Industry research sheds light on what this demographic looks from when shopping
Despite the many studies done on the Baby Boomer Generation, what they want in terms of housing as they move into retirement is still a mystery. Right now, people 55 or older account for 45 percent of U.S. households, a number that is projected to reach 47.1 percent by 2026.
A number of experts, developers and planners tackled what these home shoppers want and need in their future housing at the National Association of Home Builders (NAHB) annual trade extravaganza in Las Vegas.
Here’s what we learned about the 55+ home buyer demographic from this event:
Buyers Take Years Rather Than Months to Search
Even though older buyers tend to be more positive about the prospect of buying a new home, it can take them months, even years, to make the decision. “Mature couples take two to four times as long to purchase a home,” Mollie Carmichael, a principal at Meyers Research, told builders and developers at the International Builders Show. A majority of Baby Boomer homeowners have considerable equity built up in their existing home, and, even at 6 percent, interest rates are still lower than many paid over their lifetime. Approximately 84 percent don’t need to buy and can afford to wait for the right opportunity.
Affordability is a factor driving their longer buying cycles, as roughly half of respondents cite affordability as an obstacle to purchasing a new home. Approximately 45 percent of those surveyed by Meyers Research say they can’t find what they want, which could reference the home, the community or both.
Considering this protracted home search, it might seem mature buyers are uncertain about what they want, but in reality most have a vision of their ideal home. The challenge is finding that home in the right location. “This market is looking for something more than a house,” said Gary Snider, a partner at BSB Design, speaking at another session on the 55-plus market.
What They Want: An Emotional Connection
Although location is still the top consideration, the home itself is the most compelling factor in the decision to purchase. Not only do they want a great house, but, as Carmichael emphasized, “The new home has to have an emotional connection.” The most important home features are interior style followed by curb appeal and a better community and lifestyle.
Not All 55+ Home Buyers Are Downsizing
Most people assume that Baby Boomers eventually downsize, but recent data shows this might not be as widespread as initially anticipated. NAHB research shows that a majority of boomers move to a 1913 square foot home, just a little larger than their current homes. According to Meyers research, the most preferred size is under 2,500 square feet.
Size Doesn’t Always Matter
For the 55-plus demographic, square footage isn’t as important as the experience of the home. “It’s not necessarily about size but getting the house right,” says Carmichael. Today, plans in the 1800 to 2000 square foot range live much larger than traditional designs. Higher ceilings, sightlines that extend beyond the interior, outdoor living spaces seamlessly integrated into interiors, and innovative storage transcend square footage. Light both natural and artificial is another essential. “Light makes everything better,” says Carmichael. Additionally, every square foot is maximized to add to the overall experience. Function is important to 77 percent of these potential buyers, while 70 percent look for more performance in their next home.
Although single family homes are preferred by 80 percent of this demographic, Carmichael says 31 percent would consider an attached home depending on price and location. Another 39 percent would consider a 900- to1200-square-foot micro-house for the right price and location.
Many Buyers Are Going Vertical
In areas where land costs are high, Carmichael points to vertical housing made possible with the inclusion of an elevator as a potential cost-effective solution for builders. For example, Meyers research found the inclusion of an elevator could boost the sales price of some products by a $100,000, which far offsets the $20,000 to $30,00 cost of an elevator. Carmichael adds most of these owners still use the steps, but they like having the option of an elevator if they needed one, even if they only use it for packages and groceries.
There’s a Two Home Solution
Another option gaining traction, according to Carmichael, is owning two homes: A smaller one in a current location and a second, larger home in a desired retirement or country setting. One in three in Meyers research respondents say they would consider buying two homes. One of the two is usually smaller, says Carmichael, underscoring the need for builders to come up with more solutions for that in-town home. The question, she says, is “how do I make those more exciting and emotional?”
Aging in Place has become a mantra for this demographic. While this phrase might give the impression that this group does not want to leave their current community and home, only 35 percent plan to stay put. Almost half will consider a move outside their area and approximately 43 percent will buy in the same area as their prior home.
Multi-Generational Homes, Targeted Communities Now Considered
An essential factor for younger Baby Boomers, who still have aging parents and adult children who might move back home, is if the home embraces multi-generational living. Multi-gen options could include two master bedrooms, or ideally a more complete space with a small kitchen and outside access. Privacy is essential to the success of these types of homes. The best, according to Carmichael, include a private outdoor space.
Communities geared toward the 55-plus group can be restricted to residents over a specific age, or they can be age qualified which means they cater to a certain demographic without limiting residents to a certain age. Many new master planned communities also include neighborhoods geared to older buyers. Along with dynamic options for homes, new communities offer a lifestyle that is slowing revamping 55 plus housing.