What has been coined “The Great Wealth Transfer” is already underway; the Baby
Boomer generation, those born between 1946 and 1964 (an estimated 73 million people),
will all be 65 within 9 years. As the Transfer is complete, Millennials and Gen X will
receive up to $59 trillion through inheritances largely consisting of real estate. Aside from
the obvious impact on the housing market (most people who inherit property will sell that
property quickly), a wealth transfer of that scale is bound to shake up several markets.
The Baby Boomer generation has approximately $6 trillion in real estate equity; as
this generation ages into needing full-time care, and many move to senior living facilities, a
bevy of single-family homes will become available on the market. Indeed, Fannie Mae
predicts that there will be between 10.5 and 11.9 million single-family homes on the market
between 2016 and 2026. This should be welcome news for buyers, the majority of whom are
beneficiaries of the Great Wealth Transfer, as a higher supply of homes on the market
means more favorable terms for buyers (whereas low supply has provided lucrative benefits
to sellers of the last year).
While the Great Wealth Transfer will create entirely new markets, markets we
haven’t even imagined yet, we can imagine the impact it will have on the housing market as
a whole. While there has been quite a bit of academia surrounding the disparity of wealth
between the two generations, that issue will become a moot point in the near future. Given
that the vast majority of Americans understand that property ownership is a perquisite to
wealth and financial stability, there can be no doubt that the real estate market is going to be
very busy for the foreseeable future.
At the Chernov Team we understand that knowledge is power, and knowledge of
how The Baby Boomers’ aging impacts the housing market as a whole is powerful
knowledge indeed. At the Chernov Team we know that whoever comes to the table most
prepared leaves with the most, and the Chernov Team always leaves the table with the most.