It may not be a new phenomenon exactly, but grandparents making big moves to be closer to grandchildren have a relatively new term — “baby chasers.”
In fact, real estate research firm Meyers Research recently released its Meyers Baby Chaser Index, which indicates that 25 percent of Baby Boomers will likely retire to be near their grandchildren, even if it requires a state switch.
Dallas, the firm said, was at the top of the list, along with Charlotte, North Carolina; Austin; and Nashville, Tennessee. “Dallas’ growth decelerated in the latest data for both age groups but remains among the highest in the country,” Meyers said.
Meyers’ director of economic research, Ali Wolf, said her findings revealed that these “baby chasers” are even changing housing dynamics across the country, since as the boomer generation ages, they require different amenities and necessities in housing than younger buyers do.
The Baby Chaser Index was designed, the firm said, to demonstrate the overlap between Baby Boomer and Millennial migration patterns, considering longer-term patterns and current trends.
For most boomers, affordability is still important — they’re likely looking to capitalize on some hard (and patiently) won equity from the sale of their current home by buying something a little less expensive when they relocate.
“Baby Boomers are often looked at as moneybags, but affordability is a top factor for homebuyers regardless of age. For those leaving their current city, retirees are often looking to sell their home, relocate, and pocket some money,” the report said. “That success depends on where they are coming from. In our top Baby Chaser market, Charlotte, for example, Rust Belt state relocators more frequently enter with less equity than those from New York.”
“That’s why it is important to measure not only where people are moving to but also where they are coming from.”
Wolf’s research revealed that there was a “secret sauce” for the baby chaser market, too, that includes the ability to downsize not downgrade.
“The ‘secret sauce’ for this homebuyer connects back to key drivers for the active adult market: 1) the ability to move down in size but not quality, and 2) pay for the new home with proceeds from the sale of a previous home with some cash left over. What differentiates the Boomer buyer from their parents’ retirement process is that the Boomer is moving to, not away, from the kids,” Meyers Research senior managing principal Tim Sullivan said.
So what is the grandparent market looking for? Homes under 2,500 square feet, according to the firm’s Consumer Sentiment and Product Insights Survey. Room for grandkids to visit, including larger common areas, spare bedrooms, and outdoor amenities. And, if possible, they want to know if seniors get discounts or exemptions on things like property taxes or income taxes.
We have been talking about the burgeoning “downsizer” market for a while, and even talked to Grenadier Homes and California-based The Resmark Companies, who have partnered to create housing options in Prosper for first-time buyers and grandparents alike.
The Villas at Windsong Ranch will be single-story, two or three bedroom plans with small private yards and/or patios, built with the company’s Universal Design that has been popular with the fast-growing 55-and-older market, and will include touches that make the homes friendly for mobility-limited buyers — things like wider doorways and halls, easier-to-use faucets, showers, and other options.
“We call them a move down buyer, and a lot of those folks are typically empty nesters where they might have had four or five people in a house at one point, and now they’re down to two,” Resmark’s Michael Zarola said. “So what we’re finding is that they don’t need as much space.”
But it can also be difficult for those downsizers or move-down buyers to find properties that they can live in for a few more decades, despite their usually great credit and previous homeownership.
“Sometimes it’s hard even though they’re very well-qualified buyers because they’ve owned a home for many many years,” Zarola said. “They typically have equity built up in their current homes, but the dynamics of what we’re finding is that some of those buyers take a while to come to the conclusion that they want to downsize, and they think they need to hold on to that big home because they want the kids to come and visit and grandkids to be there.”
Resmark’s experience in the market jibes with Meyers’ “baby chaser” findings.
“You don’t want to be far from the grandkids, and you actually want to be close to your children and your grandchildren,” Zarola said. “And so what we’re finding is that there’s a lot of these buyers want to be in suburban markets. They don’t want to be out in the middle of nowhere – they want to go to the same church that they went to, or that their kids and grandkids go to, and they want to go to the same grocery store, and so on.”
