California’s real estate landscape has been reshaped by its most powerful demographic force—the baby boomer generation. As they cruise into their retirement years, boomers aren’t simply following the expected script of downsizing and heading to Sun City. Instead, they’re wielding unprecedented home equity and financial clout to transform housing markets from San Diego to Shasta County.
Equipped with decades of appreciation in property values and often mortgage-free homes, boomers have become kingmakers in California’s competitive market, outbidding younger buyers and defying conventional wisdom about retirement living. The period from 2018 to 2023 has revealed fascinating patterns: suburban empty-nesters clinging to family homes, downsizers targeting pristine new builds in smaller communities, and others abandoning the Golden State altogether for more affordable horizons.
These decisions ripple through neighborhoods and housing policies, creating both opportunities and challenges for a state already grappling with housing shortages. Understanding how and why boomers buy, sell, or stay put in California offers a window into the future of the state’s communities and provides crucial context for anyone navigating its notoriously complex real estate market.
Overview: Boomers Remain Key Players in the Housing Market
Baby boomers – generally defined as those born 1946–1964 – have been a driving force in California’s housing trends from 2018 through 2023. During this period, boomers increasingly asserted their presence as home buyers, even overtaking younger generations in share of purchases by the early 2020s.
Nationally, boomers comprised 39% of home buyers in 2022, surpassing millennials (28%) for the first time in years. In California’s high-priced market, their equity advantage and cash reserves often gave them an edge in bidding wars, allowing many to buy homes later in life.
At the same time, boomers continued to dominate home selling activity (accounting for roughly 45–52% of home sellers) as they entered retirement and decided to relocate or downsize.
Two Divergent Trends
Overall, two divergent boomer trends emerged: a portion of boomers actively downsized or moved in retirement, while a large contingent stayed put in long-time homes. The net result was that boomers remained significant in housing transactions through 2023.
This was a notable shift from the prior decade (2008–2018), when younger buyers had been ascendant – it reflects how boomers’ strong home equity position and post-recession recovery enabled more buying and selling in late 2010s and early 2020s, whereas millennials were increasingly constrained by affordability issues.
In short, baby boomers have been critical players in California’s recent housing market, making decisions that ripple across home prices, inventory, and neighborhood dynamics.
Location Preferences: Urban, Suburban or Rural?
One prominent trend is where boomers choose to live when they move. By and large, California’s baby boomers have not been flocking to big-city urban centers; instead, they show a preference for small towns, suburbs, and even rural areas.
National REALTOR® surveys reveal that boomers (both younger and older) were more likely than other generations to buy homes in small towns, and younger boomers in particular were the most likely of any age group to purchase in rural areas.
This suggests many boomers are opting for quieter communities – whether that means charming Central Coast towns, Sierra foothill communities, or other less dense areas – rather than city high-rises. They often seek locations with a slower pace or lower cost, provided there are adequate amenities and healthcare nearby.
Staying in the Suburbs
At the same time, many boomers simply remain in the suburbs where they raised their families. In expensive California metros like Los Angeles and San Francisco, a large number of empty-nest boomers have not been relocating en masse.
In Los Angeles, for example, boomers hold a disproportionate share of single-family houses with three-plus bedrooms, and they aren’t moving out at the rate younger families might hope. A recent analysis found that in L.A., homeowners aged 58–76 with no kids at home own about 24% of all “family-sized” homes, far outnumbering millennial parents who own under 10%.
As Redfin’s chief economist noted, “because of the scarcity, it’s like if a baby boomer is occupying a home, that’s one less home that a millennial with kids could occupy.” In short, lots of California boomers are staying put in their suburban homes – leading to lower turnover of those properties – even while others migrate to smaller communities.
Downsizing vs. Staying Put: Mixed Housing Decisions
A key question for this generation has been whether to downsize in retirement or age in place. From 2018 to 2023, we saw mixed behavior on this front.
The Downsizers
Many boomers are indeed downsizing: among home sellers in 2020–2023, those aged 69–77 (older boomers) were the most likely of any age group to report moving to a smaller home. As their children moved out and maintenance of large properties became burdensome, these older Californians often sold long-held houses and opted for something with less upkeep.
In fact, “empty nest” boomers frequently cited that their previous home was simply too large for their needs, which was a top reason for selling. Popular downsizing options included single-story houses, condos, or senior living communities that better fit their new lifestyle.
