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WASHINGTON, DC-The first of the Baby Boomers will soon be entering the seniors housing market, and there’s no doubt they will have an impact on the sector like they did on many aspects of society. Given this, the National Association of Home Builders and MetLife Mature Market Institute, based in New York City, examined the 55-plus population and its preferences in homes and communities. The study, which examined Boomers over the age of 55–the entire cohort ranges from 45 to 63 years of age–as well as older generations, also looked into how the housing industry has responsed to consumer demand.

Dubbed “Housing for the 55+ Market: Trends and Insights on Boomers and Beyond,” the report is the first in a series and is based on data from the most recent American Housing Survey from the US Census Bureau. The paper was released during NAHB’s “Building for Boomers & Beyond: 50+ Housing Symposium”, recently held in Philadelphia.

By product type, the locally based NAHB and MMI focused on age-qualified active adult communities, other non-age-qualified 55-plus owner-occupied communities and age-restricted rental communities, and homes where the head of household is 55 years or older. Specifically, the pair focused on trends that emerged between 2001 and 2007, the first time that data like this has been made available for active adult communities.

Citing US Census statistics, NAHB and MMI report that the age 55-plus population in the country has risen from 52.2 million–about 21% of the population–in 1990 to 59.3 million–again about 21%–in 2000 to 70.6 million, comprising 23% of the overall population, in 2007. NAHB forecasts, that by 2010, this group will grow to 76.6 million, or a quarter of the population, and to 85.3 million–26%–in 2014.

Therefore, there’s no question that the demand for housing designed for older Americans has been growing and is expected to continue to grow. “The Baby Boomers’ influence on housing choices has been profound, and will have a huge impact on trends in housing for the mature market as that age group continues to move toward retirement,” comments Sandra Timmerman, director of the MetLife Mature Market Institute. “Some findings show us that this group is redefining the traditional notion of retirement to suit their lifestyle choices.”

The researchers found that most older households don’t currently live in age-restricted or–qualified housing, but that number is rising. In 2001, 2% of them lived in active adult age-restricted communities; in 2007, 3% did. What’s more, residents in this type of community had the highest satisfaction rates, although most 55-plus respondents related they were happy with their current homes.

For older residents, the main reasons behind a decision to move to a 55-plus owner-occupied community were family or personal reasons, financial or employment reasons, as well as the desire to have a higher quality home. In multifamily properties, the top reason was family, followed by reducing costs and increasing quality.

Drilling down to the property level, design and looks were most important factors to older buyers of single-family homes. In age-restricted 55-plus rental or multifamily properties, proximity to family and friends topped residents’ priority lists.

Distance from work location is also important for 55-plus households. In fact, proximity to work was the driver behind choosing a community for 17% of older buyers of single-family detached homes in 2007, up from 11% in 2001 to 17% in 2007. The number of movers into other 55-plus owner-occupied communities rose from 6% in 2001 to 13% in 2007.

The buyers of units in active-adult communities are getting younger–no older than 60–and in multifamily and rental units, many of the heads of households are females.The share of college-educated buyers in age-restricted homes has also taken a leap, from 50% in 2001 to 72% in 2007. More older residents are using mortgages to buy newly built homes than six years ago, but the trend has actually declined for other types of 55-plus communities.

As for developers’ activity and reaction, NAHB and MMI project that the number of housing starts in 55-plus communities will fall this year, particularly given the weakened economy and the difficulty of prospective buyers selling their current homes. Still, the organizations believe builders will start to become active again in 2010.

The NAHB and MMI also discovered that the share of minorities has swung up in age-qualified and other 55-plus owner-occupied communities–a trend that will likely continue, making this housing market more racially and ethnically diverse as the years go by.

“NAHB has tracked the 55-plus population and its share of the housing market for decades,” says David Crowe, NAHB’s chief economist. “But this new data gives us our first look at specific consumer behaviors and preferences–what they look for in a home, the reasons why they move, the characteristics of the communities they choose–over an extended period of time. By examining emerging trends, we have a clearer picture of what the mature market wants in homes and communities, which gives builders the tools to build housing that will meet those needs.”

Among other areas, the report also took a look at the characteristics of the communities where older adults live and their overall satisfaction with them; recent 55-plus movers, reasons behind their decision and where they relocated from; other demographic information such as household size, education, race and income; the inventory of new construction, including the dollar value, basic characteristics, motivations of the buyer or renter, comparisons to the previous home; and the market share of 55-plus households and construction forecasts. NAHB and MMI intend to publish studies on consumer preference and builder surveys, with a gap analysis to show any differences in perceptions, in the future.

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