OfflineThere is a wealth of data and media coverage of the influence on our economy of baby boomers entering retirement. Baby boomers are defined as those people born between 1946 and 1964, and the current number in that group is around 76 million. That’s a lot of people and a lot of economic impact.
The group in the first few years of that period is just now hitting full retirement age, and they’re not enamored of the “old folks home” type of living. In fact, they are very much against living in the type of care center environments currently considered the norm. There is also quite a bit of wealth concentrated in this group’s portfolios, bank and retirement accounts. Their lifestyle requirements and desires are very different from those of previous generations.
Zeke Turner, CEO of Mainstreet, says “We don’t believe that the industry-average property is well-suited to take care of the next generation of users. We have to transform the way care is delivered to older Americans, and that means transforming the way the buildings look and feel.” Mainstreet has developed 14 high-end properties and have 12 more in the pipeline mostly in the Midwest and Texas. Most range from 100 to 150 units in size, and some come with private chefs, social amenities and even arts classes. One example property has four dining areas, a movie theater, fitness center and even a hair dresser on site.
There will still be many in this age group who will resist large complexes like these. There should be opportunity for investors who can identify areas where these people will want to live and offer them rental units that place them close to amenities they value. Whether it’s multi-family units, enhanced urban apartment projects, or converted lofts in downtown areas, there will be units in demand by baby boomers who don’t want the “group living” experience, but do want a lot of fun and great amenities within walking distance.
It may be a wise move for investors to check out the age demographic for their areas and take a look at baby boomer housing opportunities.
If you look back a lot of wealth has been made from tailoring to the baby boomers and why should it stop now. I was amazed to hear that for the next few years there will be such a high number of boomers becoming seniors. The impact is already showing if you look at the 55+ residential areas. They are becoming very upscale. This group is used to "doing it big" so its going to be very interesting to watch over the next decade or so. Thanks for sharing this!
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yes, a lot of baby boomers are ditching the 'burbs and moving to metro areas, where they can walk to restaurants, events, shopping, etc.
below is link to article "Retirement Living: Top Metro Areas for Retirees"
http://www.usatoday.com/story/money/columnist/2013/09/09/retire-pension-...
Valerie
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Booming right into a new lifestyle and new housing market. For myself, I have been looking at the sunbelt for retirement/vacation homes for this demographic as well as converting motels in these areas for retirement residences for those who do want a "community" or "group" retirement.
You are right in pointing out that not all retirees have the same wants or needs as previous retiring generations had.
Any insights into what types of properties the retirees who want independent living are looking for? I am thinking perhaps condos but would appreciate knowing what housing trends other investors are noticing for this demographic.
Thanks for another timely post.
Lisa Richardson
Thanks for sharing the link to the metro areas where retirees are flocking!
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And 74% of Boomers in the survey say they will have to rely heavily on Social Security in retirement. (The average Social Security check, by the way, is $1,230 a month.
http://www.usatoday.com/story/money/columnist/brooks/2013/01/28/retire-d...
It amazes me that so many people believe tht older people are poor. Even the government would try to have us believe that older people, as a whole, are living in poverty. Its just not so. Look around you. Older people often have their home paid for. When was the last time you saw a couple in their twenties or thirties with a $50,000 to $100,000 RV in thier driveway? It is a myth we have all been sold.
Heere is a secret from a baby boomer. The old folks have money. They also want to enjoy their money and this includes having GREAT housing.
Roy Voeks
Official RE Coach
I'm a numbers guy Roy. I like data. Some Boomers have it, most don't.
"Focusing on working-age boomers -- those who are 55 to 64 years old -- roughly one-third have no retirement savings at all. Another one-third have retirement savings equal to less than one year's salary. These results are far below the benchmark recommendations developed by financial experts."
http://www.cbsnews.com/8301-505146_162-57590776/retirement-savings-$14-trillion-below-threshold/
"Early baby boomers – born between 1946 and 1955 and now 58 to 67 years old; median net worth in 2010 of $173,480, down about $67,850 or 28 percent from 2007."
http://money.usnews.com/money/blogs/the-best-life/2013/05/17/gen-x-and-l...
Boomers tend to own their own homes and tend to stay put. When they do move, it is usually to be around family. That being said, high end senior housing will more likely be a smaller niche rather than a burgeoning trend. Just my opinion and I may be wrong.