Homebuilders and many housing analysts have been thinking about the evolving housing needs of the 55-plus age group. The size of the group commands special attention alone: Baby boomers (born between 1946 to 1964) stand at 76 million and are on the brink of a housing change in the coming years. The housing industry wants to be ready.
For the first time in U.S. history, older Americans will outnumber children by 2035, according to U.S. Census Bureau data. They already hold nearly two-thirds of home equity nationwide.
But what type of housing will they be drawn to as they age? That’s the question builders are trying to be proactive about.
Some are banking on a draw of age-restricted communities for the 55-plus community. The draw is already there, says one homebuilder, PulteGroup. When Pulte first opened its active adult brand Del Webb Bexley in Tampa, Fla., more than 800 prospective home buyers showed up to land one of 850 available homes. The open house reached capacity in mere hours, and the builder expanded its 55-plus offerings lineup in response.
The retirement community of previous generations is not going to work with this generation, however, builders say. Large tracts with thousands of units are still part of the 55-plus new-home market, but many today are designed on a smaller scale. They’re focused on inclusive social activities too, with fewer golf and country club–type amenities and more restaurants and pickleball-like setups. Developers are using the “active adult” label but are catering their spaces so that they can accommodate a variety of ages in a community—grandparents, parents, and grandchildren. Brands that cater to this age group are also being launched away from just resort communities.
“When it comes to serving the boomers, one size does not fit all,” Char Kurihara, vice president of sales and branding at Elevate Homes, told BUILDER. “Builders should recognize the need to offer multiple products and communities for these buyers.”
It’s a growing business for homebuilders: 44 of BUILDER’s top 100 building firms now have at least some of their revenue from an active adult product line; 13 say 25% or more of their annual sales are tied to this age segment.
“There are really two groups of people to focus on right now when it comes to building new homes: millennials and baby boomers,” Jeff McQueen, division president at Shea Homes, which offers the Trilogy brand, told BUILDER. “But millennial household formation has been delayed, so, the other option is boomers. There’s been a huge pivot in the last five years, post-recession, where builders are now offering a single-level plan in almost all communities that cater to an empty nest buyer. Whether they call it active adult housing or not, they’re selling to more and more active adult customers.”
Source: “Builder 100 Firms Are Banking on Baby Boomers,” BUILDER (May 13, 2019)
