As Chuck Shinn has discussed many times in his webinars, the building community has been following the baby boomers through their home buying life cycles over the last 40 years. With 78 million boomers, it was clear that this was the generation that would define the market. When they bought their first home, builders had to be there; as the generation started having families and moving into larger homes, many builders changed their focus from starter to move up products to meet the demand. Now, this generation is preparing for retirement. So it only makes sense that we should follow them through the next phase of their life cycle as well: retirement housing and active adult communities.
Chuck has said that the larger Millennial population (Gen Y, aged 15-30) will be the next major drivers in the market. But we all agree that there is still a strong market for the builders in the 50+ market as long as we understand who we are building for.
In a recent survey conducted by NAHB and MMI (MetLife Mature Market Institute) entitled “55+ Housing: Builders, Buyers and Beyond” there were several key findings. It was most interesting to note that the amenities and features the buyers were looking for in a new home did not necessarily match exactly what the builders believed the buyers wanted. The next most significant point was that the potential buyers in the market have decreased significantly, since the majority of this population (approx. 63%) plan to stay and age in their current homes. The main point of these two observations is that if you are building homes for this demographic, it is crucial you understand who the buyers are and what they are looking for, so that they will be motivated to buy your homes.
Many of the buyers out there are actually looking for homes and communities that: require less maintenance and repair work; are located closer to family; and ultimately are quite a bit different than the retirement homes of the past. Interestingly, this study also found that often there were differing levels of disconnect between what the building community felt was very important to include in the features and designs vs. what the surveyed population felt was very important. For example, the building community believed that the buyers wanted wider doors and wider hallways and levered hardware. However, when surveyed, less than 50% of this group (surprisingly) rated these as important features. This could mean that the builders are designing features into the homes that buyers may not appreciate, but I believe it could really mean that there is an opportunity for the building community to discreetly educate the buyers about the practical benefits of these and other Universal Design features as they age, and thereby differentiating from the competition.
The study found that builders could be leaving out features in their homes that buyers are ultimately looking for. Understanding the optimal feature mix and highlighting them in your homes could make all the difference in beating the competition for the buyers who may be out there. So, what does the +55 buyer want? Here are a few examples:
As we follow this buying demographic into retirement, I would highly encourage you to make sure you understand what it is that will stand out to them when they visit your homes and / or community. Conduct your own studies, ask questions, add in the features of value and reconsider whether to include features that are not as important. Find the balance between standard features that allow a desired entry price and options that encourage the sales force to educate the buyers. You may be able to find some cost savings while still creating the most desired homes for this group.
Phil Fingerhut and Shinn Consulting can provide services to support builders with their efforts in these areas. For more information, visit www.shinnconsulting.com.
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