Changing Demographics, Aging Boomers Foreseen
ATLANTA The changing face of the American home buyer and remodeling consumer including an aging and more affluent population seeking second homes promises to change the face of the U.S. housing market significantly over the next decade.
That was the opinion expressed by demographers and housing market analysts attending the recent International Builders Show, sponsored by the National Association of Home Builders (NAHB) here.
In press conferences and seminars over the course of the four-day trade show, analysts pointed to a housing market characterized by a changing household composition that promises to reshape the way homeowners think about their new and existing homes.
At the same time, those analysts said, changing homeowner demographics are expected to result in a significantly quickened pace for the construction and remodeling of both vacation and retirement homes.
Among the key demographic changes outlined were the following:
- A decline over the past several decades in the number of people
living in U.S. households, coupled with a sharp rise in median
- A change in the types of families living in those homes. In
1970, for example, 40% of American households consisted of couples
with at least one child living at home. In 2000, that figure
declined to 24%. Conversely, the share of single persons in
households increased from 17% in 1970 to 26% in 2000. And, over
that same time period, single-parent households posted a
substantial increase from 5% to 16%.
- A rise in the number of young adults postponing marriage. In
1980, for example, 21% of males in the 25-29 age group were never
married. This figure jumped to 39% in 2000. The percentage of women
aged 25-29 who were never married rose from 33% to 52% in the same
- A continued increase in the number of dual-employed couples, from 43% in 1974 to 57% in 2000.
According to Gopal Ahluwalia, director of research for the Washington, DC-based NAHB, all these demographic changes are leading to a set of new home buyer preferences, including an increased desire for such features as higher ceilings, home security systems and the replacement of traditional living rooms with specialty rooms such as home offices, media rooms, sun rooms and exercise areas.
Ahluwalia suggested that a critical key to success for builders,
remodelers, and kitchen/bath designers wishing to capitalize on the
future housing market will be for space planners to remain in close
touch with the lifestyles, needs and buying preferences of this
changing American homeowner.
Housing industry analysts also noted that the nation's powerful Baby Boom population, most of which now consists of people in their 40s and 50s, is beginning to look ahead to retirement and is, apparently, beginning to pick up the pace when it comes to purchasing second homes.
That trend will inevitably spell increased activity for home builders and residential space planners in markets such as Florida, North Carolina and other prime retirement areas, those analysts believe.
According to WCI Communities, Inc., a major developer of second homes in Florida, a recent survey of nearly 1,300 people between the ages of 45 and 64 in the Midwest and Northeast revealed that nearly one-third of those people are considering the purchase of a vacation or retirement home.
Additional evidence of the trend toward second homes, according to the Bonita Springs, FL-based WCI, comes from the National Association of Realtors. In fact, according to the NAR, second homes currently account for approximately 7% of the market for existing-home sales. And that number, the NAR notes, is on the rise. In 2000, for example, some 415,000 second homes were purchased, compared to a total of about 377,000 a year earlier.
"There is no doubt about the market's growth and its expectations," said WCI Communities' president Jerry Starkey. "The better we understand their motivations, the better we can create the communities and lifestyles they want to enjoy."
Citing statistics published in American Demographics magazine,
Starkey also noted the following facts about the anticipated growth
in second homes:
- In 1970, Americans owned 2.8 million homes. By 2000, that
number had risen to 6.4 million or approximately one in 10
Americans aged 55 to 64.
- Americans are projected to purchase almost 1,000 second homes
per day from now through the year 2010.
- In 2010, nearly 10 million Americans are projected to own two or more homes.
"Adding to the momentum for second homes will be an increased number of affluent households in America," observed Harry Dent, a well known speaker and author of the book The Roaring 2000's.
Dent pointed out, for example, that there are currently 19.4 million households with $500,000 in net worth and/or $100,000 in annual income a number that may, in fact, double within the next several years.
"We know that lifestyle is key for owners of vacation and retirement homes," Starkey added. "Boomers want to enjoy life, to embrace 'quality' [life] experiences and surroundings that they've worked hard to achieve."