Gen Y may have surpassed Baby Boomers as the largest share of the homebuying population, but Boomers age 51 to 69 still have significant influence and buying power. According to the National Association of REALTORS®, these “older” buyers have built up equity and are twice as likely to purchase a $500,000-plus home than a Millennial.
Boomers fall into two categories—younger who were born between 1955 and 1964, and older who were born between 1946 and 1954. Combined, they make up the largest segment of home sellers and account for 31% percent of the nation’s homebuyers. Most are married but few have children living at home. They are suburbanites—half live in the ‘burbs while less than 12% choose the city. They purchased now because it was “the right time”—affordability, financing and home availability all ranked low on their reasons to buy.
What’s important to Boomers? The quality of the neighborhood. It was by far the number one factor influencing their choice of location, and nearly 30% of older Boomers moved into a community because of its amenities. As Boomer buyers age, large homesites and acreage become less important and living in a planned community becomes more important. As they reach their sixties, they find resort or recreation areas appealing. When marketing to Boomers, showcase neighborhood features and illustrate how homeowners can use them.
On the other hand, living near schools did not weigh heavily on their decision of where to move; not surprising since their children have flown the nest. Nearly 80% of younger Boomers have no children at home and that number soars to 94% for older Boomers. Convenience to their jobs did motivate younger Boomers—16% cited job relocation as a reason for moving. However, being close to public transportation was not a deciding factor. Older Boomers are least likely to compromise on distance to job when buying. In fact, they are willing to move 30 miles to be close to what’s important to them: family, friends and healthcare facilities. Make sure to highlight the surrounding area and focus on convenience during sales and marketing presentations.
What are Boomers buying now? Very few are first-time buyers—only 14 and 7 percent, respectively. As move-up buyers, more than half of the younger Boomers and 66% of older Boomers owned their own homes. Those under 59 are most likely to purchase a detached single-family home while once people reach the age of 60, they tend toward townhomes or condos that offer maintenance-free living. With built-up equity and their incomes peaking—incomes are highest for those ages of 35 and 59—Boomers are spending more on their homes than Millennials, with a median price of $215,000 versus $189,000. They also are purchasing larger homes. Median home size for young Boomers is 1,890 square feet compared to 1,720 square feet for Gen Y. As they age, Boomers start to downsize and the median square footage drops to 1,800.
Younger Boomers are the most likely segment to buy multigenerational homes—designs with rooms for extended family members. Illustrate how a lower level can be built out with an extra bedroom and living area to accommodate adult children moving back home or offer a plan with an in-law suite to make caring for elderly parents a little easier.
Only 17% to 18% of Boomers purchased new homes. They did so to avoid repairs or renovations. Customization was also important, so reinforce the benefits of new construction. When they opted for resale it was because of better price, better value and the character of the home. Regardless of what type of home they purchased, Boomers said they expected to stay in their new homes 15, 20 years or more. Finding the right place is a major decision…and shouldn’t be taken lightly.
How do Boomers find their new homes? Like their younger counterparts, Boomers are searching and researching online. Approximately 85% used the Internet during their search, with up to 73% doing so frequently. They are not on mobile devices like Millennials, though. So be sure to have a solid online presence that visually represents homes available for sale. From their searches, Boomers most often drive by, view or walk through homes they saw. Reach this segment of the population through print, too. They read newspapers and magazines when home shopping. A typical search lasts about eight weeks, shorter than Gen Y. About 86% bought through an agent and only 8% bought directly from a builder.
Come back next month to learn what’s relevant to Gen Xers.
Stevens & Tate Marketing understands that different ages and generations consume information differently. We focus on finding the right mix of marketing tools to effectively reach homebuyers in all demographics—shifting not only the message to reach the target audience but also the delivery method. To learn more, visit our website at www.Stevens-Tate.com.
Note: Information garnered from the Home Buyer and Seller Generational Trends Report 2015 published by the National Association of Realtors in March 2015.