Active Home Buyers Present Challenges
Building for active adults poses several specific challenges.
First, older new home buyers do not usually move because they need to. They aren’t looking for better schools or relocating for a new job. They are discretionary buyers.
Second, this market is not homogenous. Prospective buyers in this market are more individualistic. Many belong to target audiences such as wealthy ethnic groups and multi-generational families that should not be overlooked. And buyers in today’s retirement market tend to be looking more for new exciting opportunities than pursuing a life of leisure.
Third, there are many more options for retirement living. Retirement used to be limited to remaining in the family home; moving to a smaller home in a warmer climate or near family members; moving to a condo or apartment, especially if a spouse was deceased; and ultimately, as needs dictated, moving into a nursing home.
Added to the options available to today’s “over-55” market are: renting or purchasing an apartment or single-family home in a conventional, age-qualified or age-targeted community; moving to an attached villa, town home, condominium, apartment or detached single-family house; finally building or buying one’s “dream” home; establishing several homes to escape cold winters and hot summers while still remaining close to family and friends; buying or renting a downtown apartment in the center of cultural and recreational activities; or buying or renting a unit that offers resort amenities, meal plans and whatever supportive services might be needed for the rest of a person’s life.
To our surprise, we discovered in our research a significant number of “empty nesters” purchasing four- and five-bedroom, 4,000-square-foot luxury homes. This is no longer a one-dimensional “move-down” market.
Fourth, there is no historic precedent for what is occurring in the retirement housing market today. Until recently, most existing “active adult” prototypes relied on buyer relocation to Arizona, Nevada or Florida. And many of the characteristics that made retirement communities in those states a success — climate, land availability and financing for the lifestyle infrastructure that needs to be in place to attract discretionary buyers — are difficult to apply to other parts of the country.
A burgeoning second home market has also been helping to reshape what older persons want and need in their primary residence. Will second homes become primary residences for retirees who don’t want to move away from an already established base of friends, services and family traditions?Will older buyers consider dual residences so that they can stay in a familiar setting yet take advantage of another location offering seasonal weather or recreational advantages?
While much has been written about baby boomers, no one really knows the answers to these questions because their options and preferences are still emerging. We have some ideas about where this market is headed. We know, for example, that maintenance-free homes in smaller “at-home” communities may sound like a good option. But what we really know for sure is that the housing baby boomers want won’t be what their parents wanted, and it probably won’t be what the current generation of “active adults” wants either.
Finally, older households are going to be responding to idiosyncrasies in the local market when they decide where they want to live.
When marketing to older persons, you need to create the desire to move to a new home. You’re competing with the home in which your target buyer is already living, a place to which they have probably grown strongly attached over the years.
In focus groups, older respondents will often tell us that they want a new home that’s the best place for them, not their children. It’s their turn in life to fulfill some of the desires they have been working for. They will base their home buying decisions on their aspirations, not their needs, even though they may be better able to articulate what they need than what they desire.
Since “all real estate is local,” the particular idiosyncrasies of the local real estate market will shape what is considered a dream home in that location. Several major universities with strong alumni loyalty are finding that it involves homes on, or near, the campus with an active interchange between the two.
Ethnic mores (particularly as they relate to family expectations), the number of military retirees or other affinity groups, existing familiarity with active adult products and regional differences all influence what the older adult market will buy.
Sorting It All Out
Figuring out what older buyers want is not going to be an easy job. But there are approaches that will help you start zeroing in on the many opportunities this emerging market has to offer, and that will be the topic of the second, and concluding, part of this article in the upcoming issue of Nation’s Building News.
Doris Payne, a gerontologist, is the senior consultant at Marketscape Research and Consulting, which is based in Chula Vista, CA. She and her colleagues work nationally with home builders to assisting them in designing, answering questions and making decisions about conventional and seniors for-sale and rental housing. Payne is a member of the NAHB Seniors Housing Council and was a speaker at the 2003 Seniors Housing Symposium. She can be reached by e-mail or at 619-934-1816.
For more information about seniors housing and 50+ market, visit the NAHB Seniors Housing Council Web site at www.nahb.org/seniors. To join the Seniors Housing Council, click here or contact Jeff Jenkins at 800-368-5242 x8292 or jjenkins@nahb.com.
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