buyers are expecting turnkey properties,” Brandon Boudreau, chief operating officer of Metro-West Appraisal, a nationwide real estate appraisal firm, told CNBC. “As long as the sellers have realistic price expectations, there are no problems selling larger homes.”
Source: “Boomers Worry They Can’t Sell Those Big Suburban Homes When the Time Comes,” CNBC (Oct. 14, 2017)
Updated: August 21, 2018