Baby Boomer Preferences for the New Retirement Home

March 16, 2018

 

Presently, Baby Boomers show preferences that may help shape the supply of homes in the US. According to a 2014 national survey by the Demand Institute:

  • Of the 37% that have plans to move, 54% will downsize and the other 46% will upsize from the size of the house they have now

  • Of the same 37% movers:

    • 75% want a single-story in next home

    • 69% want a garden or yard

    • 68% prefer single-family homes to apartments or condos

The median net worth of Baby Boomers who will downsize is $322,000, but many Boomers value high-quality interiors and access to services and amenities. In fact, downsizers will outspend the upsizing older adults by an average of $20,000 on their new home. Retirement plans have been deferred for many Boomers (partly in consequence to the Great Recession) and, while most will be retired, some will continue working past the age of 65. Deferring retirement may represent a way for them to purchase the larger, dream home they had planned for, but couldn’t afford because of financial limitations caused by the Great Recession. The response to one question demonstrates at least some proactive planning on the part of the Boomer for health issues in the future: the majority of older adults that move desire a single-story home.

 

Products that are oriented towards “seniors” do not show promising demand from Boomers. Among the 37% of older adults that plan to move, most only want “subtle touches” to allow them to maintain the home more easily without sacrificing their preferences for certain features and design, such as small yards and high-end finishes. Most Boomers reported that they want a low-maintenance home but are not necessarily interested in health- or aging-related features in their home.

 

Because Boomers did not generally show an interest in age-supportive features for their current or new home, there may be two waves of the Boomer generation flooding the market for new homes. One wave would occur before frailty necessitates age-supportive features (generally, beginning between 2013-2018), and the second wave will occur later when Boomers must confront the challenges that come with aging in a home that is not age-supportive. Since most older adults fear nursing homes more than death, nursing homes are seen as the last resort to many older adults. But it doesn’t seem like Baby Boomers are willing to do enough to avoid them in their not-so-distant future.

 

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