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Deborah Frieden and her husband love their neighborhood near Lake Merritt in Oakland, California. The couple raised their family in the three-bedroom single-family house they've lived in for the last 36 years.
Now in their early 70s, they're starting to plan for a future when they won't be able to garden and climb several sets of stairs every day. But as they look around for smaller, more accessible homes in the area, they've found their options are limited, though not by their finances.
Frieden and her husband are among the many fortunate baby boomers who bought relatively affordable homes decades ago, paid off their mortgages, and have seen their home equity soar. They spent just north of $300,000 on their house back in the 1980s. Now, homes similar to theirs nearby are selling for between $1.6 and $2.2 million, and the couple is financially well set up for retirement. But they're struggling to find the right home to retire in.
Frieden and her husband are prioritizing accessibility, so they've looked mostly at larger condominium buildings with elevators. But they'd also like a small outdoor space, like a balcony, enough wall space for their art, and a home office and spare bedroom for visitors.
But there are very few bigger units available, Frieden said. Most of the condos are small one- or two-bedrooms without any outdoor space and with modern, open-plan layouts that appeal more to younger people's tastes and lifestyles.
"They feel and seem like they're built for young people," Frieden said of the condo buildings. "They even market, 'the greatest thing about our complex is the gym and the shared courtyard, shared rooftop environment, the bike racks' — all of these things that might not be first on the mind of a senior."
The couple wants to stay in their neighborhood. They have lots of friends nearby, and Frieden loves being able to walk to the farmers market, Trader Joe's, and the park. She fears being forced to move someplace less walkable as she ages out of driving. "I have fantasized about trying to find a lot to build a small unit on in this area," she said. "It would be crazy as a senior citizen to move somewhere where then I have to take my car to shop."
Baby boomers are staying in their homes much longer than previous generations did, in part because re-entering the market with mortgage rates and home prices so high doesn't make financial sense — or just isn't affordable. Many want to transition into smaller, more accessible homes in transit-oriented, walkable communities, but the supply just isn't there. Like Frieden, they're having a hard time finding what they need on the market.
The national shortage of housing has prompted lots of new multi-family construction over the last couple of years. But new units are mostly smaller in size, in part because developers make more money per square foot on studios and one-bedrooms than they do on two-bedrooms, three-bedrooms, and larger units.
Frieden says she's surprised developers aren't doing more to meet the demand, particularly at the higher end of the market.
"Real estate developers are missing a huge opportunity to target this group — not to create senior housing, but to create condominiums that are more versatile and appeal to people who have a little bit more money," said Frieden, and "who could afford to pay a little bit more to have these amenities, to have a unit that's a little larger, that has a little more storage, that has maybe even more flexible layouts, and some kind of outdoor space."
Older folks aren't the only group suffering the consequences. Multigenerational families who want to live in denser urban areas are having a hard time finding larger, family-sized apartments and condos. Empty-nest boomers now own twice as many large homes as millennials with kids do, according to a recent Redfin analysis. This is making it even harder for millennials and households with kids to break into the market or upsize their homes.
This misallocation of housing — and shortage of larger condos and apartments — will become increasingly urgent as boomers age in homes that aren't ideal — or even safe — for them.
"There are baby boomers I've met who have two-story homes that they never go to the second story of because they can't go up the stairs anymore," Redfin chief economist Daryl Fairweather told BI recently.
