What Characteristics Do They Have in Common?
Both age groups have a high propensity to move and have more wealth than any generations before them, which should make selling homes to them relatively easy. However, closing the sale will be the challenge because both groups are savvy buyers, skeptical of promised amenities and demanding exceptionally high customer service.
Increasingly, both groups prefer to buy new homes because:
- The homes available for sale in the resale market were not designed for their needs.
- As affluent retirees, they will want to customize their home to their taste.
While age-qualified communities have received the bulk of the attention in our industry, most of the demand will continue to be in non-age-qualified communities. Consider the following statistics from the 1990s:
- 24% of those who turned 65 during the decade bought a home during the decade.
- 72% of these buyers stayed in their local metropolitan area.
Where Will They Live?
Our research indicates that the early boomers have a higher propensity to stay in their metropolitan area than does the pre-boomer group.
While Arizona, Nevada and Florida will continue to be the fastest-growing retirement states in the country, the Pacific Northwest, Rocky Mountain region, Texas Hill Country, the Ozarks, Carolinas and New England also will attract more than their fair share of retirees.
(The map on the right indicates which states are attracting more retirees. Click on it for a larger view.)
- The Site of Their Youth — Many retirees return to the site of their youth, especially college and military towns where housing is affordable and the climate is attractive. Places like Austin, TX, and Colorado Springs, CO, are popular destinations.
- Urban Areas and Areas Adjacent to Urban Areas — More people who reach retirement age will stay in their current area because future retirees:
- Want to continue working
- Want to live close to their families and friends
- Will have more money than any prior generation
- Will take advantage of the $500,000 capital gain tax exclusion by buying a much smaller home or condo
(The map on the left shows the urban concentration of retirees. Click on it for a larger view.)
Emerging Design Concepts
The Baby Boomers (and pre-boomers) have had a tremendous influence on housing during the last two decades. The new home industry built their large homes on small lots in the 1980s and their gate-guarded castles in the 1990s.
Current and future retirees do not want a house built for “old people.” They want an easy living home that an Olympic athlete also would enjoy, and their preferences will vary greatly based on their socioeconomic status and their values. They also want to live in homes and communities that will allow them to re-connect with their friends and family.
Here are the generalities we have concluded about the future of new home design for older buyers:
- Inexpensive, common sense, universal design concepts that make life more enjoyable will grow in popularity.
- Older buyer segmentation will occur, allowing developers to maximize absorption by building multiple types of homes and neighborhoods that appeal to different psychographic categories of buyers.
- Home designs will vary dramatically based on the socioeconomic conditions of the local market.
The AARP and Universal Design
The AARP regularly educates its constituents on housing issues. Consumers are learning more about universal design because the AARP is becoming a major proponent of universal design.
And if that isn't enough to make you pay attention, legislation targeted at requiring builders to incorporate universal design concepts already exists in Tucson, AZ, and Chicago, and efforts to promote voluntary builder adoption of universal design concepts are already occurring in California and Georgia.
Next: Developing a strategic plan for the 55+ market niche.
John Burns is the president and founder of Irvine, CA-based John Burns Real Estate Consulting, Inc., which analyzes, summarizes and monitors local market conditions; helps companies refine their strategies in an ever-changing environment; and completes customized consulting assignments to help them with land acquisition, market expansion or strategic planning decisions. His company produces the Retirement Housing Boom report that can be customized for each market in the country. Burns is an active member of the NAHB Seniors Housing Council. He can be reached at 949-262-3228 or email@example.com.
Learn More About Seniors Housing Through the Seniors Housing Council
To learn more about seniors housing, join the NAHB Seniors Housing Council. The council provides information, education, networking and recognition opportunities for its members and represents NAHB on seniors housing issues. For more details, e-mail Jeff Jenkins or call him at 800-368-5242 x8292.
BuilderBooks.com Has Publications About Seniors Housing
BuilderBooks.com offers a variety of publications about the seniors housing market. To view or purchase these publications, click here and type “seniors” in the search engine.
2004 Seniors Housing Symposium
To learn more about the seniors housing market, plan to attend the 2004 Seniors Housing Symposium, Building for Boomers & Beyond in Chicago from April 14-16. The symposium will focus on the lifestyle component of 50+ seniors housing.
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