New Survey Reveals Housing Wants of 45+ Age Group
The following is based upon Margart Wylde's book, “Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available from BuilderBooks.com.
The 45+ age group is not monolithic. The group differs by generation, income, the homes and communities they want and the price they are willing to pay.
People in this age group are single, married, first-time home buyers, second-home buyers, working, retired, gardeners and golfers.
Many are beginning to start families. Others are rediscovering single life again after 60 years of marriage. Some are just reaching their stride in their careers. Still others are embarking on new careers.
And, many simply are retiring and ending paid employment altogether. Some retirees have taken up globetrotting, others are immersing themselves in civic duties and still others are taking on familial roles.
All these factors — stage of life, interests and passions — are determining when, where and what type of home and community these buyers want, or whether or not they will move at all.
Life Stage Influences Buyer Behavior
Admittedly, housing choices and preferences differ among age groups, but these differences are not as much a function of age as they are a result of a particular life stage — obligation, transition or discretion.
Obligation Stage: During the obligation stage of life, work and family are the two primary drivers.
These two demands govern daily schedules. Decisions about where to live revolve around being close to work, providing a high-quality living environment, having access to good schools and, if possible, living close to other family members who can share responsibilities.
So, obligation stagers may not even consider moving until after children have left home for college, until responsibilities to elderly parents have been fulfilled or until they change jobs.
Transition Stage: The transition stage may last a few months or several years. The time involved is dependent upon what type of transition individuals are undergoing.
Major transitions can include: leaving or planning to leave employment; having children leave home (or, perhaps, return home); becoming single again because of a divorce or the death of a spouse; caring for or experiencing the death of a parent or both parents.
People in transition often are in the throes of making decisions about where they want to live and what they want to do as a result of this change in their daily lives.
Discretion Stage: Those in the discretion stage have moved beyond the obligation stage and have more freedom, flexibility and choice in how they spend their time and what they do with their lives.
Some discretion stagers are adamant about doing what they want to do and when they want to do it. Others may have traded a life of paid employment and care for children for one full of voluntary commitments to churches, causes and grandchildren.
Despite their full calendars, however, those in the discretion stage usually have greater control over what they do and when than their counterparts in the other two stages.
Many heads of households in this group who have retired may be living on retirement savings and Social Security. However, although their incomes may be lower, their homes have appreciated significantly and they also may have investment assets in other real estate and retirement accounts.
Income Alone Does Not Predict Movers
As a rule, as income increases, so does the proportion of people who will move to a new home.
Studies have found that only about 23% of respondents with incomes of less than $30,000 are likely to move in the future, compared with 37% of households with $100,000 or more in annual household income.
Still, household income by itself is not necessarily a predictor of whether or not that household will move in the future, particularly within the 45-to-54 group.
A recent study of 6,000 housing consumers aged 45 and older found that those with the lowest incomes were as likely to move in the future as those with higher incomes. Conversely, households in the high age range (75+) with the highest incomes were the least likely people to move of any group — by age or income.
When home values are considered across all age-groups, those households with the lowest home values (less than $150,000) were the least likely to move. Still, a significantly greater proportion of 45-to-54-year-olds with the lowest home values were more likely to move than people 75 or older with the highest home values — more than $400,000.
The region of the country where they live is a factor for determining whether or where they might move, according to the study.
Active Participants in Recreation, Culture
The proportion of households who plan to move to an active adult community or who would consider moving to an active adult community has increased significantly in the past few years.
Within the 45+ age group, 22% of respondents said they were likely to move to an active adult community and 36% said they might move to an active adult community. About 42% indicated they were likely to move to an all-age community.
Many studies compare and contrast those who prefer to move to an active adult community with those who prefer to move to an all-age community. These studies show that those who prefer to move to an active adult community are more active. Unlike their counterparts who prefer to move to all-age communities, those considering moving to an active adult community say they participate in more recreational, educational, cultural and sports activities ― and do so more frequently — than those considering all-age communities.
