Nation's Building News Online

Plain Text Version (Click Here for Graphical Version)

Sponsored by Countrywide Home Loans National Builder Division
and 2-10 Home Buyers Warranty

www.NAHB.org
Week of December 22, 2003

Front Page

President's Message

* 2003 – A Year to Remember

Housing and Economics

* Single-Family Home Starts Hit a Record High in November
* Following One of the Best Years Ever, Housing Poised for Solid 2004
* Builders Upbeat This Holiday Season
* Eye on the Economy

Multifamily

* FHA Multifamily Mortgage Insurance Programs Back in Business
* Index Finds Weak Rental, Strong Condo Markets

Environment

* U.S. Appeals Court Rules Against Regulation of Roadside Ditches
* Decision on Jurisdiction Over Isolated Wetlands Breeds Disappointment
* Court Rejects Endangered Species Permit Revocation Rule

State and Local

* New Jersey Builders Defang Governor’s Anti-Housing Tool with Economic Impact Study
* Legislative Group Endorses Favorable ‘Notice and Opportunity to Repair’ Amendments

Business Management

* Systematize the Selections Process to Avoid Hassles

Codes and Standards

* R-Values Excessive in Revised ASHRAE Energy Standard

Construction Safety

* OSHA Reports Increased Citations in Fiscal 2003
* Workers Should Take Precautions in Cold Weather

Seniors Housing

* Who Are Today’s Over-55 Buyers?

Legal Issues

* Ask the Lawyer – About Mechanic’s Liens

Housing Finance

* Military Housing Privatization Projects Coming Up in Florida, Oklahoma

Small Builders and Remodelers

* Why Have Your Customers Come to You?

Education

* New NAHB Course Addresses Insurance Liability Concerns
* First Annual National Designation Month Debuts in February

Labor

* New Publication Provides Overview of Basic Construction Principles

Building Systems

* Building Systems Councils to Include Concrete Home Building

Building Products

* Local Brick Distributors Provide Home Buyers With More Choices

Housing Forum

* Mysterious Cracking

Builders' Show

* Show Activities Focus on Sales and Marketing Professionals

Building News Coast To Coast

Association News & Events

* Notice of Annual Meeting of the Members of the National Association of Home Builders
* Find the Right NAHB Staff Faster Than Ever Online
* Bob the Builder Teaches Children About Safety
* Environmental Coloring Book Goes Online
* Northern Kentucky Remodelers Provide Holiday Cheer
* Builders in Southeast Virginia Launch General Liability Company
* One Home at a Time, Mississippi Builder Putting Working Families on the Road to the American Dream
* Calendar of Events

NBN Back Issues

 

Who Are Today’s Over-55 Buyers?

The first of two parts about understanding and marketing to 55+ home buyers.

Older buyers are becoming major purchasers of new homes in urban, suburban and rural areas across the country. But they are not new to the industry. Many are the same buyers who, during the last 20 years, surprised home builders by wanting and buying large, luxury homes.

We have divided the older buyers of this decade into two distinct age groups, pre-boomers and early boomers.

  • Pre-boomers: Pre-boomers are the 14.3 million households headed by someone born between 1936 and 1945. Also known as “The Lucky Generation” because they were too young to serve in World War II and the Korean War and too old to serve in Vietnam, they entered the job market at the beginning of a 20-year economic boom. They had little competition for jobs, housing and education, unlike the boomers who followed them.

  • Early boomers: Early boomers are the 21.3 million households (50% more households than the pre-boomers) headed by someone born between 1946 and 1955. These 37.7 million people represent 46% of the 83 million baby boomers. They have already redefined music, religion, leisure, workforce composition, workforce productivity and American norms and values. They also will redefine retirement housing.

Sponsored by: 2-10 Home Buyer's Warranty

Need to Buy General Liability Insurance?
Confused about Subcontractor Agreements?
Structural Defects, Can They Happen to You?
Building A Better Business Through Education?

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 jburns@realestateconsulting.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.


[ Go to Top ]

Sponsored by: Countrywide Home Loans

Check it out: Countrywide offers some of the most innovative strategic alliance programs in the industry.
Discover how Countrywide's non-conforming loans can give larger borrowers an edge.

To unsubscribe or to manage your subscription, CLICK HERE

Nation's Building News Online is produced and distributed by the National Association of Home Builders