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Location and value are the top factors influencing 50+ buyers in today’s market, according to experts during a panel discussion at the 2011 International Builders’ Show in Orlando.
Two national reports cited by the panelists — a 2010 study by the American Association of Retirement Communities on destination buyers, and the “Survey of Affluence and Wealth in America” by American Express Publishing and The Harrison Group — showed that while many retirees would prefer to stay where they are, some may be convinced to move to a home with good value in an ideal location with a supportive community.
“While the market pie has shrunk, there are still buyers out there,” said Bill Houghton, president of the Landings Company in Savannah, Ga.
The panelists noted that during the housing boom, people as young as 40 who were purchasing retirement homes as lifestyle investments became the biggest market for amenitized community developers.
The amenities for these communities included the traditional golf courses and swimming pools but branched out into new territory with beaches, walking and biking trails, fitness centers and even shopping.
Many of those who planned in advance for retirement, however, might have chosen differently had they foreseen the financial turmoil down the road.
When the bubble burst, retirees and potential retirees were the hardest hit. As a result, 60% of boomers now say they will postpone retirement and the purchase of a retirement house, if they move at all.
In an equally difficult position are many of the younger buyers, who took out cash from their current homes for downpayments on the retirement homes. This has left them with less equity to withstand the housing downturn.
In general, those who previously had their eye on retirement now have significantly lower financial assets to make their next move.
And older households also face the same challenges as other home owners in selling their existing homes or avoiding foreclosure.
According to a 2009 AARP study, Americans 50 years and older account for 30% of all delinquencies and foreclosures.
“The prognosis is that the buy-now mindset is history,” Houghton said. “They are holding onto their current property if they can.”
At the same time, because so many amenitized communities were designed and developed specifically for boomers, the members of this age group who are tentatively in the market have more to choose from and are spending more time looking around for the best price and value.
The typical buyer will now look at dozens of alternatives, consider between six to 10 communities and visit an average of three before making a purchase. For that reason, it is important to “reach prospects before they get to your area and sales and welcome center,” said Dave Robertson, president of RPI Media.
And the average age of buyers in these communities has been on the rise.
The average age of buyers at two golf communities in Georgia, for example, rose from 52 to 58 between 2006 and 2010 .
Also, 46% of prospective 50+ buyers prefer to stay in the same state — 44% in the same community.
Fifty-five percent ranked the home’s value as a top priority.
Incentives for moving have also shifted and reshaped what’s desirable in a community. Walking and swimming are now more popular than golf, requiring communities to ensure they provide these amenities.
“Right House, Right Place, Right Time: Community and Lifestyle Preferences of the 45+ Housing Market,” available through BuilderBooks.com, will help determine the right design, home features and amenities to attract boomer home buyers in your market.
Author Margaret A. 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.