As an aging baby boomer, it’s hard to get find love from the consumer products sector.
All the mainstream advertising is pitched toward 20 and 30 somethings.
The only nod we boomers get is from hearing aid manufacturers and ED drug makers trying to stiff us out of our retirement savings.
Well, bless the homebuilders.
They’ve spent the last few years courting those fickle millennials and have now decided to dance with the ones that brung them – the 50-plus generation.
We boomers are da bomb when it comes to the builders.
We’ve got money and experience and know what we want in a house.
And the U.S. housing industry is ready to sell it to us.
The numbers of 55-plus homebuyers are increasing as America’s population ages.
By 2020 there are forecast to be 54 million 55-plus households in the U.S. – up by almost 4 million from 2016, according to studies by the National Association of Home Builders.
“Its growing and projected to grow every singe year,” said Paul Emrath, a senior researcher with the Washington, D.C. based builders group. “Not only are they growing in absolute numbers but as a share of all households.
“The 55-plus segment is on the rise as a share of the overall market.”
As these folks move kids out of the household and move into retirement, a large number are looking to change their address.
Often they have money from the sale of current homes to pay for new digs.
“Almost half of them are owned free and clear after a year,” Emrath said. “This is a segment of the market that’s paying cash.”
And even when they don’t, boomer buyers typically make much larger down payments than younger households.
In the Dallas-Fort Worth area, the NAHB estimates there are more than 13,000 sales of homes to 55-plus buyers a year.
On average these buyers spend about $246,000 for a house. And they have annual household income of more than $109,000.
A share of the North Texas boomer buyers are coming from out of town. The NAHB estimates that more than 10,000 55-plus households migrate to the D-FW area each year – mostly from other locations in Texas, from California, Colorado, New York and abroad.
“Almost every area has a sub 55-plus market that s driven by people who move short distances,” Emrath said. “A lot of 55 plus households move from neighboring states or the same states.”
Jim Chapman, a Georgia builder who heads the NAHB’s 55-plus building council, said that since home values around the country have recovered from the recession, more of these buyers have the equity to make a move.
His average buyer is in their early 60s, Chapman said.
“Ten years ago when I started building active adult communities our average age was probably 72,” he said. “About 20 percent are moving to be near the grandkids.”
Both Chapman and Emrath said the biggest obstacles for builders who want to woo boomers is producing a house they can afford.
“I’m constantly asked if you have anything under $250,000,” he said. “Our average home is $400,000.”
Emrath said that a third of baby boomer buyers say they want a house priced under $150,000.
“There are virtually no homes built at those prices.”
So just like their millennial counterparts, boomer buyers are finding that home cost is the biggest issue in making their move.