Home listings drop, as baby boomers stay in houses longer

For Patricia Papanek, her two-story 3,500-square foot Tudor in West Los Angeles is the perfect place to entertain, decorate and garden.

The 63-year-old marketing professional says she's "never" selling — and other baby boomers feel the same.

"I can’t think of one friend who has talked about either downsizing or selling their home when they retire," Papanek said.

But realtors say the decision to stay longer in their homes is having a major impact on the entire housing market. Home listings are down three percent from this time last year, according to the California Association of Realtors. Lower housing turnover means less supply, which is driving up sale prices.

More than 70 percent of Californians over the age of 55 haven’t moved since 2000, said Jordan Levine, an economist with C.A.R. He said more than half of people in that age bracket haven't moved in 25 years.

Levine said the trend toward longer home tenures by the baby boomer generation is exacerbating Southern California's larger housing shortage problem because boomers constitute a large share of the overall population.

"So you end up with a more significant hit to the amount of available supply," Levine said.

Levine said California boomers have more incentive to stay in their homes than people their age in other states because of Proposition 13, which caps property taxes.

That has led to a lower rate of homes turning over in California than the rest of the country — 4.2 percent compared to 4.8 percent over the past decade, Levine said. 

Papanek says she knows that if she downsizes, she won't be able to find a place as good as the one she has now.

"My mortgage is probably the same as some really nice apartment close by," Papanek said. "I couldn't afford to buy my home right now."

She said that boomers don't need to move because they are healthier and more active than their parents. But she said she does worry for her college-aged kids. She expects when they want to buy a home, they won't be able to live near her.

Policymakers have tried to encourage housing turnover by the passage of Proposition 90 which allows inter-county transfers of property tax values for homeowners 55 or older. But Levine said just about 10 of California's 58 counties are participating.

This story has been updated.