The impact of the sub prime lending spree, mortgage meltdown and subsequent home price decline has been well documented. During this process the housing spotlight has focused on those losing their homes to foreclosure, first time homebuyers taking advantage of low price levels and investors seeking discount opportunities.

One group left out of the spotlight, but deeply affected by the devalued home market, is the Baby Boom generation, defined by sociologists as those Americans born between 1946 and 1964. They now make up 28 percent of our entire population.

It is not surprising that this group would be left on the sidelines. The Boomers, typically long-term homeowners with built-up equity, were unlikely to have obtained a sub-prime loan or tapped their hard-earned equity.

Some turned their home into an ATM with excessive home equity lines and added mortgage debt. However, the majority of the baby boomers stood by, as if glued to a television screen, watching the explosive rise of their home equity during the real estate boom only to see that same equity erode during the subsequent bust.

In many ways, non-participants, the Boomers experienced the rise and fall of their home value as one might experience the rise and fall of stock; in essence, a hold without having bought or sold during the process. 

The baby boomers may not have participated in the rise and fall of the housing market but they have participated in the rise and fall of dreams and subsequent realities that the market has created. The cornerpost of the retirement plan for many homeowners over 55 has long been the paid off mortgage and accumulated equity of their personal residence.

The National Association of Home Builders and the MetLife Mature Marketing Institute released a combined study of this post-55 group this year. One statistic drawn from the 2001 to 2007 trend analysis shows that           69 percent of the study group would be using the equity from their current home to make their senior home purchase. With drops in equity (price of home with no loan) of 25 to 40 percent over the past few years it will be necessary for elder homebuyers to seek another source for purchasing a retirement or to meet living expenses.

On the brighter side, this may be the perfect timing for some Boomer homeowners to buy in the retirement location of their choice and defer the sale of their current home to an improved market several years out.

The new economy has left even the most prudent baby boomers unsure if they have enough money to live out their lives in comfort. The study reveals that 88 percent of those participating owned one or more homes and 66 percent of the group occupied a single family detached home. Each of these homeowners is reevaluating their economic future and the largest factor is the value and use of their current residence.

A summary statement from the referenced report states, “Baby boomers want suburban, single-story homes loaded with amenities such as high-speed Internet, larger medicine cabinets and emergency call buttons”. A better question in the new economy may well be not what Boomers want, but what they can afford.

Charles Bogue is a Real Estate Broker in Napa. He can be reached at 707-486-5511 or e-mail: cbnapa@napanet.net