About 7% of buyers over 60 chose to purchase in age-restricted retirement communities in recent years, a modest but notable share. And roughly 18% of older boomers bought multi-generational homes (housing arrangements to live with adult children or elderly parents), reflecting some consolidation of households in retirement.
The Stay-Put Generation
On the other hand, a large portion of boomers are staying in place longer than past generations did. California’s policies and market conditions often incentivize boomers not to move.
Thanks to Proposition 13, long-time homeowners enjoy ultra-low property taxes that reset higher if they buy a new home – a penalty many wish to avoid. Until recently, they also couldn’t carry over that tax basis easily to a new purchase (a limitation eased in 2021 by Prop 19, discussed below).
Many boomers also locked in record-low mortgage rates by refinancing in 2020–2021, so selling and buying a new home at 6–7% interest would sharply raise their monthly costs. These factors, combined with simple inertia and emotional attachment, mean aging in place remains common.
“The number one reason why people don’t move is just inertia,” notes USC professor Dowell Myers, adding that in California, boomers are “protected from taxes… and from having to buy a new house with a new mortgage at a higher rate. Those are all killer incentives.”
Many older Californians are also working longer and living healthier lives, so they feel less urgency to relocate for care or climate reasons. The outcome is that from 2018–2023, downsizing was happening gradually, but not a tidal wave – plenty of boomers remained in their longtime homes, even as others took the leap into a smaller residence.
Key Motivations for Boomer Housing Choices
What’s driving California’s baby boomers in their home buying (or selling) decisions? A variety of motivations have been at play during 2018–2023, often distinct from those of younger buyers.
Affordability & Cost of Living
Many boomers carefully weigh the cost of housing and overall living expenses, especially those on fixed retirement incomes. California’s high home prices and taxes have pushed some to seek more affordable areas.
For example, some retirees have relocated out of state to places like Arizona, Nevada, or Texas where housing and everyday costs are lower. One California boomer cited rising wildfire insurance premiums, utility bills, and taxes in California as making it “impossible to retire” there, prompting her move to Arizona in 2020 – a move that cut her monthly expenses by thousands.
Even within California, affordability drives decisions: many boomers leaving the Bay Area or Los Angeles have headed to lower-cost regions (e.g. the Inland Empire, Central Valley or outlying counties) to stretch their retirement dollars.
Tax Policies and Their Impact
California’s tax rules strongly influence boomer mobility. Proposition 13, passed in 1978, caps property tax increases for existing owners, which means a boomer who bought a home decades ago pays far less tax than they would on a newly purchased home of equal value.
This encourages staying put – seniors who move would lose that benefit and face a tax hike. Recognizing this lock-in effect, voters approved Proposition 19 (effective 2021) to allow homeowners 55+ to transfer their low tax basis to a new home anywhere in the state.
Prop 19 led to a surge in older Californians moving and taking their tax base with them, with such transfers in the Bay Area jumping from about 1,000 per year to 3,500 after the law changed. This reform removed one financial barrier to downsizing or relocating within California, and indeed many boomers have started utilizing it – though the overall uptake is still only a single-digit percentage of total home sales.
In short, tax considerations (either the security of Prop 13 or the new flexibility of Prop 19) have been a big factor in boomer housing choices.
Family, Lifestyle, and Health Considerations
As boomers retire, lifestyle priorities shift. A top motivation cited for boomer moves is the desire to be closer to family or friends, especially to adult children and grandchildren. Retirement often means freedom from needing to live near a job, so many choose to relocate nearer to family support networks or to communities where they already have friends.
Additionally, boomers often seek a change in lifestyle – some want a quieter environment, better weather, or a community with recreational amenities. Others downsize to reduce home maintenance so they can travel, pursue hobbies, or simply enjoy a simpler life.
Many explicitly looked for homes suitable for aging (single-story layouts, smaller yards) and in locations with good healthcare access as they plan for their later years.
Climate and Environmental Concerns
California’s changing climate has played a role in some boomer decisions. The late 2010s and early 2020s saw devastating wildfires, droughts, and extreme weather that particularly impacted certain regions.
Some boomers living in high-risk wildfire zones decided to relocate to safer areas after repeated evacuations or skyrocketing insurance costs. For instance, a number of retirees from fire-prone rural Northern California moved to other states or to coastal areas with milder conditions.
