In the second quarter of 2019, 78% of Americans ages 65 and older owned homes in the U.S., but the housing market is about to shift in a radical way thanks to a “silver tsunami.”

That “tsunami” is about to hit the American housing market and flood it with a deluge of homes for sale.

According to real estate company Zillow, between 2007 and 2017, nearly 730,000 homes were put on the market by older Americans each year.

That is expected to grow to 920,000 homes each year between 2017 and 2027, and 1.17 million between 2027 and 2037.

It means the housing market could see years of inventory shortage ending, but it could also put pressure on home prices.

What is the ‘Silver Tsunami?’

This particular “silver tsunami” refers to the massive baby boomer generation that is aging into retirement.

There is a bit of a conflict with the numbers.

On one hand, you will have an increasing number of these older Americans deciding to age in place — meaning they won’t seek out a nursing home or assisted living facility.

Then you have those who will.

The prevailing trend is that more retirees will downsize and seek out those assisted living facilities than those who won’t. That’s despite the fact that nursing homes are expensive and, in some cases, poorly run.

Noted economist Harry Dent agrees.

“Overall, I clearly see the nursing home trend flooding the property market with Boomer homes for sale,” Dent said. “That’s what my “dyers versus buyers” indicator has said would occur in line with this trend into around 2040.”

The Impact on the Housing Market

New home construction has already started to fall off, thanks to the impacts of the coronavirus pandemic.

The U.S. Census Bureau reported that, between February 2020 and March 2020, new housing construction permits dropped by 6.8%.

That indicates a big drop in the U.S. housing market. And a continued decrease in home supply.

But if the trends hold, expect more houses on the market, bringing prices down once the COVID-19 panic is over.

That could be very good news for another generation looking to buy homes.

“Don’t believe this housing shortage will continue, especially with the ‘great reset’ in consumer and asset prices just ahead from 2020 into 2023 or so. It will reverse and rapidly,” Dent said. “Lower prices and Boomers moving rapidly into nursing homes will make home-buying more affordable again and raise ownership for Millennials.”

Not All Housing Markets Will Feel the Change

According to Zillow, the rapid burst of homes on the market won’t happen everywhere.

“While virtually all areas will feel the effects to some degree, this wave won’t hit all at once and won’t strike all markets equally,” the report said. “Certain markets will be more impacted than others, as will certain kinds of areas within a given market.”

Maricopa County, Arizona, will see 62.6% of its homes currently owned by older Americans released back to the market by 2037. The Orlando area of Florida will have 62.5% of its homes released.

Palm Beach County, Florida, could see as many as 56.5% of its homes owned by older Americans released by 2037.

On the other end of the list, San Francisco County, California, will only have 10% of its homes back on the market while Salt Lake County, Utah, will have just 7.8%.

So, as older Americans start to drift toward assisted care and independent living facilities, expect to see a big boom in the U.S. housing market.