The study, "America's Regional Demographics in the '00s Decade: The Role of Seniors, Boomers and New Minorities," conducted by William H. Frey of the Brookings Institution and sponsored by the MBA's Research Institute for Housing America (RIHA), analyzes two components driving the changes that will transform the U.S. population over the next several decades - aging boomers, and immigration of Hispanics and Asians.
It finds that the overall U.S. population will experience a rapid aging as boomers grow older, while absorbing large numbers of young recent immigrants. Different regions of the country will have different demands for housing driven by the relative impacts of aging in place vs. migration within the country and immigration from abroad. For example, suburban areas such as Danville and Alamo will gray faster than more densely populated centers such as San Francisco and Oakland due to the boomers aging in place.
"It has been said that demographics are the future that has already happened, and demographic changes are one of the most powerful forces impacting the residential and commercial real estate and real estate finance markets," said Doug Duncan, MBA's Chief Economist and Senior Vice President of Research and Business Development. "Therefore the real estate industry needs to appreciate these important trends."
"This study provides insightful analyses of current statistics and valuable projections regarding how these trends will likely play out nationally and regionally in the years ahead," he added. "We expect that this study will help our members develop business plans to meet the ever changing American marketplace."
The Bankers Association study shows the number of seniors in a community can increase because more older people move there or because seniors like where they live and choose to stay there. Even in Arizona, which shows the highest rates of overall population growth, the migration effect is dwarfed by the effect of the existing population simply getting older and not moving.
According to the study, the most dramatic impact of aging in place will be in parts of the country which are not now associated with aging populations, such as Nevada, Colorado and Georgia. These are states that will have the fastest senior growth but are not now states that have a high percentage of seniors.
States with high senior percentages, including the so-called "rust belt" states in the Midwest and East, have already seen significant drops in their younger populations. This leaves behind seniors who are far less likely to move than people in their 20s and 30s, either because they cannot afford higher priced housing elsewhere or because their families are nearby and they want to stay put.
The study also shows that communities in the Tri-Valley could become the fastest graying part of the Bay Area landscape compared to San Francisco, where new condos and townhouses are appealing to those under 40.
While close to 30 percent of young households move each year to a new residence, that slides down to 4-5 percent for people in older age groups. Therefore, household mobility that has been a major driver of home sales here could fall off as boomers age.
The Bankers Association study shows that less than 2 percent of residents ages 55-64 move across state lines in any one year and the percentage is even less for those over 65. The aggregate number of interstate moves among those ages 55 and over is dwarfed by the number of moves undertaken by the younger population, meaning fewer moves as a larger portion of the population is over 55. Well-off young senior populations will emerge in areas such as Las Vegas, Denver, Dallas and Atlanta.
Also noteworthy according to the MBA analysts is that while it is popular to think of the U.S. as a melting pot, Hispanic, Asian and other minority groups are disproportionately clustered in selected areas.
What has changed is the "hold" that the traditional immigrant gateways have on the Hispanic population, according to the MBA economists. In 1990, for example, the top 10 metropolitan areas were home to fully 55 percent of all U.S. Hispanics, and the top two, Los Angeles and New York, housed nearly three in 10 Hispanics nationwide. In 2005, however, less than half of all Hispanics lived in those top 10 areas, and Los Angeles and New York are home to only 22 percent. Today, nearly one-third of all counties in the U.S. have at least 5 percent of their populations that are Hispanic, compared with one out of six in 1990.
Because the vast majority of Hispanics and Asians are also relatively young compared with the rest of the population, they are also more mobile as they look for improved and expanded housing to meet their growing income and family-growth needs. Analysts cite California as one of the states where Asians and Hispanics account for nearly one-third of the population with increasing needs for housing outside of densely crowded residential areas.