Wanted: Bigger, Smaller or Just Better Homes
Despite the common perception that everyone who is 55 or older wants to downsize, the recent 45+ survey results indicate that, as with other age-groups, 55+ buyers want maximum square footage for their money.
The data show that even households planning to move to an active adult community aren’t necessarily looking to downsize.
According to the study, among 55+ respondents, 34% of those considering only active adult communities, 36% of those considering all-age communities and 35% of those considering both strongly agreed that they wanted the maximum square footage their money could buy.
Among middle-America households in the larger 45+ group, 72% indicated they wanted the largest basic home they could get for their money.
At the same time, those who are willing to pay more for their homes also are more willing to compromise on size, according to the study.
About 46% of those planning to spend less than $150,000 for their homes said they wanted as much space as their money could buy. In contrast, only 28% of respondents planning to spend $400,000 or more wanted as much space as their money could buy. Many boomers who are able to invest more in their homes want better, not necessarily bigger, homes.
The study found that buyers will compromise on size if that means they can upgrade the quality of their homes.
Of the middle-America households in the 45+ age group who were planning to move, 53% said they would prefer a top-quality smaller home to a regular larger home. Moreover, the percentage that preferred the quality of the home over its size increased with age.
Although 14% of respondents ages 45 to 54 strongly agreed that they would sacrifice space if they could have a top-quality home, 25% of 75+ householders said likewise.
Preference for a top-quality, smaller home also did not differ by the amount respondents planned to spend. Whether planning to spend $150,000 for a home or $400,000 or more, an equal percentage was willing to trade size for quality.
Although a majority of those 55 or older who plan to move to an active adult community and a majority who plan to move to an all-age community indicated they were willing to trade size for quality as well, the preference for quality over size is more pronounced in the active adult group. More than two-thirds of these respondents agreed or strongly agreed that they preferred a smaller home with everything top-quality.
Careful Connoisseurs of Housing Options
Home buyers who are 45 and older usually do not have to move. Rather, they are at a point in life where, if they decide to move, they will move to a place where they really want to live.
Consequently, they take their time considering their options. They talk with friends, they size up what they want and need in a house and community. They will look to the builder and developer to “wow” them.
As with other market segments, referrals among these buyers matter.
Many will follow friends to a community. Still, with nothing forcing them to move, they won’t tolerate inefficiency in sales, communication or construction.
As these customers seek out new homes and communities, they look for builder expertise on universal design features, are willing to pay for certain upgrades and understand the trade-offs inherent in obtaining the home and lifestyle they desire.
Because many in this age group may be moving from full-time to part-time employment and have fewer family responsibilities and smaller households, they can explore new options for living, spend money on upgrades instead of another bedroom and pay for homes and communities that better represent who they are or who they want to become.
The study found that the primary reasons these buyers cited for moving were to have a new house, to live among others who are more like them or to start over.
Although real estate is part of the deal with this varied age group, the intangible fabric of the community is what really sells the home.
Margaret A. Wylde, Ph.D., CAASH and the author of “Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market” available at BuilderBooks.com, heads ProMatura Group, LLC, an international research firm headquartered in Oxford, Miss. Wylde has conducted research about home preferences and purchase decisions for more than 20 years. She was named a 2007 Icon of the Industry by the NAHB 50+ Housing Council and is a speaker at the 2008 Building for Boomers & Beyond: 50+ Housing Symposium in New Orleans. For more information, e-mail Wylde, or call her at 662-234-0158.
Find Out What the 45+ Housing Market Wants
“Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through BuilderBooks.com, will help 50+ housing professionals determine the right design, home features and amenities to attract boomer home buyers in their market.
Margaret Wylde guides readers through the latest survey results on this important consumer group and explains what their responses mean for today’s and tomorrow’s home building industry.
To view or purchase this publication online, click here, or call 800-223-2665.