What gets people to move? That is a question every real estate professional can answer to some degree. The big picture usually includes the five Ds (divorce, death, diapers, diamonds and diplomas), which are life circumstances that (often) necessitate a home sale and/or purchase—what economists have called non-discretionary moves.
But as affordability and mortgage lock-ins have suppressed a significant portion of discretionary transactions, what trends or circumstances might drive people to move into—or away from—your market?
Enter the “baby chasers.”
According to a new report from homebuilder-focused news and data company NewHomeSource, so-called “cross-generational migration” is driving an outsized number of grandparents to pick up and move to certain metros, in order to live closer to their children and grandchildren.
“Our data shows 80% of Baby Boomers are content enough in their current home,” NewHomeSource Chief Economist Ali Wolf tells RISMedia. “And so they need to say, ‘What would be the catalyst for me to move?’”
The report ranked Raleigh, North Carolina, as the top market for “baby chasers,” moving up two spots from previous rankings. Nashville, Tennessee, came in second (after not being ranked last year), followed by two of the largest cities in Texas (Dallas and Houston), with Charlotte, North Carolina, rounding out the top five.
While real estate professionals are likely well aware of the dynamics that cause younger people to move, the more discretionary choice by aging parents to follow along is a wrinkle that many brokers and agents might not be thinking about.
The report looks at population growth in those two different age cohorts (ages 25-44 and ages 60-79), with Wolf saying that anecdotally, it appears younger people are moving from expensive coastal markets to specific, affordable, job-rich towns—and increasingly inspiring their parents to follow them.
What exactly is facilitating those moves, though, and how long will the trend last?
“We know that 11,000 (Baby Boomers) are retiring every single day,” says Wolf. “If the peak (of the trend) is going to last a handful of years, we’re probably in the middle of that peak, but we don’t think this is exclusive to the Baby Boomers.”
Taking the plunge
For agents and brokers wondering whether their markets might benefit from “baby-chasing,” or how to read the signals, Wolf says there are a few commonalities in the markets NewHomeSource identified—almost entirely in the Midwest and South, and including generally “hot” markets like Nashville and Atlanta, Georgia.
“I think one of the big things is established healthcare systems or good healthcare systems. That’s an important factor…if my kids are going to Dallas, am I going to lose access to good healthcare?” she asks.
A more foundational factor is strong job markets, according to Wolf—the “baby chasers” only have a reason to chase if their children and grandchildren are making a pretty big move geographically, which usually happens when the younger folks find a good job.
Another consideration is age-restricted living, according to Wolf. While many boomers don’t end up choosing this type of housing, having the option is comforting and can facilitate the confidence needed to pick up and move later in life, Wolf explains.
“If you’re moving to Raleigh and you’re not from Raleigh, yeah, you’re going to move to be close to your grandbaby or close to your children, but you also want to know—how am I going to meet new friends again?” she says.
As far as timing, usually in these scenarios the younger family moves first, often renting on a short-term basis to get a handle on their new city and amenities. When grandparents decide to follow varies—Wolf says anywhere from six to 18 months. They often buy right away, and have different priorities for their home.
Notably, Wolf says builders are willing to go the extra mile to help bring in buyers from further away—not just targeting the baby chasers, but with incentives that are definitely attractive to them.
“I would say this is more exclusive to high-end builders—(they) will pay for your flight to come out and tour (a) community,” she says. “You won’t find that at all times of the cycle. Obviously it’s just a slower housing market right now.”
One of the important findings in the report is one state’s absence—Florida, which Wolf says highlights how affordability is still a market-driving factor for almost any housing decision, after Orlando was last year’s No. 1 baby chaser market.
“Florida has consistently been on the list and I think it’s just the higher property taxes, higher insurance costs, affordable alternatives nearby,” she explains. “It’s not to say Florida’s dead by any means. It’s just not attracting as many newcomers as we saw during the pandemic years.”
The right build
Agents who want to help baby chasers also need to understand the specific housing needs. While the younger cohort are tied to a city-center location for their job (usually), the grandparents have different needs and a different kind of flexibility.
“We’re finding that the square footage is heading down as they sell their bigger home and they’re also looking for lower maintenance,” Wolf says.
Often, they are able to purchase in neighborhoods that are typically less desirable, she adds, because certain amenities—good schools, nightlife or employment centers—are not relevant to them anymore.
The boomers’ main priority is an accessible house (single story, preferably) located close enough to the children and grandchildren, according to Wolf. They are often getting better deals on homes that are passed over by other buyers because of those priorities, but are rarely interested in older housing or anything that isn’t move-in ready.
“It’d be nicer to have low maintenance, but I think for the Baby Boomers, they’re more, ‘Been there, done that.’ For the younger generation, they’re like, ‘I got to take what I can get,’” says Wolf.
Besides a chance for agents to prospect or market to baby chasers, maybe the biggest takeaway from the report is that the metros highlighted in the report are generally thriving amid larger housing market headwinds. Catering to both older and younger buyers might be a big part of what drives housing interest, even as Wolf says the baby chaser dynamic is expected to outlast boomers and millennials.
“We do think that it will continue to be a trend, when you think about Gen X as well, but Gen X is just smaller by sheer size,” she says. “(We are) probably a few years out from peak baby chasing, but we don’t think the trend goes away.”
