The 8,000 baby boomers turning 65 each day are unlike any generation before them – they are living longer, have more energy and are healthier than any 65 and older group in history, according to Urban Land Institute (ULI) real estate experts.
This change in lifespan, energy and culture in the 65-and-over age group makes predicting how and what to build in the housing market not a “strategy for success," said John McIlwain, ULI senior resident fellow for housing.
The "leading edge" baby boomers – those born between 1943 and 1954 – were less affected by the Great Recession than the 35-and-under age group, McIlwain said.
They are predominately homeowners, were “untouched” by unemployment, and their incomes are up and continue to climb, he said.
There is a low poverty rate among the 65 and over population, with help from Social Security, Medicare and Medicaid.
The leading edge generation fought in the Vietnam War, and introduced women’s lib, environmentalism and disruptive technologies, McIlwain said.
They introduced a “new lifestyle,” which brings upon “new expectations,” he said.
Along with the "silent generation" – those born between 1925 and 1942, the leading edge generation have the energy and desire to continue to make a contribution, but are living longer than they had planned and many are outliving their retirement plans, McIlwain said.
The fear of outliving their money makes predicting a retirement age difficult.
Aging in place may not necessarily mean remaining in the home they’re in at 65 years old, but moving to a new home in a new city – possibly gravitating toward urban areas, back to where they grew up, following jobs or moving closer to family, McIlwain said.
The baby boomers are strong homebuyers, said Robert Sharpe, managing partner of Arizona-based Rancho Sahuarita, who referenced answers to a questionnaire from 30 ULI members about the future of the residential housing market.
“We need Gen Y and Gen X to liquidate the baby boomers’ homes so they can buy another house,” Sharpe said.
As to the choice between urban and suburban areas, Sharpe said people want “an urbanized suburbia."
"They want the amenities, services and employment close to home but still want the good schools suburbia offers,” he said.
Those in the "greatest generation," born between 1901 and 1924, are living longer than any aging population before them.
Cities are adopting themselves to the needs of seniors, and suburbs are challenged on how to provide services for those seniors who choose to remain in single-family homes in the suburbs.
The average age of those moving to senior housing is now up to 84 years, causing high vacancy rates in those communities, McIlwain said.
There’s a “growing dislike” of institutions and institutional living, he said, and a growing number of those choosing to live alone.
However, the target consumer for those communities is 75 and older, a group that is not attracted to the product, said W. Aaron Conley, president of South Carolina-based Third Act Solutions.
“The product as offered does not adequately provide a clear picture of value,” said Conley, who added that moving into one of these communities may feel like an “admission to live final days” there.
The silent generation is looking for a community that is stylish and green with walkable urban neighborhoods, suited for multigenerations and allowing for occupants to remain engaged with the world with technology and health care, McIlwain said.
Age-friendly cities should include a “virtual village” that provides services – financial and technology assistance and transportation – and senior centers, McIlwain said.
Re-zoning to allow for group homes and accessory dwelling units, single room occupancy units and smaller units is also important, he said, and microunits – 250 to 300-square feet – may be attractive to those in their 70s, 80s and 90s.