Active adult buyers are reemerging
October 8, 2020
Active adult buyers - a key component of housing demand - are reemerging according to researchers with John Burns Real Estate. They found "particularly strong" home sales in August and September at many age-qualified communities.
"We know one of the highest priorities for this buyer set is being close to children and grandchildren," wrote Ken Perlman and Lesley Deutch in a recent newsletter. "This means that as the Great American Move takes place in hot markets from Phoenix to Southern California's Inland Empire to Sarasota, Florida, active adult buyers are following," added Perlman and Deutch, who are managing principals at the research and consulting firm.
While the pandemic prompted this cohort, and others, to pause plans to purchase a home, in part due to worries about their stock portfolios, their fears have subsided with brighter economic news. These discretionary buyers are "restarting" their purchasing process, bolstered by increased confidence in the ability to sell their current home at a good price. Researchers at Burns report active adult buyers prefer visiting sales offices or models in person so long as proper safety precautions are in place.
The 65+ population will grow by a net 17 million people over the next decade. Developers and builders who want to attract active adult buyers should be mindful of four factors, according to the Burns team, which monitors product trends and buyer preferences.
The four "keys to success" Perlman and Deutch delineated were:
- Make sure you have inventory. Some builders contacted by representatives from Burns Real Estate said they are tripling production to satisfy demand. Some also said they're simplifying their offerings, both to streamline production and to keep prices more attainable, recognizing active adult buyers are sill prudent about spending, despite their wealth.
- Design elements that appeal to primary buyers also appeal to active adults. Among the more popular elements are work-from-home spaces and outdoor living rooms.
- A strong virtual presence is essential. Active adult buyers rely on technology for their searches so they can do extensive research before visiting a sales site.
- Active adult buyers still want to visit sales offices before they buy, and they want to make their purchase in person. "On-site sales offices, decorated models, and a well-organized system for coordinating appointments are still critical for selling homes to this buyer profile," according to analysts with Burns Real Estate.
John Burns Real Estate Consulting focuses exclusively on housing, providing analyses and forecasts, proprietary surveys, independent research and various data resources. It has offices throughout the country, serving builders, developers, institutional investors, equity investors, building product manufacturers, and others.