Millennials, today’s top home purchasers, have a significant influence on where baby boomers, the second largest group of buyers, choose to live. Retirement generally entails a full lifestyle transition, and many baby boomers are relying on their children and grandchildren to help them decide where to settle down next.
According to a recent Zonda survey, around a quarter of baby boomers plan to retire near their grandchildren, earning them the moniker “baby chasers.” The third annual Zonda Baby Chaser Index examines migration trends, which are vital to understand since they feed housing demand.
For both demographic cohorts, the Zonda Baby Chaser Index considers both long-term migratory patterns and present tendencies. While the index’s most recent migration data reflects tendencies prior to COVID-19, it’s thought that the virus’ impact could amplify those patterns.
“I’m not surprised to see Charlotte, Austin, and Phoenix top the list as all three are great relocation markets for millennials,” says Tim Sullivan, Zonda’s senior managing principal of advisory, who travels across the country working on new-home projects. “These markets also allow many baby boomers to live a classic retirement consisting of downsizing their home, saving some money, being near their family, and, in some cases, having a better quality of life.”
The Southeast and Southwest, like in previous years, remain the most popular destinations for baby chasers. Many of the top areas have characteristics such as diversified economies, a strong or increasing tech presence, pleasant weather, and reasonably priced new housing. Charlotte, this year’s top metro, meets all of those boxes.
Charlotte is home to a variety of companies, including Bank of America, Truist, Belk, Lowe’s, and Honeywell, to name a few. Furthermore, Charlotte is a magnet for new expansion because of an advantageous tax environment, expanding entertainment offerings, and its geographic proximity to both the mountains and the beaches.
The Queen City is a hot spot for baby chasers because of all the aforementioned reasons plus the diversity of the housing stock” says Shaun McCutcheon, Zonda’s vice president of advisory in the Southeast. He notes that Charlotte has a variety of low- and high-end conventional homes, as well as low-end and high-end active adult communities, allowing folks migrating from the Midwest and California to be satisfied with their choices. “There are housing options that range from starter homes in the $200,000s to lakefront properties that can be found for around $1 million, the latter of which would be five times that price in other markets.”
It’s possible the covid-19 pandemic only exaggerated these moving trends. Zonda’s top baby chaser markets have gained steam as the work-from-anywhere trend gave people more flexibility in where they live. The main concern going forward will be how builders will keep up with demand given how frequently it shifts and the concerns over rising lumber prices.