Posts Tagged ‘Baby Boomers’
5 Surprising Demographic Trends for 2012
Posted by Sibet B Freides in Real Estate Trends on January 25th, 2012
The National Association of Realtors’ latest Profile of Home Buyers and Sellers has some unexpected statistics about who is buying and selling in today’s market. Now that the first-time homebuyer tax credits have ended, baby boomers have replaced Gen Y and Gen X as the dominant players in the real estate market.
This year’s profile revealed these surprising statistics:
1. Bottomed out at last. Prices appear to be stabilizing in some areas. This is the first step in climbing out of the rocky bottom we have been in for the last several years.
2. Boomers are the key players. In 2010, due to the first-time homebuyer tax credit, the median age of first-time buyers dropped to 31. In many markets, the number of first-time buyers hovered at the 50 percent level. The smart move in 2011 was to market to Generation Y.
Over the last 12 months, however, there has been a substantial change that can have important ramifications for your business in 2012. In 2011, baby boomer purchases substantially surpassed the number of Generation Y buyer.
Why is this surprising? There are more Gen Yers than there are boomers. Generation Y is also at its peak buying age – marrying, establishing new households, and having children.
Furthermore, boomers are actively driving the second-home market. As a result, it may be smart to revisit your business plan for 2012 and to place more emphasis on working with boomers who are currently the dominant players in terms of purchasing.
3. More buyers are using agents. 89 percent of buyers purchased their home through a real estate agent or broker – that’s up from 69 percent in 2001. What are some ossible reasons?
Realtors shorten the search process when there are huge amounts of inventory on the market and people are pressed for time. Most likely, though, it’s the difficulty of the loan process both on the buyer’s side in terms of qualifying for a loan, and on the seller’s side based upon the appraisal process that marks the need for realtors.
4. Married couples or single female buyers? The trend since 2001 has been a substantial decline in the share of buyers who were married. From 2001-2008, the number of married couples purchasing homes dropped from 68 percent to 58 percent.
A historically high percentage of Gen Xers are actually unmarried. As a result, the market saw a huge proportion of single female buyers – the smart market niche for 2011.
In 2012, it’s an entirely different story. The number of single female buyers is still relatively high at 18 percent, but that’s the lowest number since 2004 and represents a reversal of a major trend. It’s time to focus on marketing that reaches couples and families in 2012.
5. Life changes drive real estate sales. The primary reason to purchase a home among repeat buyers is often because of life changes: the desire for a larger home, a job relocation or move, desire to be closer to family and friends, or a change in a family situation.
How will you focus on these 5 new developments for 2012 to reach more sales?
Baby Boomers Finally Contributing to Online Sales
Posted by Sibet B Freides in Demographics on November 17th, 2011
Baby Boomers have finally become more comfortable with technology; they have now started spending a great deal of money online. According to Mediapost, more than 70% of consumers ages 45 to 55 made an online purchase in the past three months.
Consumers ages 56 to 66 spend the most online among all the generations – more than double the amount of what is spent by those ages 18 to 22.
The average online consumer owns two connected devices. Not surprisingly, the ability to go mobile will fuel the trend, as 78% of those adults going online daily.
Nearly all online U.S. adults own a mobile phone, more than one-third own a smartphone, and close to half log on to the Internet through it at least monthly. 67% of these consumers are considered the most sophisticated by a Forrester study because they rely on their phones for email, games, and checking news, sports and weather. They also use their phone to send text messages and watch videos.
The study also suggests that consuming other media has become popular online. 74% of consumers watch TV online at least once weekly.
It is yet to be measured how Boomers are responding to online ads and where they are most reachable. What do you think from your experience? Are Boomers clicking online banner ads, pay-per-click, review sites? What do you think is the best way to reach them online? Share by commenting below or posting on our Facebook page!
What Do Millennials Want in a New Home?
Posted by Sibet B Freides in Demographics on June 14th, 2011
Millennials buying homes now are different from the group that will be entering the market in the next 15 years. Also known as Generation Y or the Echo Boomers, this group numbers 80.8 million, according to the U.S. Census Bureau. The Bureau actually estimates that Millennials could number 92.9 million by 2025.- Clean, simple design that maximizes square footage
- Low-maintenance materials and minimal lawn care
- Open floor plans that “flex” for multiple uses
- Small but usable outdoor spaces
- Ample storageUp-to-date home technology (full broadband or wireless connectivity,charging stations for electric cars, etc.)
- Sustainable materials and energy-efficient systems and appliances
- Walking distance to mass transit, shopping, dining
- Fitness centers
- Entertainment rooms
- Nearby parks
- Walking and biking paths
Will Boomers Reshape the Housing Market Once Again?
Posted by Sibet B Freides in Demographics, Real Estate Trends on May 26th, 2011
Baby Boomers used to be one of the largest targeted demographic groups in the housing industry. As their retirement funds diminished over the past few years, many were forced to work longer before considering a retirement home or community, which put them in a limbo of sorts with the future of the market.
There is a predicted Boomer comeback among builders, only this time the market and their needs will reflect a simpler product line. Land planners now have an opportunity to rethink community and home designs that were originally intended for that age group.
Retiring Boomers are still privy to developments restricted to older buyers, but they are seeking a greater variety of home styles than were offered during the housing boom.
The recession has resulted in less money to spend and brought about requests for less space than previously desired. Successful developments are actually scaling back home sizes by 200 to 400 feet.
