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Housing: Too Many Big Homes

Written by Staff Writer
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house 2822944 640A Growing Problem in Real Estate: Too Many Too Big Houses -Wall Street Journal
"Large, high-end homes across the Sunbelt are sitting on the market, enduring deep price cuts to sell. That is a far different picture than 15 years ago, when retirees were rushing to build elaborate, five or six-bedroom houses in warm climates, fueled in part by the easy credit of the real estate boom. Now, many boomers are discovering that these large, high-maintenance houses no longer fit their needs as they grow older, but younger people aren't buying them.

Tastes - and access to credit - have shifted dramatically since the early 2000s. These days, buyers of all ages eschew the large, ornate houses built in those years in favor of smaller, more-modern looking alternatives, and prefer walkable areas to living miles from retail....The area around Scottsdale, Ariz., popular with wealthy retirees, had 349 homes on the market at or above $3 million as of February 1 - an all-time high, according to a Walt Danley Realty report. Homes built before 2012 are selling at steep discounts - sometimes almost 50%, and many owners end up selling for less than they paid to build their homes, said Walt Danley's Dub Dellis....The problem is expected to worsen in the 2020s, as more baby boomers across the country advance into their 70s and 80s, the age group where people typically exit homeownership due to poor health or death, said Dowell Myers, co-author of a 2018 Fannie Mae report, 'The Coming Exodus of Older Homeowners.'"