One of the most important demographics for homebuilders to market toward is the retiree. This segment of the population, mostly consisting of the baby boomer generation, is currently in the throes of a retirement surge.
Many of these individuals are leaving long-time jobs while others will be empty nesters for the first time. Now that they are afforded more time on their hands due to a lack of job or familial obligations, these retirees are packing up and moving to warmer climates, such as the Texas Hill Country. For a majority of these individuals, the so-called "Freedom Threshold" for when they feel they finally have the opportunity to live wherever they want is 61 years old, according to a recent Merrill Lynch Retirement Study.
One segment of the housing industry that is particularly upbeat about the prospects of these retirees is the National Association of Home Builders. According to the association's 55+ Housing Market Index, homebuilder confidence in this market during the second quarter of 2015 registered a reading of 57, marking the fifth consecutive month it has had a reading above 50. Any reading above 50 indicates positive territory for the Index.
Specifically, the 55+ single-family HMI registered a three-point increase in prospective buyer traffic, although present and expected sales dipped a few points. Despite being positive on the overall state of the 55+ housing market, NAHB Chief Economist David Crowe echoed a now all too familiar refrain about the obstacles currently facing homebuilders.
"Overall, builders in the 55+ housing sector remain positive about the market," Crowe said. "However, many builders are being cautious as lot availability and skilled labor shortages remain a challenge in some parts of the country.
Retirees are increasingly keeping an active lifestyle.
Where retirees are moving
Another solid sign indicating the strength of this market is the Merrill Lynch Retirement Study reporting households with residents 65+ will comprise the overwhelming majority of all household growth in the coming years. At the same time 65 percent of these retirees reported living in the best homes of their lives. As these individuals reach the point where they want to choose to their ideal living situation, they will not only be looking for the best homes, they will also seek out communities that suit their needs.
When choosing where they would like to relocate, these individuals aren't looking to settle down in retirement communities. Instead, the greatest percentage of baby boomers are just as active, if not more so, than they were in their thirties, a recent Del Webb Baby Boomer survey discovered. Overall, social activities dominate baby boomers' calendars, with 60 percent of respondents saying they enjoyed going out to dinner with friends. Meanwhile 51 percent of this age group goes on trips to the movies, and 24 percent enjoy outdoor activities, such as hiking and canoeing.
Retirees are increasingly staying more socially involved during their retirement years.
With so many baby boomers staying active and enjoying outdoor activities, master planned communities make perfect sense for their relocation choices. By purchasing a plot of land in Texas to build their dream homes, retirees have an entire neighborhood of people ready to share meals with and host dinner parties. With the community kitchens offered in many of these neighborhoods, retirees have plenty of options when it comes to hosting barbecues and picnics.
At the same time, the wandering open acreage surrounding many of Texas' master planned communities provides boundless opportunities to enjoy outdoor activities such as hiking and fishing. With the miles of curving roads to walk along, plus access to untouched natural walking trails, the 55+ homebuyers have plenty of choices when it comes to maintaining an active lifestyle in a Texas master planned community.
Homebuilders can take advantage of these trends by promoting these amenities central to the lifestyle at master planned communities. Highlighting the available options can bring together the confidence of homebuilders in the 55+ housing market and the needs driving this growing demand. As the 55+ demographic continues to age and more baby boomers reach their freedom threshold, these retirees will be seeking out land for sale in master planned communities in places like the Texas Hill Country.
Homebuilders are expressing confidence in the retiree housing market.