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Lost wealth won't keep 50+ buyers down for long

Nation's Building News, 5/4/09

Abstract:

Reeling from a sizable decline in wealth as a result of the current downturns in housing and the financial markets, members of the baby boom are in a bit of a holding pattern for now, but will gradually make their way back into the housing market, eventually in a big way, according to panelists at NAHB’s Building for Boomers and Beyond 50+ Housing Symposium in Philadelphia April 27-29.

Builders at the conference reported that selling an existing home has become a major stumbling block for households who would like to move to an active-adult community either restricted or targeted to 55+ residents. For the most part, however, this segment of the market is performing no better or worse than the housing market overall, which is generally sluggish and just beginning to emerge from the grips of the most painful slump in decades.

Sales to 55+ buyers are expected to strengthen next year, and some segments of this market — particularly the most affluent — could become notably robust as early as 2012, according to some of the forecasts that were presented.

Builders who have been keeping a close eye on the business potential of the baby boomers, who are currently age 45 to 63, have also been watching trends suggesting that these aging households have different plans for living out their retirement years than the generations preceding them...

...The recession has put the dynamics of the housing market into disarray, and Zandi noted these demographic components to describe how: Thirty-three is the average age of the first-time buyer, he said, but 30-somethings are temporarily in a period of “going nowhere.” Forty-three is the average age of the trade-up buyer (who has to be able to sell to the first-timer). Incidentally, there are currently more people in the U.S. who are 49 than any other age. The second most common age is 19, the first-born of the 49-year-old who will soon enough be an empty nester. “And 50-somethings will take time to get going because of lost equity” in their homes as of this year’s first quarter, he said...

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