Fun Fact of the day: by 2030, every Baby Boomer will be at least 65 years old. The average life expectancy for a 65-year-old today is about 19 more years, which is either an encouraging fact or a sobering statistic, I suppose. At 70 million or so, about 20% of our population is in the Boomer age range. Also, in 2030, the oldest Gen X’ers will turn 65.
Anyway, yeah, we’re all getting older, if we’re lucky. I do have a point to make that concerns real estate. Ask a Realtor and they’ll tell you what kinds of houses are in demand as people age, and it should come as no surprise that the older generation doesn’t generally want three-level homes with a flight of stairs to the front door. It’s single level houses they want, with the fewer steps in from the garage the better. Someone should have shared this information with home builders, since those single level houses are getting tougher to find.
More stats. Last year in our local area, about 30% of detached (not condos, not townhomes) home sales recorded in the MLS were for single level houses. Roughly 1800 single level homes out of about 6000 sales. Seems like enough supply for the demand, but that only tells some of the story. Out of those 1800 sales, a whopping 98 of them were new construction. 98 brand new single level houses sold, compared to 1167 that were two or more levels. This isn’t a new trend either. Of those single level homes that sold last year, just 6% of them have been built since 2000.
Your typical single level home in the area is about 1500 square feet and was built in the mid 1970’s. It sells for just under $600k, or $379 per square foot, and spent an average of 36 days on the market (with half of them going into contract in ten days or less). On the flip side, those two story (or more) homes are on average 2700 square feet, about $317 per square foot, and spent 55 days on market.
It shouldn’t come as any surprise that the price per square foot (which is a lousy way to estimate value, but that’s another topic) for smaller homes is higher than larger homes. Diminishing returns and all that. The numbers that stick out to me are the lower market time– they sell faster– and the trend line of new construction not keeping up with the demographic shifts. I understand the why– it doesn’t pencil out to build smaller houses when land costs what it costs. Over time though, this will cause even fewer single level homes to be available while the demand for them increases.
If you’re a buyer and a single level home is a priority, your market looks different than the rest and your strategy should reflect that. Understand that you won’t always have your pick of the litter, and there will be competition for the good ones. Know that since most of these houses are older, factoring in funds for repairs and renovations might be necessary. You may have to act faster than you did last time you were in the market, and I know that’s a tough thing to do for such a big decision.
I’ll leave you with one little nugget of wisdom I’ve picked up along the way. If you’re out there looking for that elusive single level and you’re not having any luck, expand the search to two level homes with a primary bedroom on the main. Any Realtor can craft an MLS search to pick up both the single levels and the MoM (that’s master-on-main, in Realtor-speak) homes, and you’ll have an advantage over those who have their filters limited to single level homes only because they won’t see them. There are plenty of homes that are two level but most of the living is on the main– perhaps there’s just a loft upstairs, or one bonus room– and our MLS requires the square footage of each floor to be delineated so you can see ahead of time what it’ll look like. You can cede that second floor to the grandkids when they come visit and rest easy downstairs.
