I have heard many terms for the next generation of older adults, such as 55+, seniors, active adults, and just plain baby boomers. Over 75 million strong, this generation born between 1946 and 1964 are changing the housing and economic landscape of our country. Now between the ages of 54-72, baby boomers are entering the next phase of their lives…retirement…or are they? Boomers pride themselves as active adults wanting quality in their remaining years verses quantity. Over 65% plan on working beyond retirement and most plan to age-in-place verses moving to warmer climates. They want to stay near family and continue to engage in their communities. These choices have profound effects on the future landscape of housing; either in retirement apartments/communities or single-family homes purchased with the goal of right-sizing.
Given these facts, what will be the likely choice for today’s post World War 11 generation? Many studies show that most baby-boomers who decide to move from their long-time homes will want either luxury apartments on one level or a single family one level ranch home. Most prefer under 1,900 square feet, verses today’s millennials preferring over 2,400 square feet. It is critical to these would-be buyers to have a full bath and master bedroom on the main floor. Basements are optional. Over 63% would prefer new energy efficient homes on a quiet street. The intention of moving is to find an environment that would support a busy lifestyle and support a quality life.
In the next 5 years, baby boomers who compose 25% of the U.S. population will control 70% of all wealth and over 50% of discretionary spending. Therefore, builders and owners of senior apartments and communities will be paying close attention to the buying habits of the 55+ boomer. There are currently planned retirement communities such as “The Villages” in Florida where single family ranch homes are surrounded by activity and hobby venues such as golf courses, and numerous hobby clubs. However, here in the Milwaukee-Metro area, I believe this type of 55+ housing is far behind many parts of the country. When I receive a call from an active baby boomer looking to ‘right-size’ into a single-family home strictly zoned for 55+, the choices are almost nil. There are very few if any gated communities to choose from currently. However, builders are beginning to see the opportunities to cash in on the future desired housing for our current 54-72-year-old population. I am quite confident that new condominium developments will begin to flourish in the coming years. Most homeowners that I deal with, who are considering purchasing a condominium, request a side by side ranch with attached garage, two bedrooms and an office, and full basement. Avoiding stairs is critical, so also having the laundry on the main floor is a must. Those choosing not to purchase with the goal of freeing up equity in their current homes are choosing communities that are supporting their active lifestyles. Again, one level being critical.
The future boom in new construction will mirror the hopes and desires of our 75 million baby boomers. You will see senior single-family condos and homes populate all communities in the coming 5 years. These projects will also be supported by activity centers as well as medical services. The expectation for our mid-west retirees to move to warmer climates will be the exception not the rule. This is a 360-degree shift from previous thinking. The past recession has caused a shift in thinking from lives of travel to a more family-centered lifestyle. Being near grandchildren and extended family has become the norm and will determine the future housing markets of the future. Not a bad trade-off when you think about our millennials who will be needing more help and guidance from parents and grandparents. I am optimistic about our future family-centered housing and love for community. Baby boomers have shaped our economy and social fabric ever since our valiant soldiers returned from World War 11. I thank them for their sacrifice so that my generation of boomers can create a better world for the next generation, almost 80 million strong…our millennials and our grandchildren. I know that our housing markets are so critical to the future of our society and that real estate has and always will be at the center of a healthy thriving community!