This was the title of a recent Deloitte’s conference. A report from MarketWatch can be found here. The focus was on trying to understand the impact of the Boomer generation on the real estate markets over the next few years.
“Don’t call them aging, don’t call them seniors and certainly don’t offer them early-bird specials,” said Neale Redington, national director of hospitality practice at Deloitte & Touche LLP. They don’t like it, he said. For good reason.
After all, this is a generation that expects to work past the traditional retirement age, said Paul D. Prescott, the national director for Deloitte Tax LLP’s home-building sector. It’s also a generation with active, healthy lifestyles that are in turn helping them live longer.
On the residential side, people aren’t waiting until retirement to acquire a second — or even a third — home, Prescott said. Sometimes the additional home will be located in a favorite vacation spot; oftentimes the intent is to retire there eventually, he said. Many baby boomers want these second homes to be located near a body of water or close to recreational activities. While retirees tend to gravitate toward places that complement their active lifestyles or provide them a lower cost of living, they’re also getting more comfortable with the idea of owning real estate in other countries, Prescott said.
On the other hand, many boomers expect to “age in place,” given their active lifestyles and plans to work past the traditional retirement age.
What they want from their homes and communities is the flexibility to accommodate a range of physical abilities and medical needs — along with other amenities including accessibility to services and wired houses that have convenient access to the Internet.
Despite the spending power that boomers have, it’s also important to note that they haven’t traditionally been the best savers, said James P. Gaines, of the Real Estate Center at Texas A&M University. “I don’t think the boomers are going to retire the same way our parents did,” he said. “They’re terrific spenders but no great savers.” He also anticipates baby boomers seeking quality over quantity in new homes, more interested in granite counters and Internet wiring than the amount of space they have. But acknowledging that boomers have much of their wealth concentrated in their home equity, he also thinks that retirees looking to relocate will look for places with lower costs of living, lower taxes and where home appreciation rates have been modest. “Some of the states that are going to experience some growth (in retirees) are not the ones that have had a run-up in home prices,” he said.