Baby boomers are an unprecedented generation in many ways, including how they continue to shape the way Americans live and age. There are an estimated 50 million Americans aged 65 and over, while the youngest members of the baby boomer generation won’t turn 65 for another 10 years. According to Pew Research, 10,000 people retire every day.
That means more Americans will look to active adult communities during their retirement homebuying process than ever before. But, what drives so many people to active adult communities?
The 2019 55places National Housing Survey asked over 2,500 potential and recent homebuyers interested in active adult communities about what they look for in a home, community, and real estate agent, as well as other relevant aspects of the homebuying process.
The responses bucked commonly held beliefs of a changing retirement landscape, but they also hinted at a greater shift towards newer destinations, home preferences, and lifestyle choices, even if those trends happen over decades and not years.
Who are the respondents?
In terms of the homebuying process, 39 percent are not planning on purchasing a home in the next 12 months. On top of that, over 40 percent of users started their online home and community search 12 months or more before they expected to purchase a home.
There’s a common thought that states with more moderate climates are growing in popularity among retirees, but the list of desired states to move to remains static. Florida is the top answer at 19 percent, while New Jersey came in at nearly 10 percent, and California 9 percent. Arizona was next, just under 7 percent, and Pennsylvania was the fifth most selected at 5 percent. Despite that, there is expected to be growth in non-traditional retirement states over the next decade.
What are they looking for in a home?
The housing survey found that one of the most important aspects of purchasing a home in a 55+ community is single-story living. 48 percent of respondents marked it as the most important feature in their new home, while having a garage came in at 45 percent, and a modern kitchen received 35 percent.
While downsizing was the second highest reason for moving, the definition of downsizing appears to be different than what traditionally comes to mind. Almost 73 percent of respondents currently live in a single-family home, while 66 percent said they want their next home to also be single family, eschewing traditional downsizing options like condos and townhomes.
When it comes to price, respondents were split on how much they expected their new home to cost compared to their current home. 25 percent expect it to be about the same, while 23 percent and 22 percent said slightly less or much less, respectively.
When it comes to financing, paying cash or using a traditional mortgage are still the preferred methods; 43 percent said they would pay with cash, and 44 percent would go with a fixed-rate mortgage. Only 2.6 percent of respondents planned on using The 62+ Loan™ or HECM for Purchase loan on their next home. Despite the benefits for many active adult buyers, there’s a clear lack of visibility for the HECM for Purchase loan.
What are they looking for in a community?
The five most desirable amenities in a future community are a fitness center, an outdoor pool, a gated entrance, outdoor trails, and an indoor pool. In terms of lifestyle, the top five clubs and activities were travel clubs, health groups, athletic clubs, cards and games, and arts and crafts.
Interestingly, an age restriction doesn’t seem to be as important to respondents as a community’s amenities and lifestyle. 35 percent say an outgoing, social community of like-minded people describes an active adult community, compared to 26 percent who simply say an age restriction defines active adult community.
Even more telling, 56 percent of respondents said they would live in either an age-restricted or all ages community if it had the home, amenities, and lifestyle they desire. Less than one percent said they would only move to a community with an age restriction.
What does it mean?
Much of the conversation around active adult communities over the last few years has been about changes. Changes in lifestyle, amenities, and most notably, location.
Del Webb, a popular active adult builder in the U.S., only just opened their first community in the Tampa area in over 50 years. In that time, they opened several communities in less traditional retirement states like Indiana, Michigan, and Minnesota. Despite this, the 2019 55places National Housing Survey indicates that while change is happening, it’s at a steady pace.
Besides changes in popular retirement locations, the next few years should see several other types of changes.
“More and more people will seek out non-traditional active adult communities. Meaning, we’ll see the popularity of more intimate communities of several hundred homes or less continue to pop up closer to larger population centers.” – Bill Ness, 55places CEO
Then, there’s the emerging 55+ rental community option, which offers locations in urban areas with the same types of amenities and lifestyle options active adults desire from traditional communities.
“More active adults will seek out 55+ apartment home rental communities such as those offered by the Overture and Solea brands. These communities offer all the benefits of an active adult community but without the hassles of homeownership, plus they’re closer to city centers than traditional active adult communities.” – Bill Ness
This survey was conducted online through SurveyMonkey within the United States by 55places.com from July 12, 2019 to August 12, 2019 among 2,888 55places.com users. For complete survey methodology please contact 55places.com.