WE'RE USUALLY SKEPTICAL ABOUT MARKET research reports that lead all too conveniently into a packet of sales material. However, two new builder-sponsored studies released in recent weeks offer some credible and worthwhile insights into what affluent households and aging baby boomers are thinking these days about their future home plans.
The first study, released by Centex Homes' Destination Properties unit in mid-June, surveyed households earning $125,000 or more to gauge the emerging demand for second homes and vacation properties. The level of interest, according to the 15,000 households that responded, was stronger than expected. Within the past year, 63 percent took some action to investigate second-home ownership, whether talking to a spouse about it (51 percent), requesting literature (25 percent), talking to a salesperson (21 percent), or actually visiting a second-home/vacation community (19 percent).
Builders may be guilty of overplaying the potential of the second-home market. But few deny that what was once the realm of the well-to-do—and mostly custom home builders—has expanded into a significant market segment of households for whom the American dream now means owning a second home.
The numbers are hard to ignore. According to estimates from Claritas, a market data specialist, the percentage of households headed by 35- to 64-year-olds earning more than $125,000 a year is expected to grow from 5.8 percent of the U.S. total in 2000 to 8.1 percent next year and 11.4 percent by 2009. Worth noting is that about 30 percent of those surveyed in this group were Gen Xers younger than 40. Among Centex's findings:
That Centex created a unit three years ago to focus on second-home markets is but one indication of how builders are moving aggressively to carve out a market expected to double by 2009. Centex won't be alone.
The second study, from Pulte Home's Del Webb division, explores how 1,174 U.S. residents ages 40 to 70 feel about entering the “empty nest” phase of their lives. It found that while 36 percent of baby boomers plan to move to a new home when they become empty-nesters, fully one-fourth of boomers expect their adult children to move back in with them at some point; and another fourth anticipate that their parents or in-laws will also move in with them. The implications are significant: Baby boomers (ages 40 to 58) are more than twice as likely as those ages 59 to 70 to prefer homes and communities that can accommodate multigenerational and unexpected lifestyle needs (see “Empty Nest Insights” ).
Both studies point intriguingly toward a future where new home construction will be increasingly driven by a new set of lifestyle rules. And it's clear that future is arriving fast.