Will Senior Housing Sales Help Revive the Market?
In any given year, about 12 percent of 55-and-older households change homes, according to a study done by the MetLife Mature Market Institute with the National Association of Home Builders.
The study also found that seniors make up about 20 percent of the homebuying market, and that 24 percent of seniors looking for homes want to buy a new home. Of those seeking a new home, 30 percent want a new custom home.
So what does this mean for older homebuyers?
While the study found that many of the 78 million baby boomers will choose to age in place, there is large and growing number -- more than 1.2 million each year -- who choose to move to a community that better fits their retirement needs.
The study still expects demand to remain weak through 2010, but expects more than 1 million sales of existing family homes will be to 55-plus households and 174,468 housing starts will be for senior dwellings.
These numbers were echoed during a recent meeting of the Fort Worth Commercial Real Estate Women, where Charles Bissell of Integra Realty Resources said that while the U.S. population is forecast to grow by just 1 percent between 2010 and 2020, the 65-to-74 age group -- a segment of the baby boomers -- is expected to grow by 4.2 percent in that same period.
"The way I've heard it best put is that every day in America, 6,500 people turn 62 years old," Ryan Maconach of the ARA National Seniors Housing Group told the luncheon participants. "And that means a lot of opportunity in this market."
So what are seniors looking for in housing?
"The baby boomers' influence on housing choices has been profound, and will have a huge impact on trends in housing for the mature market as that age group continues to move toward retirement," said Sandra Timmerman, director of the MetLife Mature Market Institute. "Some findings, such as the tendency for buyers in 55-plus communities to continue to work in greater numbers and for longer periods of time, show us that this group is redefining the traditional notion of retirement to suit their lifestyle choices."
The institute found that 55+ buyers and renters want large homes. Seniors want homes with an average of about 1,800 to 2,300 square feet. While many move to be closer to family or friends, the design and look of the community, as well as the look and quality of the home, were key factors.
Some other key findings by the Institute:
- Proximity to work is important for 55+ households. In fact the proximity to work climbed from 11 percent in 2001 to 17 percent in 2007, as the primary reason for choosing a community among age 55-and-over movers into single-family detached homes. More also are working from home. That number climbed from 6 percent in 2001 to 13 percent in 2007.
- Active adult communities also are attracting younger buyers (age 60 and under).
- In cases where women are heads of households, they tend to look in the multi-family and age-restricted rental market.
- Age-qualified communities attract college-educated seniors. In the past six years, the number of seniors with some college that moved into age-restricted communities jumped from 50 percent in 2001 to 73 percent in 2007.
The future looks bright for senior housing; the real question is when. Certainly time for retirees isn't standing still.
Lita Epstein has written more than 25 books, including "Working After Retirement for Dummies."
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