Millennials aren’t the only generation to woo, especially given Boomer’s economic dominance
By MARY COOK
Millennials are the top target for many real estate developers and builders, but given the numbers, that focus may be misplaced. Baby Boomers, now 53 to 71 years-old and almost 75 million strong, not only have the longest life expectancies in history, they have more spendable income than any other generation. And whether buying or renting, much of it will go to their residences as they downsize, retire or move near family.
In fact, in light of their enormous economic power and life expectancies, Baby Boomer housing trends should be top-of-mind for all builders and real estate developers. Boomers control 70 percent of all U.S. disposable income, $46 trillion in wealth, and should inherit $15 trillion over the next 20 years, according to Forbes. Coupled with longer lifespans (the average 65 year-old is expected to hit almost 86 if male and 88 if female, according to the Society of Actuaries), the opportunities for builders and developers to service this generation are immense.
Yet, given the attention we see builders and developers lavish on Millennial housing, it’s clear they aren’t minding the stats.
Currently, housing trends show that Baby Boomers already dominate the rental market, notes new research from national listing service RENTCafé using U.S. Census Bureau data from Census ACS five-year estimates for 2009 to 2015. The report found that between 2009 and 2015, the percentage of renters over 55 increased by 28 percent (or 2.5 million households, the largest net increase by an age group), while there was only a three percent increase in renters 34 and younger.
At the same time, Baby Boomers account for 30 percent of the buying market, according to the National Association of Realtor’s 2017 Home Buyer and Seller Generational Trends report. Rather than downsizing, they’re just as likely to buy a bigger home and take out a mortgage in retirement as they are to downsize to a Florida condo, notes Curbed.
Regardless of whether they rent or buy, Baby Boomers want it all in the housing they choose, from luxe urban or suburban abodes, to a wide range of features and amenities. But from our experience designing amenities, community spaces and model home interiors for communities and multifamily developments, builders and multifamily developers must know what Baby Boomers value most to deliver housing that will achieve high occupancy rates.
Their top priorities should be:
- Building in the right location: Just like their Millennial children, Baby Boomers want to live in culturally rich, walkable cities and suburbs with restaurants, shopping, services, entertainment and public transportation nearby, notes realtor. com. Unlike Millennials, access to high-quality health care is also critical. And finally, they want to live near family, which helps explain why many Boomers want to rent; as their children move, so can they without the hassle of having to sell.
- Getting the design features right: Today, all generations gravitate to open floor plans that foster family connectivity, promote flexible lifestyles, and sport high quality, durable, easy-to-clean fixtures and finishes—especially in the kitchen and bathrooms. But Boomers favor traditional design features, such as fireplaces and moldings, and they still need those double-duty extra rooms for hobbies and leisure activities or grandchildren and guests who spend the night, notes Huffington Post.
- Designing spacious, maintenance-free housing: Even though Boomers are downsizing, space and maintenance-free living are their holy grails. They want room to entertain friends and family (especially grandchildren), pursue their hobbies, and often can afford to pay for that space. And they want services that make the space easy to live in, from building or community staff that handles deliveries, and guest access to maintenance systems that take work off their hands.
- Packing in the right amenities: Boomers, by an overwhelming majority of 79 percent, value secured community access more than any other amenity according to real estate law firm Goulston & Storr’s 2017 Multifamily Real Estate Amenities Survey. With friends, children and grandchildren nearby and dropping in, family-friendly features are important too. Boomers want indoor and outdoor communal areas, lounges, fitness centers, play rooms, pools and more that allow them to extend the boundaries of their homes when they entertain. They still want their cars nearby, even if they’re not driving that much, which explains why 85 percent of Boomers ranked parking spaces their second most valued amenity in Goulston & Storr’s research. And finally, they need storage space, often for car seats, bicycles and spare cots; extra storage space is also a hot commodity for Boomers, notes Goulston & Storr.
- Adding amenities that wow: Boomers value sophistication and exclusivity, and will often pay more for these luxury features, notes Huffington Post. These include valet parking, concierges, limo shuttles, driving ranges, club-like activities in community centers, on-call chefs, and temperature-controlled wine rooms.
By 2029, all Baby Boomers—who amount to 20 percent of the country—will be 65 or older, notes Inc. The current housing supply is inadequate to meet their needs. Builders and developers should target this market now, and make sure their projects incorporate the features they want and need to spur conversion.
Mary Cook is the founder and principal of Mary Cook Associates (MCA), a full-service commercial interior design firm. She may be reached at www.marycook.com.