Older Californians are growing in number, at 16.5% of the state’s population in 2024. Further, the number of Californians 65 years of age and older increased 3.2% in 2024 alone.

Roughly three out of four Baby Boomers in the west, aged 65 and up, are homeowners today and will remain so in retirement. Most will sell and downsize, purchasing a replacement home of equal or lesser price. Many are expected to relocate from the suburbs to more convenient city-living.

Among potential first-time homebuyers in the region aged 25-34, approximately 34% own a home, down from 43% in predatory mortgage days of 2006. While the population of 25-34-year-olds is growing slightly each year, expect the recent drop in their rate of homeownership to continue through 2028. Presently, they are slowly mustering savings for down payments in spite of education debt and grappling with the financial fallout from the recession – job loss and rent increases – which set in during 2022.

Updated October 6, 2025. 

Chart update 10/2/25

Chart update 10/2/25

2024
20232022
CA Population Aged 65+
6,521,900
6,318,800
6,134,200
CA Population Aged 25-34
5,716,100
5,738,900
5,781,500

The two charts above track homeownership by age in the western census region and California’s population of citizens aged 65 and over, respectively. In combination, these two charts tell us about the future direction of real estate ownership and sales transactions among the rapidly growing population of California’s senior citizens.

Retirees move real estate

At about the age of 65, most Californians stop working full time and begin consuming the benefits of social security, Medicare and their years of saving. The decision to retire is often swiftly followed by a series of lifestyle changes as retirees take advantage of their newly found liberty and accumulated financial power.

One of the most significant changes is the sale of the retiree’s current home, typically large for a family now mostly gone, and the corresponding move to a new, more compact and centrally located residence. The relocation will most likely be for a better year-round climate or closer proximity to family.

Where the grandkids are will be where the grandparents move. As California’s population continues to age, senior citizens will exert increasing influence over both the housing market and every other aspect of the California economy.

California citizens aged 65-75 are more likely to own property than any other age group, as displayed on the first of the above charts. The accumulated equity in their homes, combined with their savings from a lifetime’s employment, allows them to exert a disproportionately strong influence on the statewide housing market. When these elderly citizens begin to change their spending and living habits in retirement, they create new opportunities for agents who deal in the market of single family residential (SFRs) sales.

The massive Baby Boomer generation is defined by the U.S. Census Bureau as the generation born between 1946 and 1964 and is second largest in California to Millennials (1981-1996). While the chart above tracks younger Californians aged 25-34 as the typical first-time homebuyer, this age range has not attained prior homeownership levels after the 2008 housing crash brought on by permissive predatory mortgage debt.

As Boomers are now 62 to 80 years of age in 2025 and mostly retired (a process well underway with almost all on social security benefits), every aspect of the state’s economy is changing. The Boomers have spent the last 40 years accumulating their wealth (primarily in the form of stock – not cash) and generally living in large, suburban SFRs but not all are clear of mortgage debt.

Although the 2008 Great Recession wiped out some of their savings and put hundreds of thousands of SFRs on the market (or in foreclosure) before their time, the majority of the Boomers are making housing adjustments. With retirement, “dis-saving” is the collective act now practiced by Boomers.

They start to liquidate their stocks, sell their current homes and embark, unfettered, on the advanced stage of their lives. Others will stay with the home they own, encumbered with a reverse mortgage to extract a monthly income from its equity, the ATM effect at a significant cost.

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History repeats the hardships of the Boomer generation

The impending increase in suburban SFR home sales among senior citizens will keep housing prices in outlying bedroom communities depressed, limiting the gain Boomers take on a sale. This is a story of supply and demand economics that their generation knows all too well.

Some history: The Boomer wave began renting apartments simultaneously in the early 1980s, driving up rents which led to massive overbuilding of apartments. It took more than a decade for the market to digest the foreclosure and disposal of the inventory via the Resolution Trust. A similar problem rippled into SFR overbuilding going into the 1990s due to the same Boomer pipeline congestion. This Boomer pile on in homeownership also ended badly with house prices bursting when hit with the 1990 recession.

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In the late 1990s the Boomers began to invest their accumulating wealth in the stock market, which contributed greatly to a stock pricing bubble. The ensuing collapse wiped out much of their wealth stored in stock. Further, the current mid-2020s real estate recession has blatant overtones of the 2008 Great Recession.

