Who Moves? Not Old People? (reposted from my Forbes blog)
A meme is out there that baby boomers, having raised their children, are ready to downsize. (See here). Some scholars, such as Arthur Nelson at Utah, say that as the population ages, there could be a mass sell-off of houses which will lead to a collapse in house prices.
One of our Ph.D. students here at USC, Hyojung Lee, and I are redoing a paper I did with Patric Hendershott about 17 years ago on the impact of age on the demand for housing. Back then, Pat and I found that the effect of age was pretty minimal. But times have changed, and so Hyojung and I decided it would be worth redoing the exercise using current data–the 2006-2010 American Community Survey. We decided to look at moving behavior over the entire five years, and in 2006 and 2010 individually, since 2006 was a boom year for housing and 2010 was a bust year.
After controlling for marital status, income, educational levels, race and ethnicity, and geography, we estimated the impact of age on the propensity to have moved in the previous year. The results are summarized in the graph below (for those who want to know, these are the coefficients from a linear probability model):
As you can see, basically the propensity to move peaks in the early 20s, and then declines to about age 50-55, and then stays pretty flat for the remainder of life (although in 2010 the very oldest seem to have a slightly greater propensity to move).
Some other findings: those never married are most likely to move, while those widowed are least likely to move (after controlling for age). This implies that the typical elderly person is even less like to move than is implied by the graph above. Asians are the racial/ethnic group most likely to move–non-hispanic whites, hispanics and African-Americans have similar propensities. Mobility increases with educational attainment. Higher income people move less than low income people.
We are doing a lot more work with this data as we prepare it for a paper, but in the meantime, our findings suggest that a mass sell-off (which means mass moving) arising from aging is unlikely.