By: Betty Smith
Now that the home building industry can officially say that it is coming out of the housing recession, it would be a good time to assess current housing needs. The elephant in the room is and has been the 76 million baby boomers that are between the ages of 49 and 67 and looking for the perfect “nest” for their golden years. You would think with that many people either in the market or soon to be, that developers and builders would be designing and building homes and communities to attract this segment of the market.
There are a myriad of reasons why the building and development community is lagging so far behind on addressing this demographic – the most recent being the great recession that we just experienced. However that light at the end of the tunnel is not another train coming but a bona-fide demand for houses and communities that will cater to the needs of this active, affluent and eager group looking to have fun and enjoy their senior years.
With this last economic scare, we don’t know when the boomers will be able to retire. We do know that more will be working and have income, equity in their homes again and some money in their 401(k)s that will allow them to qualify for a mortgage or buy their new mini-castles for cash. C’mon builders and developers – wake up; this should be music to your ears! We have qualified buyers with money who all want new homes … but there is no place for them to go!
Of course, this is an exaggeration. There are a smattering of “Active Adult” or “Age Restricted” communities dotting our metro areas but not nearly enough to satisfy the demand that currently exists and will continue over the next 20 years. These communities have mega amenities, are the size of a small city and are built by large corporations. These are great destination offerings but the real demand is for small manageable communities located “near” all the amenities that these active boomers want. The good news for builders and developers is that mega amenities are not requirements; thus, the community becomes easier to finance and is more affordable for the buyer.
This is a win-win for both sides … affordably developed communities, in desired locations, with homes designed for the needs of this tidal wave of existing and future buyers. So let’s go, builders and developers. You’ve got some catching up to do. While the great recession was happening, there were several million more boomers getting closer to that ultimate move-down. Now, they are just waiting for you to build them their perfect community and “nest”.
By Mike LaRuffa (President, Builders Services, Inc.)
**Courtesy of Allen Tate’s Blog