Boomers Retirement Housing Surprises

The Baby Boomers surprised forecasters as they went through life, and they changed many aspects of the economy. It looks like they have another series of surprises in store.

The Boomers’ choices of retirement homes might be very different from what many people are expecting. These choices are important not only to those who build retirement homes. They are important to everyone who will buy, rent, or sell a home. The Boomers are such a large portion of the population that their choices will determine the prices of different types of housing.

Current and recent retirees often did not move in retirement. A high percentage of them remained in the same counties they lived in before retirement. Those that did buy second homes or move in retirement sought a particular type of housing. The most sought-after retirement communities for the past couple of decades were golf course communities. There was a building boom in such communities, which continues. In many minds, retirement is associated with a planned golf course community.

Things could be changing. There is evidence that the Boomers are less likely to seek the now-traditional golf course retirement community.

The new evidence comes from a study of the early Baby Boomers conducted by the ProMatura Group and recently presented to the annual convention of the National Association of Home Builders.

Here are some highlights from the study:

• Second home prices are likely to continue rising. More than 50% of homeowners ages 45 to 54 said they were likely or very likely within the next 60 months to buy a vacation, investment, or new primary home. Almost 60% of those ages 55 to 64 said the same. 

  Whether those goals will be fulfilled depends on interest rates, home prices, and income. But for now it means a lot of the early Boomers are looking either for a new home in retirement or for a second home that will ease the transition into retirement. If the numbers bear out, more Boomers than previous generations are likely to move in retirement or split their time between two or more homes. This information also means that second home prices are likely to remain strong.

• To what type of homes will the Boomers move? Here is another area where the Boomers say they differ from their predecessors, and this could have a major effect on prices of some types of housing. 

  Almost half the early Boomers say that they are likely to move into an “active adult” community, and about 20% say they are considering an age-restricted community. These numbers are significantly higher than the numbers for prior retirees, and about double the number from a survey done only five years ago.

• The Boomers revealed that they are looking for planned communities with active lifestyles, fitness, and social activities. But the details of those communities are likely to be different from those of previous retirees. 

  The Boomers are not likely to be as attracted to golf course communities as prior retirees were. Only 1.7% of those 55 and older said they were likely to purchase a home on a golf course, and only 5% said they wanted a view of a golf course.

• Boomers also do not same as eager to flock to homes in or near salt water. Again, only 1.7% described themselves as highly likely to buy on the oceanfront, and only 6.8% want property with a view of salt water. 

  Instead, 25.5% of those 55 and over said they would like to end up on or with a view of fresh water, such as a lake or river. The Boomers said they would like views of trees, grass, and fresh water, but on non-golf course green space. They prefer parklands and common areas in planned communities.

  Of course, it is possible that most of the Boomers believe that they cannot afford golf course or ocean front homes. Whatever the reason, a large number of Boomers say they are not likely to live in such places.

  One priority of the Boomers is a fitness center. Almost one quarter of those surveyed ages 55 and older want to be within walking distance of a well-equipped fitness center.

  Restaurants also are more important to Boomers than to most homeowners. About 15% of those 55 and over want to live within walking distance of ?fine restaurants.?

• Downsizing also might be a feature of Boomer retirement communities, at least to a point. The Boomers said they could be content with less living space than they have now. But they also say their housing must be high quality and should have three bedrooms. Top-notch kitchens, bathrooms, entertainment centers, spas, and other features are what Boomers want to see in their retirement real estate. 

If you are planning to buy a home in the next few years, whether it is a primary residence or second home, keep this study in mind. Seek the features Boomers say they want.