When I was teenager, my recently widowed maternal
grandmother sold the home she’d shared with her husband for many years, and
moved to the safety and security of Seal Beach Leisure World, one of the first
age-restricted communities built by Ross Cortese in the early 1960s.
However, this was a move my paternal
grandmother didn’t quite understand at the time, as she much preferred aging in
place and living out her own life in a classic neighborhood of more mixed
demographics.
Since both grandmothers
made the right decisions for their own circumstances, it made me wonder:
where will the Baby Boomers live, and in what
numbers?
If you asked this question in the late 90s, as the stock
market was rising and pensions were swelling, many Boomers envisioned a leisurely
retirement filled with ocean cruises and vacation homes.
Fast forward to 2012, however, and given a
combination of fewer pensions, a housing market in the beginning stages of a
rebound, and individual investors who largely missed out on the latest stock
rebound, for many Boomers the new plan is to work longer and either downsize to
a smaller, more manageable home or simply age in place.
But that still means plenty of opportunity
for both builders and remodelers.
Fortunately, Pulte Homes’ Del Webb subsidiary, which has
long had its own army of market researchers, has been conducting its own Baby
Boomer survey since 1996. For these
surveys, the company separates out younger Boomers (those turning 50 years of
age in the next year) and older ones (about to turn 64), and separates them
into four groups: younger Boomers, older
Boomers, boomers who were 50 in 1996 and were about to turn 65 in 2010, and
current residents of Del Webb communities, most of whom were age 60 to 76.
Some of the differences between the surveys of 1996 and 2010
are striking. Compared to 50 year-olds in 1996, today’s younger Boomers plan to
retire four years later (age 67 vs. 63) and are half as likely to be prepared
for retirement (16% vs. 34%).
Over four
in ten think they’ll never be financially prepared to retire, and nearly four
in ten haven’t started to save for it.
Consequently,
72% of young Boomers plan to work, but that’s actually pretty close to the
rates for older Boomers (74%) and Del Webb residents (70%). Still, the reasons
for continuing to work aren’t just financial – they also include keeping busy
and self-satisfaction. Nonetheless, just 40% of current retirees are actually
working, but this rate may rise along with the growing acceptability of home
offices.
The most consistent response to these surveys was whether or
not to move: over one-third of
respondents in all four groups – or just over 26 million people -- plan to move
during retirement (the rate is even higher at 42% for young boomers). Of those planning to move, half think they’ll
move to a new state.
Not surprisingly, when considering age-restricted
communities, older Boomers prefer the option by 2-to-1, and existing Del Webb
residents favor a similar community by a factor of 10-to-1. For younger Boomers still wearing skinny
jeans and going to rock concerts, however, less than 10% of them are interested
in age-restricted options.
For both younger and older Boomers, cost of living and
healthcare remain by far the most important considerations when choosing a
retirement home (Del Webb residents added ‘amenities’ to that list). Other important factors for all groups
surveyed included a better climate, being close to children and grandchildren,
and networking opportunities.
Interestingly, the idea that retiring Boomers would depart
the suburbs in favor of the hustle and cultural options of cities has not yet
been supported by census data.
Recently,
Forbes magazine, with the help of demographer Wendell Cox, compared population
numbers for Boomers ages 45-54 in 2000 and compared them with those ages 55-64
in 2010.
During that ten-year period,
cities actually lost over 10% of these urban empty nesters, and the rate of
decline was even higher (12%) for older retirees ages 65-75.
What this data suggests it that both of the choices selected
by my grandmothers are expected to remain popular in the years ahead. Although the Del Webb model will always have
its fans, builders can also benefit from addressing those Boomers who choose to
stay in place – if not in their existing home, at least in the same community.
In turn, the apocalyptic future of suburban ghost towns in favor of city living
will likely turn out to be just a fantasy.
Please click here to see the edition of BuilderBytes for 10/31/12 on the Web.
