Builders’ Future Lies With Retiring Boomers

Kenneth Harney’s column, appearing in the Los Angeles Times, says that for the nation’s home builders, the most important question in the next 20 years will be where baby boomers elect to move, when and if they sell their homes.

In the ’80s and ’90s, post-retirement golf communities became extremely popular. Beach and ski resort developments are also out there in abundance. Nowadays, more people are looking to downsize and move to a “center city” condo complex to be close to attractions and necessities — not to mention avoid lengthy commutes.

With more than 70 million Americans in this demographic and heading towards retirement (the oldest boomers turn 60 this year), the National Association of Home Builders‘ annual conference was consumed by this topic January 11-14. While research has shown for decades that homeowners in their 40s and 50s often have no detailed plans to downsize or sell, a study unveiled at this year’s convention suggests that the boomers might have different ideas.

• In the study, more than 50 percent of homeowners ages 45 to 54, and nearly 60 percent of owners ages 55 to 64, rated themselves either “likely” or “very likely” to buy a vacation, investment or new primary residence sometime in the next 60 months (five years).
• Roughly 49 percent of owners 55 years and older say they are likely to move into some form of “active adult” community.
• One of five households in the demographic are thinking about an age-restricted adult community — a figure more than double that of just five years ago.

The new research, conducted by ProMatura Group, an Oxford, Miss.-based consulting group, is based on a statistical sample of 2,309 baby boomers. Margaret Wylde, president and CEO of ProMatura, said that boomers’ attitudes on housing and location may be significantly different from those of their immediate predecessors. They are seriously willing to move to planned communities that emphasize an active lifestyle, fitness and social interaction.

The desire for physical pursuits aren’t necessarily what developers assume, however. While they favor an “active lifestyle,” just 1.7 percent of homeowners 55 years and older said they were likely to purchase a home on a golf course. The biggest draw, view-wise, is green space, such as parklands or common areas built into many modern planned communities. Boomers want to see trees, grass and water — not golf balls — out their windows.

Boomers put high emphasis on the presence of well-equipped fitness centers nearby, more than double the level of interest of homeowners overall. They also appreciate fine restaurants, four times more (by percentage) in fact. And, boomers are emphatic about bedrooms — the magic number is three — but don’t mind if total living space, whether in condo or detached single-family homes, is smaller than their current family homes.

In any case, we are looking at a generation flush with home equity and apparently willing to sail into retirement with high-end lifestyles — both within their homes and surrounding them. This could mean more reverse mortgages in the next decade, but in Florida, the baby boom demographic will likely translate to a steady market for many years to come. Regardless of whether Florida home loan rates stay low, the boomers have the capital to invest.