You may hear a lot about how Baby Boomers and Millennials are changing the current landscape, but Gen-Xers may be the ones shifting real estate trends in the next two decades.
That’s because modern-day Americans are expected to live longer than ever before, and thanks to technology in the health sector and beyond, they’ll likely be living at home alone for a lot longer, too.
These are just some of the forecasts from Mary O’Hara-Devereaux, a researcher who focuses on the intersection of a variety of current trends to forecast the ways of the future. She recently shared some insight on where she believes real estate trends are headed, and why, and most of them touch on technology.
Technology is Extending Life Expectancy and Ability to Live Independently
The ability to find, treat, cure and prevent illnesses—among other things—is leading to longer lifespans, and modern-day technology is to thank.
In fact, the number of people older than 65 in America is expected to approximately double—from 48 million to 88 million—by 2050, according to a U.S. Census Bureau report.
“The biggest effects we are going to see come from the fact that between now and 2030 we are going to double the size of the Senior Californians (people over 65 years old),” said O’Hara-Devereaux.
Technology will not only continue to allow people to live longer, but also to live independently longer.
“There's a lot of single, older people, and this is a big change,” said O’Hara-Devereaux. “In fact, most people over 50 years of age in California right now are single. Anytime something gets this big, it's very impactful.”
In addition to medical advancements, other technologies will pave the way for seniors to live on their own in the future.
Current tech tools, like wearable medical alert devices, grocery-delivery apps and virtual doctor visits, are already doing this. But futuristic technology, like self-driving cars, will make independent living an even more viable option for those without spouses or adverse to nursing care.
“We will see more of it in the San Francisco Bay Area, the epicenter of new technology, because the future doesn't arrive everywhere all at the same time,” said O’Hara-Devereaux. “So, you'll see things like more-autonomous vehicles here, and in a few other big metro areas in the United States, before you're going to see them in Winnemucca or Salt Lake City.”
Invest in Real Estate near Tech-Driven Cities and Healthcare Centers
Since senior-driven technology will be in big cities first, retiring in the suburbs will likely become a thing of the past. Aging Americans are going to want to live where life is easy and they can live autonomously, so they are going to stay in, or move to, a metropolitan area.
“In the past, we found that families came together and then industry was formed around them. Now, there's some gravity to already-formed industries and healthcare infrastructure,” said O’Hara-Devereaux. “California has the fastest rate of growth in the senior population out of all states.”
That’s because more Americans are already buying homes in tech-centric cities like Seattle and San Francisco, over other urban cities, to be closer to the latest innovations. O’Hara-Devereaux predicts three million more people will live in the Bay Area during the next decade.
If medical advancements are one of the keys to Americans living longer, O’Hara-Devereaux expects many independent seniors will buy real estate near hospitals, for easy access to care, and in cities known for advanced research. They will also want excellent internet connectivity. “There are great commercial real estate opportunities in two places in California, due to their concentration of healthcare and health innovation, and those are the San Francisco Bay Area and San Diego,” said O’Hara-Devereaux. “San Diego, due to the former military base presence, has lots of talent, as well as a big biotech industry. We also have a huge presence of both healthcare and bio-pharma industries in the San Francisco Bay Area.”
Since millions of people are expected to move into the already crowded San Francisco Bay Area, investing in high-density housing developments is worthy of research.
Other real estate investment opportunities may be found in large cities with commercial buildings that have the prospects of becoming research labs and outpatient treatment centers to accommodate the future surge of seniors.
“When people get old, they need more healthcare,” she said. “So you're going to see housing and transportation built near and around anything that touches high-quality healthcare. Investment will be looking for real estate that meets those requirements.”
Mark Leverette is a Partner and Real Estate Industry Group Co-leader at BPM. Contact Mark at [email protected] or call 415-288-6206.