The first Baby Boomer officially hit 65 on January 1, 2011. Thereafter, 10,000 Boomers in the U.S. will turn 65 every day for the next 19 years. What will that mean for real estate?
The Baby Bust has begun. Don’t worry if you missed the start date: You’ll have nearly two decades to deal with the Silver Tsumani (thanks, Hamilton Spectator). The 65th birthday of Baby Boomers has been the most-awaited date for marketers, salespeople and politicians for the last decade. Considering Boomers represent nearly 1 in 4 people in America, there’s good reason to keep an eye on Boomers in the marketplace. Especially because the generation, as a whole, is still the richest in history, even withstanding the recent recession.
We know a lot about Boomers – so much so that figuring them into your sales and marketing plan should be a piece of cake. Consider, just for starters:
- There are nearly 79 million Baby Boomers in America (Pew Research)
- Boomer households earn an average of $62,300 of income (New York Life Co.)
- Male Boomers expect to live to 79 years of age; females to 83 years old
- 79% of Americans over 55 own their own home
- Most Boomers don’t believe old age begins until 72 years of age
Simply put: That’s a lot of people earning a lot of money and planning to spend it for nearly the next twelve years of active retirement.
When it comes to real estate, Boomers have big plans. Nearly 47% of Boomers plan to move at least once as part of their retirement planning. In fact, 10% of Boomers anticipate moving as part of a plan to re-tune their finances, as retirement funds and equity losses reconfigure their plans for the near future (22% say they must delay retirement for the time being).
Even though Boomers may retire more frugally over the next decade, there will be plenty of spending on important priorities, a list of which was recently compiled by New York Life Company who found that Boomer’s view of retirement necessities go far beyond food, clothing and shelter:
- 94% consider internet access a necessity
- 665 consider shopping for birthday presents a necessity
- 51% consider pet care a retirement necessity
- And 42% of Boomers say paying for a child or grandchild’s education will be a retirement necessity for them
Likewise, when it comes to staying engaged – with friends, family and preferred businesses – Baby Boomers continue to evolve. Consider these tech trends that are firmly on the rise:
- The fastest growth in social network usage is among Americans 72 and older, nearly quadrupling in the last two years alone
- 46% of people between the ages of 55 and 64 access the internet wirelessly, with nearly 1/3rd of people over 65 accessing the web without a wire
Boomer’s attitudes and values in housing is also changing, and not just because of the recession. Recent data suggests divergent trends. On one hand, studies by National Association of Home Builders suggest that Boomers are seeking age-restricted communities with lots of perks, smallish homes with minimal maintenance. On the other hand, many Boomers are choosing to “age in place” – including re-urbanizing from the suburbs rather than further out to the golf course – one of many differences in what had become a classic migratory pattern for today’s Seniors from cold states to warmer ones. As Boomers delay retirement even after turning 65, homes that are closer to their jobs and still close to family and grandchildren remain attractive, which often means moving closer to city centers where greater job opportunities remain.
Last year, 1 in 5 buyers was over the age of 65, according to the National Association of REALTORS. About 79% of Baby Boomers own their own home, although some are carrying significant mortgage debt after significantly upsizing or taking out equity during the market boom to purchase second homes. And while Baby Boomers are currently somewhat glum about the future – 34% believe their children will not enjoy as good a standard of living as they do now – the younger Boomers (aged 45-55) still have two more decades of prime earning years.
That’s plenty of time for Boomers to change everything – yet again.