Seniors who have been itching to trade the old home place for some new digs may get the chance now that the housing market is recovering.
At least that’s what builders hope.
They are ready to build a new generation of housing aimed at seniors and aging baby boomers — not the huge retirement golf course developments of yesteryear, but smaller, age-restricted suburban subdivisions.
During the economic crash, many of these potential buyers put their plans on hold when their houses wouldn’t sell or they lost equity.
But with housing values on the rebound, homebuilders are sharpening their marketing efforts aimed at buyers older than 55.
“We think this is the housing segment that is going to lead us out of recession,” Don Whyte, a Utah builder, said recently at the housing industry’s annual meeting in Las Vegas.
“We are seeing the traffic from these buyers is up, and shoppers are coming around looking at houses again,” he said.
The National Association of Home Builders is predicting an almost 25 percent increase in home starts this year for properties targeted at 55-plus buyers. And next year, construction for this market will jump almost a third.
“This is a growing share of the market, just in terms of the underlying demographics,” said Paul Emrath, an economics researcher with the builders association.
Currently, about 42 percent of U.S. households are made up of 55-plus residents. By 2020, that number is forecast to grow to almost 47 percent.
John Sheleimer, a housing researcher from Northern California, said there are 79 million U.S. baby boomers, and almost 80 percent already own a home.
“We are the wealthiest consumer segment in the housing market,” Sheleimer said. “We have money to buy homes if we can sell our home at what we think it is worth, and that is also improving.
“We are starting to see the home equities come back,” he said. “We are starting to see people feel they can sell their home and move equity to buy a new home.”
Home starts for 55-plus buyers should total about 150,000 units this year, the builders predict.
The recession froze sales of homes to seniors in many areas of the country, builders and economists say, and there is pent-up demand.
“We have had a delay of several years where boomers and seniors didn’t move,” said Bob Karen, a Maryland builder. “In our sales offices, we now see an absolute change in this consumer’s behavior.
“They are coming in with lots more optimism and not as depressed about selling the homes they have,” Karen said.
Now that older buyers are thinking about moving again, builders are trying to figure out what type of housing they want.
New research shows that most still want to live in the suburbs, with few opting for central city locations.
But they are less interested in the huge “retirement” communities that were developed in past decades.
“The days of the mega master-planned community with four clubhouses and 27 golf courses are dead,” said Sheleimer.
Instead, the 55-plus buyers are looking at smaller age-restricted subdivisions close to traditional housing.
Most of those buyers also aren’t interested in drastically downscaled housing, Sheleimer said.
“Many 50-plus buyers do not want to downsize to 1,500-square-foot or 1,200-square-foot homes,” he said. “We have lots of stuff.”
While aging buyers may not want golf courses, that doesn’t mean they aren’t interested in community amenities.
Developers are building walking trails, fitness centers, swimming pools and clubhouses in most of the successful projects.
“The exterior amenities are just as important as the interior,” said Andrew Wong, of Pulte Homes, one of the country’s largest builders of homes for 55-plus buyers.
Wong said Pulte’s homes aimed at boomers and seniors are as large as 3,000 square feet.
“These buyers might still be working, or they could be retired,” he said.