However, climate can cut both ways – many California boomers stayed because they enjoy the state’s generally mild weather. Unlike Midwestern or Northeastern retirees who might flee winter cold, Californians often already live in a desirable climate. “Florida sunshine does not beckon Southern Californians,” one observer noted of older homeowners’ reluctance to leave the Golden State for elsewhere.
Interest Rates & Housing Market Conditions
The roller-coaster mortgage rate environment of 2018–2023 also influenced boomer behavior. Historically low interest rates in 2019–2021 made buying or refinancing very attractive – some boomers moved or purchased second homes during this window to take advantage of cheap loans.
Conversely, the rapid rise in rates in 2022–2023 (toward 7%) created a “lock-in effect,” discouraging many from selling their current home (with a low fixed rate) only to buy a new one with a costly mortgage. This was frequently cited as a reason to delay downsizing.
Additionally, the pandemic-era housing boom sent California home prices to record highs by 2021, which motivated some boomers to cash out at peak values – while others hesitated to buy at high prices. Thus, market conditions – from interest rates to price surges – have continually pushed and pulled boomer buyers in different ways.
Regional Variations Across California
California is a large and diverse state, and boomer housing trends have varied by region.
Coastal Metro Areas
In the major coastal metro areas (Los Angeles, San Francisco Bay Area, San Diego), high costs and limited inventory meant many boomers stayed put. Long-time homeowners in affluent neighborhoods of L.A. or the Bay Area often decided to remain in their homes, enjoying low property taxes and watching their home values appreciate.
This contributed to tight housing supply in those metros, since fewer older owners listed their homes for sale. When boomers in the big cities did move, some chose to remain within the metro area but in a different setting – for example, selling a large suburban house and buying a smaller condo in the city’s downtown, or vice versa.
There’s also a subset of affluent urban boomers who purchased vacation homes or second homes (e.g. a beach cottage in Orange County or a wine country house in Napa) during this period, though many kept their primary residence in the city.
Suburban and Inland Regions
In suburban regions statewide, boomers are the backbone of homeownership. Suburbs from the San Fernando Valley to Silicon Valley saw relatively low churn among older residents. However, some suburban boomers did take advantage of Prop 19 after 2021 to relocate to entirely new locales.
Notably, there has been movement between regions: for instance, a boomer couple from the Bay Area might sell their expensive home and move to a more affordable suburban area in the Sacramento or San Joaquin Valley region. These intra-state migration patterns became more feasible with the new tax portability.
Data from the California Board of Equalization showed a spike in Bay Area boomers moving and bringing their tax base into places like Sonoma, Placer, and other counties that are popular for retirement (often to be closer to family or enjoy a different lifestyle). In Southern California, similar moves were seen with some L.A. and Orange County retirees relocating to places like the Inland Empire, Palm Springs area, or Central Coast, seeking lower costs or resort-like environments.
Rural Communities and Small Towns
California’s rural communities and small towns experienced a modest influx of retiree-age buyers. Regions such as the Sierra Nevada foothills, parts of the Central Valley, and the far Northern California coast can offer attractive tranquility and lower home prices.
NAR surveys confirm that a significant share of boomers bought in rural areas or small towns as opposed to cities. For example, towns in the Gold Country or around Lake Tahoe have long been magnets for California retirees.
During 2018–2023, this continued – albeit tempered by concerns like wildfire risk in some rural pockets. Resort towns (like those in the Desert Coachella Valley or along the coast) also drew boomer buyers looking for lifestyle-oriented moves.
Out-of-State Migration
Many California boomers ultimately chose to leave the state entirely, favoring places such as Arizona, Nevada, Oregon, Idaho, and Texas. Between 2018 and 2022, California saw a net outflow of residents (including a share of older adults) to other states.
Boomers formed a slice of that exodus, especially those from higher-cost coastal counties who found they could buy a nice home elsewhere for a fraction of California prices. This outmigration contributed to population dips in regions like Los Angeles County and the Bay Area in the early 2020s.
How Boomers Finance Their Home Purchases
Baby boomers have approached home financing very differently than first-time millennial buyers. Thanks to decades of home equity accumulation, many boomers can purchase new homes with large down payments or even all-cash offers.
In fact, recent surveys find that only about half of Older Boomers (ages ~68–76) who bought homes took out a mortgage at all – meaning roughly 50% paid 100% cash for their purchase.
