In a market badly out of kilter, many older residents are stuck in their homes

Some say smaller dwellings in the state are too scarce and costly

Joe Galli is a 60-year-old empty nester living alone in a four-bedroom Colonial in Shrewsbury. “I want to downsize but it doesn’t make economic sense,” he said.Jonathan Wiggs/Globe Staff

They bought their homes when they were young, making money, and raising families. Now they’re empty nesters, in or nearing retirement, and living in houses that are too big for them.

But many older residents in Massachusetts who’d like to downsize — and turn over spacious dwellings to younger buyers desperate for room to expand —are finding it difficult, if not impossible. Even though their property values have ballooned, smaller homes or condos are scarce and carry prohibitive price tags in the state’s out-of-kilter real estate market.

“We’re just sitting tight right now,” said Mary Prosnitz, 66, of Wellesley. She and her 69-year-old husband, Jay, raised two sons, now grown, in the five-bedroom home they purchased 38 years ago and still live in.

A move that would let her stay in the town she’s familiar with — an aim of many downsizing suburbanites — seems impractical, Prosnitz said, because “there’s no ranch houses for seniors.” That, in turn, creates a logjam that means “no starter homes for young families,” she lamented.

“Everybody’s stuck” would be an apt descriptor of a market where the very properties both older and younger residents most want are in short supply, sending prices skyward. In June, the median sales price for a home in Greater Boston climbed to $900,000. House hunters now must earn at least $181,000 a year to afford a typical home, according a June report by Harvard University’s Joint Center for Housing Studies.

“It’s a circular stuck-ness that’s hard on everyone,” said Newton City Councilor Andrea Kelley, 69, a landscape architect who sold her five-bedroom house five years ago, but, unable to find a smaller one, remains with her husband on the first floor of a two-family rental home. “None of our kids would be able to afford a home in Newton today.”

Politicians and community leaders have long fretted about the soaring prices and undersupply of housing. But peel back the economic metrics, and you’ll find a demographic dynamic at play: Older folks hanging onto homes that are larger than they need, and a younger generation of two-income couples with children who are primed to move into those homes but remain trapped in apartments or condos that are too small.

Of the state’s occupied homes, 54.8 percent are owned by residents ages 55 and over, according to a US census data analysis by the Massachusetts Housing Partnership. That over-55 contingent represents just over 22 percent of the state’s population. The percentage of older homeowners is higher in some suburban towns, such as Lincoln (65.7 percent) and Scituate (65.8 percent), and in communities on Cape Cod such as Falmouth (74.9 percent) and Chatham (81.6 percent).

Many older and younger residents are looking for homes that would be a better fit for their next stage of life. But much of the new construction in Massachusetts, which real estate agents say many older buyers prefer because it saves them time and money on maintenance, centers around pricey retirement communities and luxury condo complexes for young professionals drawing whopping salaries.

“We’re just not building enough affordable housing,” said Melvin Vieira, a Jamaica Plain real estate broker who is president of the Greater Boston Association of Realtors. “The last time this country built a lot of smaller homes for the middle class was when the soldiers were coming back from World War II. Now we’re building for the ultra-rich, for people who can afford to live in the Seaport.”

That creates a grim economic calculus for older folks who’d like to downsize, especially baby boomers who say they’re not ready to move into senior living communities — and may never be. In much of the state, buying a smaller home on a smaller lot, with fewer rooms and square feet, can cost nearly as much as they’d clear selling their current homes.

“I want to downsize but it doesn’t make economic sense,” said Joe Galli, 60, a divorced finance controller who lives by himself in a four-bedroom home in Shrewsbury and plans to retire in the next couple of years. “You can’t find a smaller home that’s less expensive than what you’ve got. Developers build big so they can get more money for it.”

Retired elementary school teacher Bill Andrews, 58, has grown so tired of looking at high-priced houses in his hometown of Upton that he’s now searching for land where he can build the house he wants. “I’m at the point where I’d even buy a gut job, something I’d tear down and rebuild,” he said. “But there’s no land available either.”

Some real estate watchers say the outlook for buyers could improve as rising mortgage rates and a weaker economy dampen demand. So far, though, that’s barely slowed the house hunting frenzy. While sales of homes and condos declined in June from a year earlier, the number of new listings shrank 2 percent for homes and 15 percent for condos, according to data from the Greater Boston realtors association.

“Certainly interest rates kicked some buyers out,” said Canton-based broker David McCarthy, the president-elect of the Massachusetts Association of Realtors. “But that just means you can make a decision on a home now without having to do it in three minutes” because of competition between buyers bidding over asking prices.

Multiple factors have aggravated the housing conundrum. The COVID-19 pandemic, disrupting the supply of building materials, has stalled many construction projects. Hiring sprees at high-flying biotechs, such as Moderna, have heightened demand for homes. Savvy real estate investors specializing in “fixes and flips” often elbow out downsizing empty nesters and young families, driving up prices. And many local zoning regulations favor single-family homes while restricting development of homes on smaller lots, especially in suburban communities.

Prosnitz is part of a local group called Building a Better Wellesley that advocates for zoning changes to allow single-family homes to add auxiliary dwelling units with their own kitchens and bathrooms, creating another option for downsizing seniors or their adult children. Other suburbs, such as Newton and Arlington, have approved such plans.

“We need to find ways for more young families to be able to move to these communities, but it doesn’t seem feasible right now,” she said.

Despite the hurdles, some older residents have made the move, often to towns farther from Boston or closer to where their children and grandchildren live. But it’s seldom an easy transition.

Michele McQuillen, 63, said she and her husband, who still works as a doctor at Lahey Clinic in Burlington, sold their four-bedroom Colonial home in Needham in May. They’d lived there 29 years and raised three daughters. After moving temporarily into an Airbnb, they purchased a condo in Ipswich, close to the home of one their daughters.

McQuillen said the process of packing up their house, going through belongings, finding a new place, and waiting to close was a “nightmare,” though she’s happy with the outcome. “It doesn’t happen overnight,” she said. “I can see how most people can’t envision doing this.”