Will this ultimately cause property prices to fall?

Some experts believe we are facing a “silver tsunami” in the real estate market.

“The ‘silver tsunami’ is the idea that baby boomers will soon be selling their homes en masse,” said Jenna Stauffer, broker and global real estate advisor at Sotheby’s International Realty. “Although this has been expected for some time, I think it will be a gradual flood rather than a sudden wave with homes becoming available over a longer period of time.”

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Stauffer noted that many baby boomers are in no rush to leave their homes.

“Many boomers are stuck with mortgages with interest rates as low as 2% to 3%, something they’ve never seen before,” she said. “This low interest rate reduces their incentive to sell, so it is likely that many will hold on to their homes for as long as possible.”

However, if they sell their homes, this will increase supply for younger generations – but will this also cause property prices to fall?

Aging Boomers and the Real Estate Market

Stauffer assumes that the additional supply caused by the “silver tsunami” will be offset by increased demand from younger generations and therefore will not have a drastic impact on prices.

“Even if they increase inventory gradually, the slow pace should allow millennial and Gen Z demand to keep up,” she said. “The US real estate market is currently facing a shortage, but there is also a lot of pent-up demand.

“In recent years, affordability issues have prevented many Millennials and Gen Z buyers from entering the market, impacting the ‘move-up’ segment,” Stauffer continued. “But as market cycles progress, these younger buyers are expected to meet demand while baby boomers gradually sell.”

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Because she expects baby boomers to sell their homes in waves rather than a “tsunami,” she doesn’t think that will be the deciding factor in making it a buyer’s market.

“The real estate market is slow and cyclical. While the silver tsunami may impact inventories over time, steady demand from younger buyers will likely offset this,” Stauffer said.

Some property prices could rise

As baby boomers age and move out of their current homes, they may look for smaller, turnkey homes, especially in places with thriving senior communities. This increased demand for certain properties could actually lead to higher property prices.

“Any time demand exceeds supply, upward pressure on prices is almost guaranteed,” Stauffer said. “If builders can’t keep up, we’ll likely see rising prices for the types of homes boomers want – smaller, turnkey properties that are accessible, low-maintenance, and located in safe, attractive communities that enable easy living. This demand could particularly impact prices in warmer climates or popular retirement destinations.”

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This article originally appeared on GOBankingRates.com: Boomers Abandoning Homes as They Age: Will This Ultimately Cause Home Prices to Drop?