Younger Boomers (in their late 50s to 60s) are more likely to use a mortgage, but even among those, a considerable number make hefty down payments using proceeds from the sale of a previous home. It’s common for a longtime California homeowner to sell their property (often for a high price after years of appreciation) and then reinvest those funds directly into the next home.
This means boomers often finance purchases from equity rather than debt. The median loan-to-value for boomers is much lower than for younger cohorts – one NAR study showed that while nearly all buyers under 30 needed a mortgage, only 49% of older boomers financed their home (the rest were cash), and those who did finance typically borrowed only about 70–80% of the home’s value.
Boomers also tend to favor 30-year fixed-rate mortgages when they do borrow, though some opt for 15-year loans if they want to pay it off quicker. Given their stage in life, many are cautious about taking on new debt in retirement.
The dominant pattern has been to sell high, buy smaller, and pay cash (or mostly cash). This was especially true in the frenzied 2020–2021 market – boomers’ cash offers stood out in competitive bidding situations. Their ability to pay more upfront often made them attractive buyers to sellers, even if their age meant they were technically “first-time” buyers of a retirement home.
Property Types: What Are Boomers Buying?
When boomers do buy homes in California, what kinds of properties are they choosing? The period 2018–2023 showed that while some boomers embrace new lifestyles (like condos or senior communities), most still gravitate toward traditional single-family homes – albeit often smaller or easier to maintain than their previous homes.
Single-Family Homes Remain Popular
Nationwide data confirms that a detached single-family house is still the most common type of home purchased across all generations, including boomers. Among buyers over 60, approximately 59% bought detached single-family homes in recent years.
That said, there is a clear difference between younger and older boomers: about 71% of Younger boomers (late 50s–60s) bought single-family houses, whereas a smaller 54% of Older boomers (late 60s–70s) did so. Older boomers were more likely to opt for condos, townhouses, or other alternatives than their slightly younger counterparts.
This reflects how needs evolve with age – the oldest boomers in their 70s might prefer a townhome or condo that requires less maintenance (no yard, perhaps one-level living), or even a duplex unit that provides rental income or close proximity to family.
Senior-Specific Housing
Boomers also showed interest in senior-specific housing to some extent. A small but notable share moved into age-restricted 55+ communities or developments geared toward retirees. Only around 6–7% of boomer buyers nationwide went for “senior-related housing” (which includes retirement communities), since many are healthy enough to remain in standard housing.
But those who did often cited the convenience of community amenities, social activities, and healthcare access in these retirement-oriented communities. Areas like Sun City Lincoln (Placer County) or Laguna Woods Village (Orange County) – large retirement communities in California – continued to be popular boomer destinations for those seeking an all-in-one lifestyle.
New Construction Appeal
Another trend is new construction: some boomers took the opportunity to buy brand-new homes. Older Boomers actually had the highest likelihood of purchasing new construction among recent buyers – many chose a newly built home (often single-story) to avoid the hassles of an older property.
On average, older boomers bought homes built in the mid-1990s or later, making them the group that bought the newest homes among all generations. This indicates a preference for modern features and turnkey condition, likely because they don’t want to undertake major renovations in retirement.
Size and Features
In terms of size and features, boomers generally downsized in square footage and number of rooms, but not always drastically. For example, a boomer might move from a 5-bedroom, 3,000 sq. ft. house to a 3-bedroom, 1,800 sq. ft. house – shedding excess space but still retaining comfort and room for visitors.
Accessibility features gained importance: single-floor layouts, homes with no stairs, wider doorways, etc., became more attractive especially to older boomers planning ahead for aging. Many also looked for homes with amenities such as a home office (some boomers still working or consulting), space for hobbies, or a nice yard/garden (for those who enjoy outdoor leisure but perhaps a smaller yard than before).
Multi-Generational Homes
Notably, a subset of boomers purchased multi-generational homes. These might be large single-family homes with enough room for adult children or elderly parents to live under one roof, or homes with ADUs (accessory dwelling units).
California relaxed ADU laws in recent years, and some boomers took advantage by either buying homes with existing ADUs or planning to add one – for instance, an older couple might live in the ADU while their children’s family lives in the main house, achieving a form of downsizing without leaving the property. Such creative arrangements became more common in expensive markets like L.A., where families sought to “spread their wealth” and housing space across generations.
