With the leading edge of the Baby Boom generation turning 54 this year, the widely anticipated explosion in over-55 housing is due.
It is widely assumed that this influx of boomers — 85 million, according to some estimates — will change the face of what has come to be known as retirement living.
According to William Frey, a professor of demographic studies at the State University of New York at Albany, Baby Boomers are making the active-adult market younger.
Even if boomers move into active-adult housing before turning 55, they do not dramatically alter their lives. They continue to work by consulting or telecommuting. They also tend to remain in the areas in which they had been living.
“The difference between the Baby Boomers and their parents is that the parents were willing to defer gratification until they reached retirement age, while the Baby Boomers want it all now,” Frey said.
As a few savvy builders would tell you, the worst thing you can do is lump boomers into one group.
“If you define active adults as people who want to live in an age-restricted community, then you’ll find that `age-restricted’ is a very small part of the market,” said William Bone, chief executive officer of Sunrise Colony Co. in Palm Springs, Calif.
“The market is segmented,” he said. “It is not a one-size-fits-all, and any large builders that limit themselves to one segment will lose out.”
However, smaller builders will find a segment to build to and probably will do well as the boomer population begins searching more actively for housing, observers say.
“Baby Boomers are creating the critical mass behind the trends, much as their generation redefined consumerism,” said Cheri Meyn, president of the Genesis Marketing Group of Englewood, Colo.
“This group will make more money and inherit more money than any generation before it,” Meyn said. “The oldest segment, those 50 to 58, are now reaching their peak earning years. Almost 50 percent of them plan to work past retirement.”
Meyn insists that Baby Boomers cannot be easily pegged to products and services.
Already, changes in the market are manifesting themselves.
“The size of the communities is smaller,” said Gregg T. Logan, senior vice president of Robert Charles Lesser & Co. in Atlanta, which conducts marketing studies for active-adult builders.
“In the 1960s, retirement communities ranged from 3,000 to 24,000 units,” Logan said. “In the 1980s, when the boom really began, they averaged about 4,500 units. In the 1990s, the most prolific decade for active-adult development, the size is about 2,400 units and lower.”
For example, Del Webb Co.’s Sun City in Arizona, which opened Jan. 1, 1960, had 26,000 units when it was completed in the mid-1970s. Subsequent versions of Sun City have fewer units.
Logan said that a growing number of them are just parts of larger developments of single-family and upper-end housing, so-called intergenerational communities.
In fact, only 10 percent of the nation’s seniors live in age-restricted communities, according to the Joint Center for Housing Studies at Harvard University.
No matter where they decide to live, most Baby Boomers believe that money really can buy happiness.
Despite concerns about Social Security — a recent poll by Del Webb of prospective home buyers said saving the system should come before income-tax cuts — boomers do not view retirement with dread.
The Del Webb study found that 91 percent of boomers expected to be happy in retirement. However, their attitude about retirement was directly linked to incomes. The higher the household income, the greater the expectation for happiness in retirement, according to the Del Webb survey.
Any number of surveys have indicated that nearly half of all boomers will move from the homes they are living in when they retire.
“Because many boomers were wise enough to purchase a home early, they’re sitting on an asset that bodes well for them in retirement,” said Amy Etzkorn, director of tax accounting for Del Webb.
