Most New York City co-ops and condos have been able to rely on a vast pool of prospective buyers: baby boomers. Back in the day, they were looking for a home where they could raise a family; now, with the kids grown and the nest empty, many boomers are looking to downsize.
But a new study by Rent Cafe offers startling evidence that in New York and the rest of the country, a growing number of baby boomers, put off by high sales prices and crushing property tax bills, are opting to rent instead of buy, silive.com reports. If apartments become difficult to sell, the implications for co-ops and condos are significant.
From 2009 to 2015, the study found, 125,000 baby boomers (aged 55 and up) abandoned homeownership in favor of renting in New York City. Nationwide, 2.5 million baby boomers joined the renter cohort. “We looked at the renter population by age group, education level, and family type,” says Nadia Balint of Rent Cafe. “And we found the fastest-growing segment of the country's rental population were those age 55 and older. They increased by 28 percent nationally. The highly-educated renter, holding a bachelor degree or higher, increased by 23 percent nationally. You are seeing older couples, empty-nesters, highly educated, who are choosing the renting lifestyle for various reasons.”
And what are those reasons? “I am seeing more seniors looking to rent as the prices of the traditional empty nest downsizing options – condos and co-ops on one level – continue to go up," says attorney Andrew Klapper, a partner at Klapper & Klapper. "They [baby boomers] are looking for low-maintenance, high-convenience, and no stairs to walk. They get all of this, and no unexpected repair and maintenance expenses in rental buildings, with the additional benefit, a fixed monthly housing expense.”
Another factor might be a simple failure to plan ahead. "The sad reality for baby boomers is the fact that a large segment of this generation has failed to put aside enough money for retirement in their 401(k) or retirement plans," says Joan Camerlengo, owner of her eponymous Staten Island real-estate brokerage. "Unfortunately, social security benefits are not enough to make ends meet. As a result, some are forced to sell their homes in order to lower their living expenses.”
Thinking of buying a co-op or condo? Already bought, and not sure how co-op/condo life and rules work? Learn all about purchasing a place and living in your new community. It's not like renting, and its not like owning a house. What's it like?