As housing prices continue to rise across the country, elderly adults are finding themselves at the intersection between solution and exploitation. According to J. P. Morgan, housing prices are continuing to rise at a rate of 3-4% year over year increasing the difficulty for new buyers to enter the market. Namely, Gen-Z.
However, older adults are finding themselves in a sticky situation as they begin to move out of their long-standing homes. On average, sellers at or over the age of 70 begin to see sale prices below their home’s traditional market value, according to a new study from the Center for Retirement Research at Boston College. This means that, compared to homeowners in their 40s and 50s, older adults are losing out on thousands of dollars.
Though perhaps there are emerging solutions driven by the affordability crisis — solutions that require the hearth, and home, of a whole family unit, that is.
Equity and staying-power
The average home is priced at $405,400. Meaning that a homeowner looking to sell at 80 years old would lose out on 5% of the value or, more jarringly, $20,270, according to the study. And the distance between value and sale price only continues to widen, as age increases.
As of 2024, there were 65 million people in their 60s and 70s, who accounted for 36% of homeowners across the nation. And while many are choosing to age in place, not all have that luxury.
Research has found that many older adults looking to sell have neglected some home improvements and upkeep, losing value in the process. Meanwhile others are likely to sell privately through listings that don’t involve the market and are therefore more often bought below value. Of course, these private listings do involve investors, who are looking for opportunities to press for the lowest asking price, especially for individuals with a lack of other options.
While profit-loss is never an attractive option, it is particularly detrimental when applied to homeownership, which is the largest wealth investment most people will make throughout their lives.
In 2023, a report from the Joint Center Center for Housing studies at Harvard found that most older adults have over $250,000 of equity tied up in their homes. Meaning that selling under-value is simply not an option.
New solutions, or necessary ones?
In lieu of selling at a loss, older adults, and their larger family unit, are finding new ways to age in place through multigenerational living. Encompassing three to four generations, families are increasingly finding it easier and more convenient to live together.
This may not always mean overcrowding in one home. In fact, it often entails multiple properties in a centralized location that ensures equal care and upkeep between participating members. Accessibility ranges according to price and amenities, but one thing remains constant: Older adults are navigating manipulation through village-style living.
There are simple options, such as neighboring residences that pair older adults with their children and grandchildren who ensure care is supplied as needed as the oldest age. If the children are grown and working on their own, there may be options on the more expensive side that become realistic when cut up between three generations, such as compound living. Or, for the rich and famous, there are options that encompass entire neighborhoods to ensure close proximity to loved ones in need in addition to safety and privacy.
Opportunity or obstruction?
The reality is, this isn’t just an acceptable option to stave off greedy private equity firms looking to scoop up homes under-value from those with no other option, it’s a luxury to have family close enough, and capable enough, to live in a multigenerational situation.
Many older adults don’t have access to extended family, or their family members don’t have the ability to live and work in the same town as their aging parents. And many people in Gen-Z can barely afford to enter the homeowner’s market, leaving them at home with their parents for years on end, without a realistic opportunity for flying the nest.
The question that remains, then, is whether multigenerational living is an exciting new option, or a needs-based settlement forced on anyone other than the richest because of an ever-widening wealth gap, for Gen-Z and older adults alike?
