Let’s take a look at why the 50+ housing segment will continue to be strong in spite of today's soft market conditions.

Here are several reasons why I believe this market segment will continue to outperform the rest of the housing industry:

• Household growth continues to be strong — In the past five to 10 years, there has been tremendous growth among active adult households. As of mid-year 2005, there were 35 million households ages 55-74. With this age group growing by approximately 2% annually, the number will hit approximately 46 million by the year 2014, according to the latest NAHB estimates. Clearly, the numbers are in the favor of builders.
• 50+ households are still working … not retiring to boredom — A big trend builders should recognize is that older households will remain in the work force longer then their parents. Current U.S. Labor Department estimates reveal that 33% of workers ages 65 and older are still working.
•  Net worth of 50+ households remains high — If you look at household net worth, the average net worth of households ages 55-64 is currently $840,650 and the median is $248,700, with 65-74 households at a $696,870 average and $163,100 median, according to recent studies released by the Federal Reserve Board. These buyers have the assets to buy a new home.
• Building permits by 50+ households continue to outpace the rest of the marketplace — Another interesting statistic points out that the 50+ marketplace nationally has matured to the point where one out of every four building permits issued from 2003-2005 was taken out by a 55+ household. By 2015, when the “ABB-eys” (aging baby boomers) will be 69 and the youngest boomers will be 51, it could expand to one out of every three households.
• The bi-coastal marketplace will prevail until 2015 — From these statistics and my experience in helping builders and developers with their market forecasting and planning, it is clear that the active adult lifestyle community marketplace is quickly evolving into a volume market segment. I believe that the East Coast (New York/New Jersey/Pennsylvania down through Delaware, Maryland, Virginia and the Carolinas) will join the Far West and Southwest as the new “boomer markets,” with cutting-edge trends that will help them to stay ahead of the competition. In effect, a heavy bi-coastal market place will remain intact until the year 2015, meaning plenty of opportunity for builders across the country.

With these positive statistics, not to mention that fact 55+ prospects/buyers recognize they have more leisure time for themselves, many couples and singles are using discretionary income for travel, vacation, a second home or buying into an active lifestyle geared to maintenance-free living. Even in today's market conditions, that means opportunities for builders and developers.

With 40 years’ experience marketing active adult lifestyle communities, William E. Becker, CAASH, MIRM, managing director and president of The William E. Becker Organization, has taught and written extensively on this subject. He has been presented with many awards for his accomplishments and is a popular speaker at industry conferences, including NAHB's Building for Boomers & Beyond: 50+ Housing Symposium. Becker is a charter member and past president of the Institute of Residential Marketing and has been named a Legend of the Industry by NAHB’s Sales and Marketing Council and an  Icon of the Industry by the NAHB 50+ Housing Council. He can be reached by e-mail or at 201-833-2610. [Return to top]