Golden years: the elder edge of the baby boom generation hits the 60 mark this year, but there’s no indication they’ll slow down. Instead, their young-minded demands and massive buying power will continue to influence the housing industry
The American Association of Retired Persons (AARP) calls them “zoomers” to indicate their “on the go” attitudes and lifestyles. Others label them “nexers” for their readiness to move into their next (and probably last) home. They also go by “active adults,” “semi-retirees,” and, of course, “baby boomers,” the latter ever since a 1947 article in The Washington Post coined the term.
Call them what you want (except “seniors” if you expect them to answer), but the continuing influence of the nearly 80 million Americans born between 1946 and 1964 on every consumer good and service is undeniable, and perhaps housing most of all. That’s because, as their legacy indicates, they’ll do exactly the opposite of what their parents and previous generations did in their golden years; instead of fading away to Florida (or Arizona or an old-folks home), most want to age in place, work well into their 70s, and take out 30-year mortgages to finance lavish lifestyles in a variety of urban and suburban housing settings and styles, most likely close to where they live now. “This generation is looking for new homes to treat themselves with,” says William Feinberg, president of Feinberg and Associates, an architecture and design firm based in Voorhees, N.J., that focuses on the 50-plus market. “They want everything to be the nicest they’ve ever owned.”
For new-home builders and residential remodeling contractors, the opportunities associated with such attitudes are almost limitless. That’s also good news for dealers, who will be challenged along with their pro customers to keep up with the demands of arguably the most fickle generation of consumers yet seen but also benefit from their willingness to spend more on a bigger pool of high-margin options and upgrades, low-maintenance and environmentally sustainable products, and universal design features that extend their accessibility inside and around a new, existing, and/or second home.
A New Attitude
Trying to figure out the whims or track the trends of today’s emerging active adult market might appear futile given their unpredictable purchasing history, but one thing seems to be for sure when it comes to their housing preferences: “We don’t hear the word ‘downsizing’ in any of our focus groups,” says Feinberg, who also says terms like “age-restricted community” and “retirement” are generally frowned upon, as well.
Instead, Feinberg and other active adult market experts say, they want a single-level single-family home in a village-like suburban setting … or an urban loft in the heart of downtown … or a seasonal vacation home within a few hours’ drive … or a whole-house remodel of their existing family home that replaces the living room with a generous great room-kitchen arrangement, provides a home office, media room, and fitness area, and puts a full bedroom suite on the main level.
“Boomers are not at an age where they see age-restricted [housing] as appropriate,” says Chuck Covell, president of Bozzuto Homes, a builder based in Greenbelt, Md., who adds that buyers of age-appropriate communities (housing projects designed for older active adults, but not restricted to them) are seven years younger than those who purchase homes in truly age-restricted communities, both of which the company develops. “They haven’t gotten to the point where a home is a burden they can’t handle.”
Maybe not, but boomers also are historically willing to pay for convenience and low-maintenance products; for their homes, specifically, those characteristics help reduce the burden of housing upkeep chores and enable them to age in place in the same home, whether new or remodeled. “It is important to remember that boomers are convenience-driven consumers,” says Mark Goldstein, president of Impact Presentations Group in San Ramon, Calif., and a leading market expert. “Wasting their time is worse than wasting their money.”
An Expanding Inventory
For pros and dealers, that mantra translates into synthetic or hybrid-material exterior finishes (think fiber-cement siding, composite roofing, fiberglass doors, clad windows, and polymer-based trim) as well as universal design products that include doors and cabinets with lever or grip handles instead of knobs; crank-open casement windows instead of hung units; hard-surface flooring; multiple lighting schemes; work surfaces, storage options, and appliances at varying heights; and the structure–if not the actual hardware–for grab bars and other helpful handles in bathrooms to create, as Goldstein says, a “boomerized” version of their homes.
And all at the highest quality, too. “Low maintenance and high quality are the hot buttons for these buyers,” says Kendall Carre, marketing director at Ambrosia Interior Design in Tustin, Calif., which works with builders to properly spec and amenitize homes for the 50-plus crowd.
That statement is bolstered by a 2003 study co-sponsored by the NAHB and Countrywide Home Loans of Plano, Texas, that found half of older home buyers are spending as much or more for a new house than their previous homes and are willing to pay extra for high-tech options and upgrades in those homes. Boomer buyers at Sun City Lincoln Hills, a Pulte Homes/Del Webb community in Lincoln, Calif., for instance, are spending upwards of $60,000 for architectural upgrades and options such as flooring and countertops.
Convenience also comes into play in helping pros take advantage of option-amped boomers. “What you really want to do is create packages that increase the perceived value of what they are buying,” says Jane Meagher, president of Success Strategies, a marketing consulting firm in Manalapan, N.J. “Put together option packages that increase sales and streamline the buyers’ decision-making time.”
Recalling their youthful unrest for the social status quo, today’s baby boomers also maintain a concern for the environment. “Activists of the ’60s are today’s active adults,” says Doug Van Lerberghe, senior project manager for Kephart, a Denver-based architecture and design firm with a portfolio of master planned communities, high-density infill projects, and a variety of multifamily housing for that market. “They are keenly interested in environmentally friendly homes that allow them to be true to their convictions.”
As with products to help achieve universal design, sustainable substitutes for almost every component of a home’s design, construction, and operation, including insulated windows and patio doors, responsibly harvested wood for framing, floors, and cabinets, various insulation products, and low-toxin or non-toxic coatings, are fair game for dealers to satisfy demand and leverage higher margins … at least until that demand becomes truly mainstream under the weight of 80 million consumers and those following in their footsteps.