With the possibility of younger Boomers continuing to work at least part time post-retirement developers should consider creating space for home offices in their floorplans.
Among the most popular amenities desired, walking trails and fitness centers are still number one on the list. Gated access and the feeling of security also play into the overall picture.
What other features do you think today’s Boomers are looking for? Do you think the 77+ million Boomers are a strong voice in market demands?
Chronology of the Generations
Posted by Sibet B Freides in Demographics on May 19th, 2011
There have been many conflicting attempts to classify the generations of the western world. The chronology through the early part of the Baby Boomer generation has been widely accepted; however it is harder to define the newer generations. Do we attach them to population dynamics or sociological theories?
The following is a list of generations as we know them:
The G.I. Generation includes the veterans who fought in World War II. They were born from around 1901 to 1924, coming of age during the Great Depression.
The Silent Generation was born from 1925 to 1945 and includes those who were too young to join the service during World War II. Many had fathers who served in World War I.
The Baby Boom Generation is the generation from about 1946 to approximately 1964, a time that was marked by an increase in birth rates. The Boomers are a demographic that changed society. Many grew up in a time of affluence. One of the features of Boomers was that they tended to think of themselves as a special generation, very different from those that had come before them. In the 1960s,
as the relatively large numbers of young people became teenagers and young adults, they definitely brought about succinct change in society.
Generation X is the generation defined as those born after the baby boom ended, born in the 1960s and 70s. The term is also popularly used to describe counterculture in general.
Generation Y is also known as the Millennials, Generation Next, Net Generation, or Echo Boomers. This term typically describes the group born at the start year of 1982, and end years around the turn of the millennium. While getting a bad rap and being dubbed as “The Entitlement” children, Gen Y is really an astounding bunch.
Generation Z, also known as Generation I or the Internet Generation. They were recently dubbed Generation @ in the “Digital Natives” by Marc Prensky. This is the newest and current group of digital wonders were born no earlier than the 1990s and are truly changing are structures and systems as we know them.
What do you think? Which generation will most likely pull us out of our current economic situation? Where are we headed as a society – are things breaking down to allow better conditions to be built, or simply breaking down? We’d love to hear your thoughts in our comments section below, or on our Facebook page!
Will the Rental Market Prevail?
Posted by Sibet B Freides in Real Estate Trends on April 21st, 2011
A wise client of mine has said many times: the government had one good finance program. Congressional wisdom said, if we have one program working well, why not three? Right! So was born Fannie and Freddie.
Although the expansion has made home ownership easier and a profit for investment institutions, insurance companies, and developers/builders, it wasn’t 100% positive for America – thus the foreclosure rate and an economy that almost imploded a year ago. But we rode the tide; and it was great for a lot of people, including Idea Associates.
Regardless of the current state, I think that renting will be popular for many years due to these and other circumstances:
- It will be harder to get financing if you have any kind of credit issues.
- Reduced options available for lending.
- Social change – Generation Y doesn’t want to own as “early” as other generations and will delay home buying.
- Baby boomers now tend to rent in the south and keep their home in the north to experience seasonal comfort.
- Society as a whole has changed – people are mobile and want to be able to move for jobs and other reasons.
- The real estate market is snapping up apartment buildings everywhere, giving investors the impression that this is a hot market. Does that mean we’ll soon see all those condo conversions convert back?
Shift in Buyer Wants and Needs
Posted by Sibet B Freides in Demographics, Real Estate Sales, Real Estate Trends on March 29th, 2011
Aging boomers are reluctant to sell their homes for two reasons. One, they may be in trouble with their mortgages and are waiting for the market to rebound and two, they are healthier than their parents’ generation and will likely delay the move to retirement community living.
Will a market exist for their homes when they are ready to sell? Only time will tell. However, the income constraints and lifestyle demands of a shifting population may dictate a very different future for real estate.
These changing needs along with the demands of the expanding Echo Boomer generation is forcing the real estate market to respond in new and different ways.
According to a 2009 study by RCLCO, both retiring baby boomers and maturing echo boomers are looking to move away from the suburbs they’ve spent their lives in. Both groups reported wanting to live in more urban, mixed use, mixed age areas that offer services, community and walk-ability.
How does this changing market most affect your business? Share your successes and struggles with us here on the blog, or on Facebook or Twitter.
What Does Generation Y Want in Their Next Home?
Posted by Sibet B Freides in Demographics on March 11th, 2011
So what’s one of the top desires Generation Y homebuyers have for their next home? You can probably guess it, walkability.
This truth was recently reinforced at a NAHB conference in Orlando. Not only does Generation Y want to be able to walk to restaurants and retail locations, but they also would like to walk to work if at all possible.
What else do they want? Pretty much the opposite of the once Baby Boomer desired McMansion in the suburbs. This includes smaller rooms, tighter floor plans, no bathtubs, and smaller green spaces.
One thing that researchers are finding is that Gen Y wants an amenity-rich living experience. This includes pools, fitness centers, and party rooms for social gatherings. Such amenities are often found in urban apartment buildings, which may explain the recent burst in that market.
An interesting aspect to all of this is that some Boomers are starting to adopt the mindsets of Generation Y. Downgrading is becoming a popular theme in real estate right now. Maybe it’s because people cannot afford what they once could. It might also be that the recession has changed the way Americans view home ownership.
Where are you in that spectrum? What do you or your clients value in a home – a large, spacious suburban setting or a building showered with amenities and the convenience of Intown living? Why? Share your thoughts below, or tell us on Facebook or Twitter!
