It’s Not Easy Getting a Handle on What 55+ Home Buyers Want
Coming off the most devastating economic downturn in decades, builders in the 50+ housing market should not assume that their buyers are looking to purchase a luxury home or have unlimited funds to spend, Jim Chapman, president of Atlanta-based Jim Chapman Communities, said at an educational seminar during last month’s International Builders’ Show in Las Vegas.
When the housing market was riding high in 2005 to 2007, Chapman said that many of his customers were paying all cash, and the average mortgage for his homes, which sold in the $240,000 to $280,000 range, was $100,000.
Now, he says, buyers have a tremendous fear of tapping into their cash reserves because their existing homes are worth less and they are afraid to put their house on the market.
“The active adult is a well-trained target shopper,” said Chapman. “They will find the value. They have time. They will wear you down.”
Typically, those looking to transition into an active adult community are seeking to downsize from their current home. The key to making a sale is to determine whether the customer wants to buy, or needs to buy, said Chapman.
“Is the existing home dysfunctional? Have they lost a spouse? Do they have a recent injury?” he asked.
The answer to these questions will determine the motive for moving to a new home.
Contrary to popular belief, Chapman also said that confidence does not usually increase with age or experience.
“The 50+ buyer can be certain of want or need but not confident to act,” he said. “They are low on confidence, low on cash and high on need.”
Directing a note of caution when marketing to the baby boomer market, Andy White, of Lifetime Communities in Columbia, S.C., illustrated his concerns by asking those in the audience who were born between 1946 and 1964 to stand up. The bulk of seminar attendees rose from their seats and he then asked for a show of hands from those who knew when they would retire. Nobody in the near-capacity auditorium responded. White then asked those standing to raise their hand if they knew where they would live when they retire. A smattering of hands went up.
“I bet you would see the same results if you went to any other city and asked the same question,” White said. “Nobody knows what to build for boomers yet. That demographic doesn’t know when or where they want to retire. Boomers are extremely unpredictable.”
After building a community in 2008 targeted to boomers shortly after the housing downturn began, White said that the development instead attracted interest from Generation Y buyers, whom he described as first-time move-up buyers under the age of 30.
“It became obvious to adjust the marketing mix to get to the Gen Y buyers,” he said.
The challenge, he added, is how to get the message out to these disparate groups.
White said that most people today are getting their news from the Internet, as opposed to newspapers and that the way to reach the Gen Y market is through social media on Facebook and Twitter.
He also said that in today’s business climate, he is actively courting the general brokerage community, which he said now accounts for two-thirds of his sales.
“Everything is in flux,” said White. “If you want to sell to boomers, don’t make big capital commitments for at least a couple of years. You need to do research. Join the MLS system and keep up with what’s going on in your market.”
Driven by increases in home, energy and transportation costs, interest in high-density urban living is on the rise, according to Rick Duke of Georgia BRE Insights, LLC in Atlanta.
Providing a look at a successful, sustainable multi-generational community, Duke cited the example of Dunwoody Village in the Dunwoody, Ga., area as a model for buyers of all ages.
Dunwoody Village offers quality restaurant, office and retail space. The mixed-use development features what Duke described as a “live-work-play” environment that includes wide sidewalks, retail-accessible store fronts, space for outdoor seating and housing opportunities for those with a wide set of incomes.
Duke said Dunwoody Village is a community where people “can use walking, biking and public transportation to get to places they have to go.”
Find Out What the 45+ Housing Market Wants
“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.