Albuquerque to be Hit Harder by “Silver Tsunami”
In the short term, Albuquerque faces a housing crunch, as a lot of buyers bid for not enough houses. In the much longer term, however, Albuquerque is expected to have more empty houses than most cities, due to the baby boomer generation leaving their single-family homes behind, according to a recent study from the national housing website Zillow.
The study evaluates the potential impact on local housing markets of the large number of aging adults dying or moving out of their homes in the 10 to 20 years, a phenomenon referred to as the “silver tsunami.” According to the study, the Albuquerque-Santa Fe-Las Vegas metro area will see 29.6% of its owner-occupied homes released into the market from the silver tsunami by 2037, the ninth-highest percentage among the 59 metro areas examined.
Unless the city gets a new influx of retirees or becomes more popular with young professionals, Albuquerque can expect to see plenty of vacant houses without enough buyers to fill them, according to Zillow economist Jeff Tucker.
“It would be hard to find enough buyers without another influx,” Tucker said.
Albuquerque home prices have shot up in the last 24 months. During the third quarter of 2019, the average sale price for a single-family home in metro Albuquerque stood at $261,219, up nearly 10% from the same period in 2017, according to data from the Greater Albuquerque Realtors Association. Realtors have attributed the growth to a more stable local economy and a shortage of new homes built in the area since the Great Recession.
Despite the recent growth, Tucker said Albuquerque is more vulnerable than most metros to seniors leaving their homes, due to its popularity as a retirement destination and its slow population growth compared to cities like Austin.
Tucker said the study used 2017 data from the U.S. Census Bureau in conjunction with information from the Social Security Administration’s actuarial life table and other sources to come up with its findings.
Sunbelt cities dominated both the top and bottom of the list. Tampa, Fla., led the way, with 33.2% of owner-occupied homes predicted to be vacated by 2037, followed by Tucson, Ariz. On the other side, Dallas, Houston, Austin and Denver were each in the bottom 10.
Tucker said a big determining factor, particularly in the Sunbelt, is each city’s ability to attract young professionals, an area that Albuquerque falls short of peer cities in. Without that, Albuquerque will be susceptible to losing homeowners more quickly than it gains them.
“There’s not blazing fast population growth in Albuquerque,” Tucker said.
Still, Tucker cautioned against treating the study as a cure-all for Albuquerque’s current housing woes. For one thing, he said a cohort of younger buyers will be looking to purchase new houses within the next few years, before the trend intensifies.
For another, new buyers may look in different parts of the metro area than the retirees have bought in. Tucker said the hardest-hit portions of Albuquerque proper will be the Far Northeast Heights, which has limited shops, schools and offices.
“For retirees, they’re not commuting, and they don’t need to worry about how far their commute is,” Tucker said.
Posted on nationalmortgagenews.com on 12/16/2019.