Commercial PropertyAging Boomers Cause Marketers To Rethink Housing
With the first wave of Baby Boomers turning 60 in 2006, the housing industry is looking at serving this tremendous and wealthy demographic in new ways. What do they want and how do they want to live?
According to Patrick Vedra, vice president of operations for Frisco Lakes by Del Webb, these seniors will be like none before them. "They"ll be healthier, wealthier and more active, and will likely redefine our concept of the "golden years,"" he says.
Many won"t actually retire, but will continue to work, launch second careers, pursue advanced degrees, volunteer in the local community and travel. They will continue to impact local and national economies as consumers, employees and business owners.
According to research provided by Claritas, a San Diego market research firm, the number of households headed by people aged 55 to 74 will grow 15 percent to nearly 31 million over the next five years. The number of households headed by this age group with incomes over $100,000 will jump 61 percent to more than six million people.
Network Communications, Inc."s Mature Living Choices, has recently collected data from more than 5,000 active adult homebuyers and has found that 70 percent of active adults want to live in an age-qualified community -- a statistic that directly refutes previously reported data, says Jeff Smedley, national sales and operations manager
"Where previous surveys polled baby boomers in general, we focused only on active adults at the moment they were searching for new housing," he says.
Del Webb marketers suggest that homebuyers are exploring other locations such as Texas in addition to traditional retirement destinations such as California, Nevada and Arizona. "They will become an increasingly important part of the Texas economy as consumers, employees and business owners," says Vedra.
Active adults also want to be near their children and grandchildren, and aren"t as likely to leave their home states for the sunbelt as marketers might think, says a 2003 study by the National Association of Home Builders and Countrywide Home Loans.
And they don"t want to spend their spare time doing chores. Three-quarters of buyers aged 50 and up want homes with yard or grounds service and exterior home maintenance.
Supporting the Mature Living Choices conclusion, the NAHB also found that active adults are highly motivated to move to age-restricted, age-targeted or independent living communities, preferably to single-story homes within an environment of safety and security with streetlights and security systems.
Doug Van Lerberghe, project manager for Denver-based Kephart, an architectural and design firm, advises builders not to lump all active adults together when designing communities. "Active adults are as diverse as the general population as a whole," he writes in Nation"s Building News.
Some may want the emotional comfort of staying in their homes and are good candidates for remodeling their homes. Others may want the urban experience where they have much in common with empty nesters and young singles, while another group may want the security and socialization of an age-restricted community.
And despite the wealth of this generation, many are on fixed incomes and may not be able to afford the opulent lifestyles anticipated for them by marketers. For them, smaller homes and a continuum of care may be the best options.
According to OnBoard, among the places with the largest growth in the over 50 population since 1990 are:
Ashburn, Virginia - 1160.99 percent
Highlands Ranch, Colorado - 940.14 percent
Frisco, Texas - 616.1 percent
Rancho Santa Margarita, California - 594.82 percent
Suwanee, Georgia - 573.01 percent
Trbuco Canyon, California - 563.48 percent
Goodyear, Arizona - 544.4 percent
Flower Mound, Texas - 537.35 percent
Surprise, Arizona - 509.9 percent
Gilbert, Arizona - 493.17 percent
Among the cities with the larges populations of over 50s, according to OnBoard, are:
Chicago, Illinois - 717,555 population over 50
Brooklyn, New York - 669,678
Houston, Texas - 632,198
Los Angeles, California - 558,902
Miami, Florida - 492,231
New York, New York - 462,542
Philadelphia, Pennsylvania - 427,947
San Antonio, Texas - 359,432
Spring Valley, Nevada - 340,609
Las Vegas, Nevada - 340,456