Changing Demographics, Aging Boomers Foreseen

by WOHe

Changing Demographics, Aging Boomers
Foreseen

ATLANTA The changing face of the American home buyer and
remodeling consumer including an aging and more affluent population
seeking second homes promises to change the face of the U.S.
housing market significantly over the next decade.

That was the opinion expressed by demographers and housing
market analysts attending the recent International Builders Show,
sponsored by the National Association of Home Builders (NAHB)
here.

In press conferences and seminars over the course of the
four-day trade show, analysts pointed to a housing market
characterized by a changing household composition that promises to
reshape the way homeowners think about their new and existing
homes.

At the same time, those analysts said, changing homeowner
demographics are expected to result in a significantly quickened
pace for the construction and remodeling of both vacation and
retirement homes.

Among the key demographic changes outlined were the
following:

  • A decline over the past several decades in the number of people
    living in U.S. households, coupled with a sharp rise in median
    family income.
     
  • A change in the types of families living in those homes. In
    1970, for example, 40% of American households consisted of couples
    with at least one child living at home. In 2000, that figure
    declined to 24%. Conversely, the share of single persons in
    households increased from 17% in 1970 to 26% in 2000. And, over
    that same time period, single-parent households posted a
    substantial increase from 5% to 16%.
     
  • A rise in the number of young adults postponing marriage. In
    1980, for example, 21% of males in the 25-29 age group were never
    married. This figure jumped to 39% in 2000. The percentage of women
    aged 25-29 who were never married rose from 33% to 52% in the same
    time period.
     
  • A continued increase in the number of dual-employed couples,
    from 43% in 1974 to 57% in 2000.

According to Gopal Ahluwalia, director of research for the
Washington, DC-based NAHB, all these demographic changes are
leading to a set of new home buyer preferences, including an
increased desire for such features as higher ceilings, home
security systems and the replacement of traditional living rooms
with specialty rooms such as home offices, media rooms, sun rooms
and exercise areas.

Ahluwalia suggested that a critical key to success for builders,
remodelers, and kitchen/bath designers wishing to capitalize on the
future housing market will be for space planners to remain in close
touch with the lifestyles, needs and buying preferences of this
changing American homeowner.

SECOND-HOME Market
Housing industry analysts also noted that the nation’s powerful
Baby Boom population, most of which now consists of people in their
40s and 50s, is beginning to look ahead to retirement and is,
apparently, beginning to pick up the pace when it comes to
purchasing second homes.

That trend will inevitably spell increased activity for home
builders and residential space planners in markets such as Florida,
North Carolina and other prime retirement areas, those analysts
believe.

According to WCI Communities, Inc., a major developer of second
homes in Florida, a recent survey of nearly 1,300 people between
the ages of 45 and 64 in the Midwest and Northeast revealed that
nearly one-third of those people are considering the purchase of a
vacation or retirement home.

Additional evidence of the trend toward second homes, according
to the Bonita Springs, FL-based WCI, comes from the National
Association of Realtors. In fact, according to the NAR, second
homes currently account for approximately 7% of the market for
existing-home sales. And that number, the NAR notes, is on the
rise. In 2000, for example, some 415,000 second homes were
purchased, compared to a total of about 377,000 a year earlier.

“There is no doubt about the market’s growth and its
expectations,” said WCI Communities’ president Jerry Starkey. “The
better we understand their motivations, the better we can create
the communities and lifestyles they want to enjoy.”

Citing statistics published in American Demographics magazine,
Starkey also noted the following facts about the anticipated growth
in second homes:
 

  • In 1970, Americans owned 2.8 million homes. By 2000, that
    number had risen to 6.4 million or approximately one in 10
    Americans aged 55 to 64.
     
  • Americans are projected to purchase almost 1,000 second homes
    per day from now through the year 2010.
     
  • In 2010, nearly 10 million Americans are projected to own two
    or more homes.

“Adding to the momentum for second homes will be an increased
number of affluent households in America,” observed Harry Dent, a
well known speaker and author of the book The Roaring 2000’s.

Dent pointed out, for example, that there are currently 19.4
million households with $500,000 in net worth and/or $100,000 in
annual income a number that may, in fact, double within the next
several years.

“We know that lifestyle is key for owners of vacation and
retirement homes,” Starkey added. “Boomers want to enjoy life, to
embrace ‘quality’ [life] experiences and surroundings that they’ve
worked hard to achieve.”

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