50+ Housing e-Source - 03/22/2006 (Plain Text Version)

Norman Cohen
Chairman

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In this issue:
Former Del Webb CEO: Builders, Do Your Homework
50+ Home Buyers Ready To Spend
Building For Boomers & Beyond: The 50+ Housing Marketing Is Evolving — Are You?
Make Your Plans for 50+ HC Events at NAHB's Spring Board
21 Tips for Creating a Great Active Adult Community
Everyone Wins on National Membership Day
50+ Housing In The News
Take Advantage of Your 50+ HC Benefits!
NAHB News and Notes

Former Del Webb CEO: Builders, Do Your Homework

One of the top experts in the field, LeRoy C. Hanneman, Jr. has been involved in all facets of the active adult building industry. As the former CEO and president of Del Webb Corporation, now a brand of Pulte Homes, Hanneman was instrumental in making the Sun City name synonymous with active adult living.

Hanneman will speak at Building For Boomers & Beyond:50+ Housing Symposium, during the 2006 Icons of the Industry Luncheon on Wednesday, April 26 at 12:30 p.m. His talk, entitled “X’ers, Boomers, Seniors: Building with a Mindset” will address how understanding the motivators behind boomer desires can help the building industry make the most of this emerging market.

Q- How has the active adult industry changed since you began at Del Webb?

A- The active adult market is far more competitive and geographically diverse than it was in the 1970s and '80s. Back then, there were just a handful of companies specializing in delivering the active adult lifestyle in typical destinations like Arizona and Florida. Today, the active adult market is segmenting at a dramatic rate, due to the relative affluence the baby boomers enjoy versus that of the prior senior generations. They know what they want and they are willing to pay for it. A cookie-cutter approach to housing design doesn’t work anymore. My assumption is that this segmentation of the market will continue.

Q- How are today’s consumers different than when you first came on the scene? How are the baby boomers rewriting the rulebook?

A- Back in 1960, when the first Sun City was unveiled in Arizona, it was the talk of the country. Buyers from all around the country stormed into the Phoenix-area community for the chance of purchasing their retirement dream home — a 950-square-foot, brick-built home with two bedrooms and one bath for $8,500. The recreation center with its swimming pool seems downright antique by today’s standards, but 46 years ago it delivered a little slice of heaven. The old idea was to deliver a “one size fits all” home and community, and it worked very well for a long time, but those days are past us now.

Today, the active adult buyers want more sophisticated home designs and more tailored lifestyle activities. The shuffleboard courts of yesteryear have been replaced with technology labs and health/fitness spas. They also want a variety of destination choices – not everyone prefers the Sun Belt.

Q- How can builders meet the unique needs of today’s evolving 50+ consumer, especially their desire for upscale housing? What do today’s buyers want?

A- Today’s consumers demand a market-driven, bull's-eye design response. Enclaves are hot; mega communities are not. Location is important, as well as access to services, entertainment, education, and quality medical care.

Q- Sun City was once the model for active adult communities. What do you think is the next big thing that will take the industry by storm?

A- The Sun City concept has evolved with time. The newer Sun Cities are often smaller than the original one at 8,900 acres and have the lifestyle offerings that today’s buyers want. I headed the Las Vegas operations for Del Webb for many years, bringing three Sun Cities out of the ground, including one located within the Del Webb master-planned community of Anthem, an all-ages community. I believe the idea of including active adult neighborhoods within multi-generational communities has tremendous merit and will continue to grow with demand.

I also believe that boutique communities that target a very specific customer profile, coupled with a precise execution of product/amenity design, will do well. An example might be a fitness/spa amenity theme where the housing product also accommodates fitness and health components such as a personal exercise room or a gourmet-style kitchen for special dieting needs.

Of course, any community design must accommodate and provide solutions for the customer’s physical, mental, and social needs. If the amenity package budget can’t stretch far enough, those extras must be available in the surrounding area, supplementing the builder’s package. For example, daily-fee golf courses that entice seniors to weekday vacancies with discount pricing offer an opportunity for builders to supplement their focused amenity packages without the cost burden.

Q- What can builders and others in the housing industry do to maintain a competitive edge? How can they compete with Pulte/Del Webb and the other large national builders?

A- Builders need to do their homework to precisely tap the market segment they are targeting. Make no mistake, an active adult housing purchase is purely discretionary. They don’t need to buy from you or anyone else. What are you doing differently that will pull them to you? What are you delivering that makes them excited about the expanded potential of their lives?

Finally, don’t get greedy. You must execute exactness and deliver both value and quality. Integrity in the active adult industry is crucial to success.