ORLANDO, Fla. – For decades, baby boomers fueled the U.S. housing market, buying everything from starter homes in the 1970s to move-up manses in the 1990s.
And while boomers are past the prime homebuying age, builders aren’t ready to give up on them — even if the numbers of 55-plus buyers coming through their doors haven’t met rosy expectations.
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“We have a very large demographic that would like to purchase new homes that better suit their lifestyles,” said Sharon Dworkin Bell, senior vice president of the National Association of Home Builders.
But like everyone else, boomers are having a tough time overcoming worries about the economy, obtaining home financing and, most important, selling the houses they have.
Still, the national homebuilders’ association, which held its annual meeting last week in Florida, is predicting more than an 18 percent increase in nationwide starts for 55-plus buyers this year. The U.S. market for these homes is forecast to grow more than 25 percent in 2013.
“As you talk to builders at this show, you will hear some optimism,” Bell said. “We think the 55-plus housing market is beginning a gradual recovery that will continue over the next few years.”
There are signs of such a turnaround.
In the Dallas area, the top new-home development in 2011, Del Webb’s Frisco Lakes, aimed at older buyers. Last year, there were 178 home starts in the Denton County project.
Utah homebuilder W. Don Whyte is sticking with the older buyer market because he knows that the millions of baby boomers will eventually make a move toward new housing.
“We are going to have more people in that market than we ever have had and coming in at an accelerated rate in the next 10 years,” Whyte said. “This market segment is growing.
“And builders who have built for this demographic historically have been successful even through this tough time.”
BUYERS AWARE
Builders who are used to selling to younger and first-time buyers may find boomers more of a challenge.
“This is a demographic who does their homework,” Whyte said. “They come into a sales office and in many cases know more about the product than the person selling it to them.
“You need to design a product that meets their needs like a rifle shot.”
That’s because most boomers are already doing pretty well when it comes to housing.
“They have lived in their home for maybe 20 or 30 years,” Bell said. “They are comfortable.”
With the recession and falling home values, many boomers who would have downsized and moved to newer houses have been forced to cool their heels.
More than 80 percent of 55-plus buyers surveyed by the builders’ association said they fear they can’t sell their current home. Still others think prices in their markets will fall further.
In many cities, it may take years for home values to recover.
But builders are pleading a case for boomers to move sooner than later.
“We work real hard on creative financial solutions because people have seen the value of their homes decrease,” builder Chris Gamvroulas said. “We tell them you may be selling low, but you are also buying low now.
“Some people get that, and some people don’t.”
EMPHASIZE EXTRAS
His firm, Ivory Homes, takes extraordinary efforts to close the deal.
“We clean, pack and move them into their new home,” he said. “That’s some of the creative things we’ve had to come up with in this demographic.”
Delaware homebuilder Preston Schell said 55-plus buyers will spend more money on a house and want more features.
But be careful how you style things, Schell cautioned.
“Retirees and active adult buyers do not consider themselves old,” he said. “Do not make the mistake of indirectly or directly treating them that way.”
And these buyers demand features that some builders may not consider a top priority.
“It’s not so much what they do, but what they think they will do,” Schell said. “Fitness and having a gym in your community center is important.
“Everybody plans on starting their fitness program tomorrow.”
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