At least five of the top communities in our JBREC Best Selling Master Plan Community ranking are exclusively Active Adult (AA) or have an important AA component. This segment has been overlooked as a part of the MPC discussion, so the fact that AA communities in a variety of markets have been among the most consistent performers during this downturn comes as a surprise to many.
Why is AA so resilient?
In spite of a fragmented market with many location and product options, the AA model can be very powerful when the magnet of a great “place” is created. This is clearly the mission within a MPC philosophy. Establishing a great place takes time and significant resources but, when executed well, it attracts new residents from a massive geography, and those residents become the best marketing tool possible as they attempt to convince their friends to join them.
Here is a deeper dive into the top AA communities in our ranking:
The Best Selling MPC in 2010: The Villages in Central Florida was the number one selling community in the country in 2010 with 2,200 sales. Their success is due primarily to offering a variety of active-adult housing products at affordable price points, access to many golf courses, extensive activity programs and multiple mixed-use Town Centers that function as village hubs with retail, services and amenities. The 22,000-acre development is located in Central Florida, approximately 20 miles south of Ocala and 45 miles northwest of Orlando. The Villages appeals to seniors who love golf and want to retire in style and on a budget.
AA Choices for any Price Point: In a market like Phoenix, which has experienced particularly negative impact from the housing downturn, some are surprised to find three of the Top 20 MPC communities, and all three offer an active-adult orientation or component. Fabulous winter weather and fantastic lifestyle amenities contribute to the success of AA here.
The Phoenix area is a well-established retirement and second home destination, and the market offers a variety of active-adult communities with differing price points, locations, and amenities. Senior-oriented services abound all over the MSA. The exchange rate and pricing has also lured a lot of recent interest from the Canadian second-home buyer..
- Anthem at Merrill Ranch claimed the number 17 spot and includes a critical component of AA with Pulte’s successful and well-amenitized Sun City brand. Last year this community garnered 193 sales. Prices range from the low $100,000s to $300,000.
- Blanford Homes at Tuscany Hills is another exclusively AA community that offers a relatively close-in location with golf, amenities and great proximity to services and freeways. This affordably priced project ranked as the number 20 best-selling community on our list with 180 sales last year. Prices begin in the $190,000s and range to the mid-$200,000s.
- Trilogy at Vistancia by Shea Homes made our list ranked as number 15 due, in part, to the strength of its AA component. Overall, this upscale MPC had 217 sales in 2010. Prices fall in the $200,000 to $400,000 range.
Southern Hospitality: Teravista includes a key AA factor that contributed to the Newland’s Austin, Texas project claiming the number 22 spot on our list and capturing 171 sales in 2010. This community stands apart in its market with a good location, golf orientation, and targeted product offerings.
Lesson Learned: These projects underscore that not only is AA a big market segment; it’s also a diverse one. If done well, there is untapped opportunity for future AA communities, or at least components, to be successful in many metros, including those not traditionally considered active-adult destinations.
While AA sales certainly slowed the last several years, the demand drivers are different. These traditionally patient buyers are less affected by conditions in the mortgage market, and more affected by the value of their stock portfolio. Partially thanks to the improvement in the stock market, the AA buyers are coming back, and thus far this year we believe AA sales are significantly outpacing last year. The demographic trends going forward are also very favorable, and we expect new types of AA communities to be created. All of these facts make a great case that that you should be looking for ways to incorporate AA into your projects to expand segmentation and market capture.
Our View on the Future: We have been planning for this boom for years, and we are excited about the opportunities ahead. Tim Sullivan has been conducting AA studies for more than 20 years. Mollie Carmichael was part of the Pulte team that conducted due diligence on the Del Webb acquisition and helped make their communities successful once acquired. John Burns was a member of the 50+ Housing Council Board of Directors for years and authored a series of huge regional Active Adult demand reports by MSA that were purchased by more than 100 companies. We are prepared to help you identify the niches that will be developed as the number of people turning 65 grows through 2026.