For dealers struggling with the dilemma of focusing their sales efforts on production builders or small-volume, high-margin pros, including remodelers, the age of active adult buyers might well remove making a choice. Not only are their high-end tastes all over the board (akin to a custom-home or remodeling customer), but in enough volume to push the largest builders (including all of the top five) into constructing homes and communities for boomers. “A home’s personalization is key to its appeal to active adults,” says Debra Newell, founder and president of Ambrosia Interior Design.
Add to the mix a significant number of boomers who prefer to stay in their current homes to age in place, and remodeling contractors are poised to enjoy a similar demand for their services as their builder counterparts. “A majority of middle-aged Americans think that they’ll be able to stay in their current home for the rest of their life,” says Newell, citing a 2004 AARP study, “but most of them haven’t considered the changes they will need to make to their homes to accommodate their diminishing health and physical abilities as they age.”
In addition to remodeling their homes, there’s another second chance for pros to impress the active adult market: a subculture of financially secure boomers searching for second homes. A recent survey by the National Association of Realtors (NAR) reports the typical second-home buyer is 55 years old and that one-quarter of them spend more than six months a year at their second home.
“Nexers want to explore resort-style communities where they can relax and do the things they want to do when they want to do them,” says William E. Becker, president and managing director of the William E. Becker Organization in Teaneck, N.J., a market planning and consulting firm specializing in active-adult communities.
If Orlando, Fla., builder Alex Hannigan’s latest home there is any indication, second homes for active adults will far outstrip even what those buyers are used to in their primary residences. The 6,980-square-foot lakeside home has all the boomerized amenities, from a main-level master and home office to an elevator and tricked-out workshop garage–not to mention a host of resource and energy efficiencies–designed for a semi-retired couple spending their winters in the warmer climate. “It’s the ‘all-about-me’ generation, but with a conscience,” says Hannigan, a custom builder who recognizes the potential for seasonal boomer buyers in his market. “They want it all.”
If dealers think active adults will only flock to Florida or the Southwest to spend their sunset years, recent history among builders actively pursuing that market–including gurus like Del Webb–indicates age-appropriate housing communities are popping up all over, a trend that extends the opportunity to pros and their dealers nationwide.
For instance, the NAR survey also found that nearly two-thirds of boomer buyers bought a second home within 100 miles of their primary residence. Meanwhile, NAHB housing policy analysts filtered through the 2000 census to discover counties in many I states enjoying tremendous growth in active adult-targeted community development among a then-estimated 21 million home buyers ages 55 to 74 nationwide.
Though markets in Florida and Arizona continue to lead the charge, emerging areas in Arkansas, Maine, Colorado, Pennsylvania, and other states across the country are attracting (or rather, keeping) aging home buyers, as well. In all, the NAHB analysts found 21 counties in which at least 45 percent of buyers born before 1955 purchased a home between 1995 and 2000.
“Today’s active adults now have a greater variety of choices, and many of those choices are not far from home,” says Jane Marie O’Connor, president of 55+ Marketing in Hawley, Mass., and publisher of Mature Living Choices, which reaches readers in 39 states and counting. “They now can move into age-qualified or targeted developments built by national and local builders in their own communities.”
Del Webb, for instance, which founded the concept of age-restricted communities 40 years ago with its Sun City concept in Arizona, now builds variations of that model along the Eastern Seaboard up to Massachusetts, as well as in markets in the Northwest and intermountain states.
Unlike any other segment of the housing industry, the active adult market appears to cross over every boundary a builder or dealer can imagine. Whether it’s remodeling vs. new construction, high-margin vs. volume, single-family vs. attached, or suburbia vs. urban infill, boomer buyers are there.
And they’re smart, especially about the products they want and know go into their homes. “These buyers scour the Internet and know more than their builders do,” says Meagher. “They’ll come into a design center knowing everything relevant to them about a builder’s options and upgrades.”
Meagher tells her builder-clients to rely on trade partners and LBM dealers to help keep them up to speed on what boomer buyers are likely to want–and know about already. “Subcontractors and vendors have a vested interest in selling their products,” she says. “They should periodically update their builders and teach them how to sell their products, or those builders may find someone else who will.”
RELATED ARTICLE: Market focus: active adults.
Consider the following facts about boomers that might help you and your pros focus on this emerging market opportunity:
* They cross all housing types and geographic markets, including rental housing.
* They prefer their next home to be in the same general vicinity of the one they’re leaving … unless they decide to remodel that house instead.
* They base their purchasing decisions, especially for options and upgrades, on convenience, low maintenance, high quality, and good looks more so than on price.
* They demand homes with character and the opportunity to personalize instead of cookie-cutter elevations and floor plans.
* They demand and pay for high-tech, including structured wiring systems and high-speed cabling.
* They are attracted to single-story living, or to at least having major rooms (including the owners’ suite) on the at-grade level.
* They appreciate products and systems that are environmentally sensitive, save energy and other resources, and offer superior durability.
* They want the ability to age in place and will pay for universal design in their floor plans, features, and finishes–as long as the don’t look industrial or out of character with the rest of the house.
* They don’t plan to retire at 65 and yet also expect to live a third of their life in semi or full retirement.–R.B.
–Rich Binsacca is a contributing editor for PROSALES.
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COPYRIGHT 2006 Gale Group