Older Americans will contribute meaningfully to inventory in 2023
While families with school-aged children still account for the most listings, retirees and empty-nesters make up a significant market share.
Key points:
- A new report from TKI predicts 5.7 million homes have a higher probability of coming on the market in the next 12 months.
- “Older families and Americans should not be forgotten. They make up a sizable pool of potential sellers and should be marketed to,” said TKI CEO Tom Gamble.
- Demographics vary at the local level, with younger families contributing the most listings in some Texas and Utah cities, and older sellers dominating in several Florida markets.
Older Americans, particularly empty nesters, could have more of an impact on the 2023 real estate market.
TKI, a Philadelphia-based predictive analytics firm, released its quarterly nSkope report which indicates a sizable portion of homes listed for sale will be coming from older generations.
The report, which predicts 5.7 million homes have a higher probability of coming on the market in the next 12 months, still expects families with school-aged children to lead the way, representing 23.5% of all existing home listings, followed by families with a young adult 18-24, representing 15.8% of listings.
However, empty-nesters — homeowners between 45-64 with no children at home — are expected to make up 10.2% of all listings, while adult singles will likely add 8.7% and retirees another 7.5%.
"Obviously, growing families will always be sales drivers, but the report shows that a sizable percentage of potential sellers are not in this group," said Tom Gamble, co-founder and CEO of TKI. "They are likely not looking to move up or be in better school districts. This is especially true in numerous Florida and Arizona markets, along with places like Myrtle Beach and Santa Rosa where the older age groups are over-indexing."
Gamble noted in an email that the older demographic will increasingly account for a larger share of new listings, as well as new buyers. Americans over the age of 65 have a homeownership rate of around 80%, and around 10,000 Americans are turning 65 every day, Gamble said.
On the local level, listing demographics will vary widely. While 23.5% of listings for existing homes in 2023 are predicted to be from families with school-age children, in McAllen, Texas, that market share jumps to 67%, according to the report. McAllen was followed by Provo, Utah, (62.7%), Logan, Utah (54.8%), and El Paso (53.1%).
Florida communities dominated the list of areas with the largest share of retirees and empty-nesters putting homes up for sale. Listings from those groups each represented around 20% of the overall market share in cities including Punta Gorda and Homosassa Springs.
With fewer buyers and sellers in the current market, competition for leads will only heat up.
"With a projected slowdown in 2023 sales, it is critically important to understand the lifestyle triggers that will impact listings," said Gamble. "Older families and Americans should not be forgotten. They make up a sizable pool of potential sellers and should be marketed to."
The report also makes predictions on which metro areas will have the highest percentage of listings in the coming year. The company uses a variety of factors to make this determination, including migration trends.
Among the largest metros, Washington, D.C. tops the list, followed by Dallas, Atlanta and San Francisco. Expected 2023 inventory in those markets ranges from around 13% to 15% of total homes.
In mid-size metros, cities predicted to have the highest inventory this year include Austin (17.2%), Denver (16.8%), Colorado Springs (16.6%), and Salt Lake City (16.1%).
Among the smallest metro areas analyzed, Casper, Wyoming (13.7%), Hinesville, Georgia (12%), and Corvallis, Oregon (11.6%) top the list.
More details on specific local markets can be found in the full nSkope report.