Your sales forecasts and land acquisition decisions should consider the coming change in demographics in your area. You are probably already building retirement homes, even if you are not consciously doing it. Buyers over the age of 55 already purchase one of every five new homes sold in the country.
- Study Older Buyers: The lives of baby boomers and pre-boomers were dramatically different than those of their predecessors, which is one major reason that their housing preferences have always been different.
It’s important to understand the generational histories of residents who are 48 to 67, including the major events in their lifetimes.
- Entitlements: If the entitlement issues in your area are schools and traffic, which buyers do not use schools and do not travel during rush hour?
Share the local demographics with your planning department. The local planning department should know the expected increase in retirees in your community. In almost every county in the country, planners will need to approve more housing to accommodate retirees or force their retirees into resale homes in need of remodeling. Communities do not have to be age-qualified, but the home designs should include downstairs bedrooms and other retiree-friendly amenities.
What can you do to get these equity-rich home owners to move? Keep in mind that most of these buyer are not as sensitive to rising interest rates as younger buyers, since they probably won't get a mortgage.
- Existing Home Competition: Is your area full of small homes on large lots? Is that really what most retirees in your area want?
Instead, design communities and homes that include features that are in high demand, yet do not exist in sufficient quantity in the resale market. Analyze the resale housing stock in your market.
Don't let your competitors develop a retirement housing strategy before you do.
The retirement sector will be one of the fastest growing sectors of new home demand, based solely on the highly reliable projected growth in population over the age of 55. Using very reliable Census data, we expect the number of retirement homes sold per year to increase by 49% from 455,000 last year to 680,000 in 2010.This is a market that is waiting to be served.
To Read Part 1 of This Series ...
To read, "Who Are Today’s Over-55 Buyers?" the initial article in this series published on Dec. 22, click here.
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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