Florida, Arizona Not On All Baby Boomers’ Lists

Nina and Tom Szuch’s Orlando, Fla., home might seem like a cozy retirement spot. Sunny, warm, not as crowded or expensive as the South Florida housing market. But they have missed their family and friends during a six-year stay in the Sunshine State, and are ready to head north. Far north.

Michigan probably isn’t on the list for most active seniors looking to buy a retirement home, but thanks to the efforts of big-time home builders, formerly out-of-the-way states now are in play for 78 million baby boomers who are fast approaching their golden years.

They are being drawn to large housing developments packed with hundreds of homes, golf courses, walking trails and community centers. As the prices of homes in traditional retirement areas become too expensive, many adults like the Szuchs, in their 60s, are choosing to remain in their home states by moving into community developments.

Known in the housing industry as “active adult” communities, such complexes are typically found in “destination” states such as Florida, Arizona, Nevada and California, but one major builder, Pulte Homes Inc., is opening similar communities across the nation, with plans to build 100 of them in 24 states by 2008.

“It’s no longer a fringe component,” said Dave Schreiner, Pulte’s V.P. for Active Adult Business Development. “It’s really become a central part of meeting the needs of the home-buying public.”

The nation’s #2 home builder by units expects significant growth in its active-adult sales, despite cutting full-year forecasts last month because of rising mortgage rates and other hints of a cooling market. Pulte, which posted $14.7 billion in revenue in 2005, competes in a number of home-building segments, but the active-adult category provides its largest source of revenue.

With a steady stream of retirees living longer, the market for these communities is growing to a record high. Del Webb, Pulte’s active-adult brand, represented 39 percent of the 45,630 total units sold by the home builder last year, up from 33 percent in 2004. Pulte acquired Arizona-based Del Webb Corp. in a $1.7 billion deal in 2001, when the two companies combined had only 15 active-adult communities for sale in seven states.

Pulte now has 47 Del Webb communities open for sale in 17 states and plans to expand to New Mexico, Minnesota, Indiana, New York, Delaware, Tennessee and Georgia.

The Szuchs toured a 2,200-square-foot, three-bedroom home in a community being built by Pulte in the Detroit suburb of Brownstown Township. The development will boast more than 600 homes, a 14,700-square-foot recreation center, walking trails, tennis courts and two swimming pools when completed in the next 3-5 years.

“We really missed our family, and here they have a lot for seniors and it’s all so appealing,” Nina Szuch said as she looked at the one-story home in Bridgewater, one of two such Pulte-run Michigan communities, which require 80 percent of its population to be 55 or older.

Pulte estimates 20 percent of its new residents in these communities come from out of state, but the company mostly wants to attract local seniors who want to downsize their large, empty-nest homes and be close to their families. Schreiner said many seniors pay in cash or are invested in many other interest-driven assets, so the group is not affected by the rising interest rates as much as the housing market as a whole.

Seniors also don’t affect the local schools and put less stress on sewer and water lines. They volunteer in the community, are less likely to commit crimes and will avoid rush-hour traffic jams.

In fast-growing Shorewood, Ill., 10,000 residents are filling schools and causing great demand on utilities. But a Del Webb community, Shorewood Glenn, which opened in 2004, has been a perfect fit, said village President Richard Chapman.

“We can’t find any negatives with that community. They’re great for our property tax base. They don’t have kids to put in the schools. They go out to eat and shop for their grandchildren. And they have a lot of spendable income,” Chapman said.