Comparing 2018–2023 to the Prior Decade
The housing behaviors of baby boomers from 2018 to 2023 in California represent an evolution from the prior decade’s trends. Compared to 2008–2018, there have been notable shifts in how boomers approach homeownership:
From Recovery to Resurgence
The 2008–2018 period began amidst the housing crash and Great Recession. Early on, many boomers were stuck in place – some had lost home equity in the crash or delayed retirement due to financial setbacks.
By 2018–2023, circumstances had changed dramatically. Home values had not only recovered but reached new highs, restoring boomers’ equity and enabling a resurgence of moves.
In the 2010s, boomers’ homeownership retention rates actually increased – boomers did not exit homeownership as earlier feared, and very few gave up their homes during the recession. As the economy improved, those who held on found themselves sitting on significant appreciated assets. This set the stage for more boomers to sell and buy homes in late 2010s and early 2020s.
Delayed Downsizing
A decade ago, pundits were predicting a massive wave of boomer downsizing by the mid-2010s, dubbing it the coming “silver tsunami” of housing turnover. That wave did not fully materialize in 2008–2018 – and even by 2018–2023 it was more of a slow tide than a tsunami.
Boomers have been exiting homeownership more gradually than expected. The increase in life expectancy and desire to age in place kept many in their homes through the 2010s. It’s only as we approached the 2020s that a larger cohort of boomers finally reached their 70s and started making moves.
Even then, the transition has been measured. Freddie Mac analysts in 2024 noted that while a surge of boomer home sales is coming as the generation ages into their 80s, the effect so far has been steady and largely offset by younger buyers filling in behind – not a market-crashing flood of listings.
The big difference from the prior decade is that by 2018–2023, more boomers have reached the stage of selling long-held homes, whereas 2008–2018 was more about holding onto them.
In 2008–2018, particularly by the mid-2010s, millennials became the largest group of home buyers as they entered their 30s. Boomers’ share of home purchases had been declining relative to those younger buyers during that time.
However, in the 2018–2023 window, we saw a reversal – boomers reclaimed a larger share of purchases. This was partly because millennials faced new affordability challenges (rapid price increases, stricter credit, etc.), slowing their buying, while boomers were freed by retirement and empowered by equity to buy homes again.
By 2022, boomers outpaced millennials in home-buying activity, something not seen in the prior decade. Essentially, boomers stayed active in the market longer than expected. The previous assumption was that by late 2010s, boomers would be mostly selling and exiting; instead, they were both selling and buying in large numbers, leveraging their advantages.
Policy and Economic Changes
The 2018–2023 period introduced Prop 19 (from 2021 onward), which is a policy shift enabling more boomer mobility. Already by 2022–2023 there’s evidence that this boosted senior moves (e.g., a 3.5× jump in tax-base transfers in the Bay Area). The prior decade had no such catalyst.
Additionally, the COVID-19 pandemic in 2020 was a unique event in this latter period. It prompted a wave of early retirements – Pew Research found a surge in boomers retiring in 2020–2021 above trend – which in turn affected housing (some decided to move closer to family or seek different homes once retired).
The pandemic also made remote work possible, so a boomer still working could relocate and work from home in a new community. None of these pandemic-related effects were present in 2008–2018.
In conclusion, compared to 2008–2018, the period from 2018 to 2023 for California’s baby boomers was marked by greater market engagement (both buying and selling), higher mobility thanks to recovered equity and policy changes, but also a continued trend of aging in place for many.
Boomers have become, if anything, more influential in the housing market in recent years than they were a decade ago – a somewhat unexpected development that has been driven by economic recovery and the sheer size of the generation reaching retirement.
As we move beyond 2023, all boomers will be over 60, and their housing decisions in California (whether to finally sell, to stay, or to move out) will continue to significantly shape the state’s real estate landscape.
References
- 2023 Home Buyers and Sellers Generational Trends Report – National Association of REALTORS®
- Young parents need bigger homes, but older Angelenos aren’t moving – LAist
- A baby boomer is saving over $1,700 a month on bills after moving from California to a ‘Hallmark’ Arizona town – Business Insider
- Empty Nesters Own Twice As Many Large Homes As Millennials With Kids – Redfin News
- Here’s how many Bay Area homeowners are using Prop 19 to pay lower property taxes – San Francisco Chronicle
- The Coming Exodus of Older Homeowners – Fannie Mae Housing Insights
- Economic, Housing, and Mortgage Outlook Feb 2024: Aging Boomers’ Housing Impact – Freddie Mac
