This year, the first of the baby boomer generation becomes senior citizens. But don't expect them to start acting old anytime soon.
Data derived from the 2000 U.S. census shows that about half of the baby boomers will enter old age fairly well heeled. Described as "yuppie elderly," these boomers are in good health and have high disposable incomes. About half are married. More than 83 percent own their own homes, and 39 percent have retirement incomes greater than $25,000 per year. They are expected to set aside typical notions about how seniors live as they enter their sunset years.
Instead, studies show an ever increasing majority of Americans age 55 and older want to work as long as they are able and want homes that are larger and more luxurious than seniors have traditionally wanted.
"Today's senior wants a large airy home with high ceilings, upscale appliances, and a low-maintenance exterior," says Annie Gerard, vice president of senior housing for National Survey Systems. "This trend began in the early- to mid-1990s when seniors began to indicate they don't want cheap little houses anymore."
"We're looking at an aging boomer population of 78 million, most of whom feel they deserve a large, plush home," explains Leon Harper, senior housing specialist at AARP. "And most of them don't want to move to warmer climates. They want to stay where they are, near their families and friends."
Some national builders have recognized this trend and are building age-restricted communities in and around major cities in the Midwest and Northeast. But studies show an increasing number of seniors don't want to live in active adult communities.
A recent survey of 800 baby boomers by Del Webb, creator of active adult communities, found that compared with earlier retirees, aging boomers want more challenging retirements where they continue to work, start new businesses, increase their knowledge, and establish new goals. They put a priority on being debt-free and want lots of disposable income. The study found that income levels of boomers are at least a third higher than their parents' generation.
Both ways
"Today's senior appears to want the best of both worlds," says Leslie Marks, of the Seniors Housing Council of the NAHB. "They want the gated communities and the guards, but they don't want to live exclusively with people their age. The bottom line is that the baby boomers just don't consider themselves old and probably never will."
All of this provides a dilemma to production home builders as they must determine how to build for a growing senior population that seems to not want what their predecessors wanted.
"Del Webb has built in the Chicago metro area, and many national builders are right now considering some sort of age targeted housing, if not age restricted housing, for the Detroit metro area," says Brooke Warrick, a demographer with American Lives, a market research firm based in Oakland, Calif. "The smart builder is one who is building retirement-style communities in the rust belt and in Arizona and Florida," Warrick says.
Builders must be prepared to build top-of-the-line housing that offer the best appliances and other upgrades in order to attract aging boomers, Warrick continues.
"Studies show that seniors today want homes that have anywhere from 1,800 to 2,200 square feet. That's a far cry from traditional retirement housing that averaged 1,200 feet," Warrick adds.
Small lots
While seniors increasingly want larger homes, that doesn't mean they want a large lot to go along with it, Gerard says.
"The ideal home for today's seniors has plenty of natural lighting and views into courtyards and out onto nicely landscaped areas, but it doesn't have large lawns that have to be kept up. Seniors want to see the outdoors and even bring it closer to them with more windows and skylights and that sort of thing. They just don't want to have to maintain it anymore," she explains.
Another phenomenon is the exodus of seniors from high-cost-of-living markets like Southern California to non-traditional retirement areas. "We're seeing more and more equity refugees who are cashing out on their homes in Southern California and moving to nearby states where they can get a lot more home for their dollar," Gerard says. "Seniors are moving to Nevada, Idaho, Oregon, and Utah--not places traditionally associated with senior housing."
With discount carriers like Southwest Airlines offering reasonable air fares, many Southern California retirees would rather move and fly back to visit friends and relatives whenever they want, Gerard says.
Assisted shakeout
Another casualty of the emerging senior housing market could be many of the assisted living centers that have popped up throughout the Midwest and Northeast, says AARP's Harper.
"A lot of companies decided to jump into assisted living centers because they saw a huge influx of people about to enter the ranks of senior citizens. But what they did not seem to take into account is the greatly improved health of today's senior. Our studies show we now have a glut of assisted living centers scattered around the nation. We expect to see a consolidation of the companies offering assisted living through mergers and buyouts," Harper says.
Today's senior is much healthier and will live far longer than his predecessors, says John Burns, vice president for published research for The Meyers Group of Irvine, Calif. "They are in better shape and are looking forward to more time to pursue their hobbies in retirement," Burns says.