Soon the Boomers will begin to sell off a considerable amount of the stock they still retain, and with a bit of luck sell before the current AI tech bubble bursts. Pulling needed cash by liquidating assets will continue with a vengeance for the next 15 years and kill any interesting movement in the stock market.

The price reduction of large suburban SFRs will result as Boomers sell their home during the buyer’s market now developing in the mid-2020s. Thus, suburban home prices are likely to return to their historical mean price trendline during this mid-2020s recession.

The ensuing market-wide price adjustment will undermine the Boomer population’s buying power with a contrary rise in the value of desirable replacement homes they collectively seek in urban centers. While no one can predict with certainty which properties will be involved or just where they will be in this Boomer relocation, historical and current trends give us some hints.

Relocation: where will they go?

Homeowners in California tend to remain in homeownership in retirement, as shown by the first chart above. For agents dealing in SFR transactions, they will experience a relocation event from most Boomers they represent to sell a home. The client’s relocation is a further service agents can offer for a fee under a buyer representation agreement. Moreover, the percentage of citizens owning homes over the age of 75 has remained steady since 2006, while 25-34-year-old’s homeownership rate dropped by 1/4th.

Homeownership is a well-entrenched habit among the Boomer generation, a fact not likely to change with increased age. However, this does not mean homeowners who retire remain stationary, except for those who choose to remain in the family home due to nearby family members and reverse mortgage income arrangements.

Many will relocate to a better climate or a home closer to other family members. With their accumulated savings and home equity, most will have the resources to do so with ease.

To complicate Boomer relocation to city centers, the better educated and more mobile younger generation is migrating with increasing frequency to the cities. There, employment of skilled workers with better pay is more plentiful than in rural areas.

Ironically, their boomer parents are simultaneously attracted to the same urban areas by the increased access to public transportation, the proximity to cultural and artistic institutions and, of primary importance, the closeness of their children and grandchildren.

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As retirees relocate, the most directly affected housing developments are those catering specifically to the needs of senior citizens. California law exempts seniors-only housing developments from ordinary restrictions on age discrimination. As the demand for senior housing increases, more developers and landlords will take advantage of this exemption. The range in pricing of high-density (high-rise) housing will also work to separate the wealthier retirees from the less wealthy younger generation.

Additional improvements to existing SFRs to accommodate family members as tenants is another phenomenon now fast evolving. Most SFR-improved parcels are now rezoned for the buildout of two-to-four-unit residential construction. California legislation has paved the way for the higher and better use of SFR zoned parcels allowing fill-in construction of more housing on each parcel.

Accessory dwelling units (ADUs) have also prompted a series of legislative changes to smooth the way for these additional casitas or granny flats; attached, freestanding or over-the-garage apartments with no direct access to the main house. A steady stream of Assembly and Senate Bills since 2016 have worked to remove local NIMBY interference with building more homes, loosen zoning laws and even allowed ADUs to be sold separately from the original SFR on a parcel of real estate.

These smaller residences are a tool in solving California’s inventory shortage and offer homeowners rental income and flexibility. Whether homeowners are looking to build for themselves or seeing the added value in purchasing a home with an ADU, these create more options for Boomers looking to downsize. Increased living density and efficiency are especially important in California’s desirable cities.

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Retirees influence California real estate

As retirees begin to relocate, opportunities will arise for real estate brokers and their agents to assist them in their transition. Farsighted hometown brokers will prepare for this migration now, offering relocation services to Boomers who sell and seek out a replacement property.

Many retirees have historically chosen to leave California for states with a lower cost of living and a more relaxed, “retirement-friendly” reputation. Foremost among these retirement states are Florida, Texas and Arizona. Those with lower retirement pensions may relocate to Mexico.

Agents need to offer their services to those relocating, not just limit services to representing them as sellers. They need to take the opportunity to review the seller’s preferences for a community for relocating and acquiring a replacement home. MLS inventory in the destination community is available instantly to the agent. Understanding the client’s needs for future housing leads to a discussion about the agent representing the seller of a home as a homebuyer in the new community.

Have the seller-client, now turned homebuyer, enter into a buyer representation agreement just like the client did for the agent to represent them marketing and selling their current home. [See RPI Form 103.1] Thus, as services rendered in California for an out-of-state property, the agent’s broker protects their fee when the buyer enters into a written representation agreement.

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