As demographic demand shifts from urban dwellers (young adults and empty nesters) to families and retirees, home builders are expanding their offerings to cater to these long-awaited demographic groups. Builders interested in participating in our survey of what consumers are willing to pay for should contact us immediately before we launch the Consumer and Product Insights survey next month.
Demand from 1980s Sharers (currently aged 27–36) has finally picked up over the past few years and will increase steadily as the economy grows. With 5 million people turning 65 this year and more of them planning to move, builders have ramped up product offerings targeting boomers. Note the two population spikes below.
Builders have pivoted towards entry-level homes in three ways:
- Keep driving. Builders are opening more communities in outlying areas where median-income families have no choice but to commute if they want to be homeowners. These areas have been slow to recover but have done so in the markets where total employment exceeds prior employment by 7% or more.
- Stop driving. Builders are constructing townhomes and small-lot detached homes in surban™ locations for the more affluent entry-level buyers who went to college and delayed marriage and parenting. These life choices have resulted in high incomes compared to prior generations of younger first-time buyers.
- Smaller and simpler. Simplifying homes and fine-tuning the bells and whistles allow builders to include more features that targeted consumers have told us they will pay for. Builders are making some features optional. They are also offering communities with less expensive but more appealing amenities, such as an oversized laundry, big kitchen islands, and a walk-in pantry.
Note all of the entry-level home builder brand announcements below.
Active Adult Pivot
While the growth in 55+ age home buyers has been well known for many years, builders have often struggled because age-restricted buyers are patient (and thus can disappear for years in a downturn) and demanding (you better deliver on your promises). Lately, builders have opted for integrating active adult neighborhoods and floor plans into masterplans near where the buyers’ children and grandchildren may live. Builders have also been focusing on locations where the surrounding communities provide amenities, rather than building the amenities themselves. They are offering more lifestyle services, such as entertainment and health and wellness services, which are far less expensive than golf courses and massive clubhouses.
Note all of the active adult home builder brand announcements below.
Shifting demographics and consumer preferences have pushed home builders away from mature families to focus more on young families and retirees. While demand will be there, execution will be critical. That is why we just opened up our next Consumer and Product Insights survey to large home builders. More than 20,000 new home shoppers across the US answered more than 100 questions in our last survey, telling us the features and amenities they will pay for. We look forward to surveying how trends have changed in the last two years so that we can help our clients continue making smart decisions.