RPI Media by jennyyingdi

VIEWS: 2 PAGES: 58

									What 50+ Consumers Want:
Research to Help You Find
   Your Target Market
     Bill Houghton – The Landings
     Dave Robertson – RPI Media
     Margaret Wylde – ProMatura
Evolution of the Retirement Community


          Historical perspective on retiree
           communities:
           Birth, Boom, Bust, and Beyond
          What 50+ Consumers Want: Successful
           Offerings (of communities and of structure)
           Right Now
          What 50+ Consumers Want: Segments of
           Success
Views on Retirement

         “Retirement” as a concept for big numbers of
          folks didn’t happen until after WWII, as the
          adult workforce of the 1940s and 1950s
          retired in the 1960s (previous generations
          more agrarian)
         Growth in corporate jobs (both white collar
          and blue collar) and corporate pensions
         They mostly sought WARMTH – condo in
          Florida
“Amenitized” communities

         As older-care health improved, retirees started
          to look more at AMENITIES.
         Many, who partook of the 1950s and 60s local
          club lifestyle, aspired to golf
         Through the 1970s and 80s these “Greatest
          Generation” retirees created a steady stream of
          buyers for the first wave (The Landings, Sea
          Pines, others) of “amenitized” communities.
Contraction and Expansion, 90s Style


          Real estate recession of the early 1990s
           (remember RTC?) wiped out many of the
           original “amenitized” communities
          Developers in the later 1990s saw the coming
           of the Baby Boomer retiree, and sought to get
           ahead of that “big wave”
Baby Boomers
Two Kinds of Bubbles

         The Baby Boomer “Bubble” is actually just a
          demographic run-up – births by year do not
          plunge after 1964
         The Housing Bubble: anticipating the Baby
          Boomers, developers dramatically increase
          SUPPLY of homes in “amenitized” communities
         Marketers forced to grab that “wave” earlier and
          earlier – retirees buy in their mid-50s, but 2nd
          homeowners start looking YOUNGER
Market Expansion: New Targets!


      3 Amenity Community Buyers:
         End User (but we need more than him!)
         Financial Investor
         “Lifestyle” Investor
Financial Investor
     "In the last 50 years home values
         have trebled. The last
         sustained drop in home values
         [during the Great Depression]
         came during a period of
         extended 25 percent
         unemployment... it would take
         another major calamity on the
         scale of the Great Depression
         before national home prices
         would drop.”
        Frank Nothaft, chief
         economist for Freddie Mac
         (2004)
Lifestyle Investor
         Had become THE biggest target for amenitized
          community developers
         Bought 3-5 years (or more) before “real” need – “Buy
          now before prices go up!”
         Partial use as vacation or income-generating rental
         2005 National Association of Realtors stat: median age
          where people begin “shopping” for a 2nd home was 47
         How did they pay?
Lifestyle Investor
      Prognosis
       “Buy now” mindset is history
       Holding current property (if they can – this group was hit
         inordinately hard by the downturn in economy)
       Current home equity hit hard - can’t borrow
Market Correction - DEMAND

         Investors: Gone (except for vultures)
         Net decrease to future demand – many pre-
          retiree “Lifestyle Investors” have already been
          “coerced” into buying, and/or have been burned
         Six out of 10 boomers between the ages of 50
          and 61 say they may have to postpone
          retirement (economy and poor savings habits)
Econ 101: Supply and Demand
Real Estate SUPPLY & DEMAND

        Recent weak and/or uncertain economy +
        Negative perception of real estate as an
         investment (after too positive a perception before)
                     = DECREASED DEMAND
        Distressed Inventory, 2-3 years of slower sales
         having created a glut of homes, and over-building
                      = INCREASED SUPPLY
        ECON 101: Increased SUPPLY combined with
         decreased DEMAND

                   = DECREASED PRICE
Decreased Price – “Healthy” Community


          Median price of existing home sales down
           25% in 2009-2010 vs. 2006-2007
          Median days on market nearly double
          Lot sales down 80%
          “Buy a lot and build” can’t compete on price
           with existing inventory
          Less of a premium for newer homes
Newer Home Premium?


                                   % of sales   Ave Days on Mkt    $$ per Sq Ft

                                 2006 2009-10   2006 2009-10      2006 2009-10


         Over 20 yr old homes    35%      56%    99       212     $164     $124


           10-20 yr old homes    39%      20%   108       253     $169     $164


     less than 10 yr old homes   26%      23%   167       242     $206     $167
Forced Correction - SUPPLY


         Too many amenitized communities
       News of distressed assets and MAJOR players
        facing (or having experienced) bankruptcy
       Buyers seeking deals – and finding them
       For retirees and trade-ups, biggest challenge
        may be selling existing home
What Does That Mean for Retirement?
Baby Boomers’ Financial “Funk”

         Americans 50 and older represent nearly 30% of
          all delinquencies and foreclosures, according to
          an AARP analysis (Sept, 2009).
Baby Boomers (some positives)

         Peak birth year is 1960 – a current 50-yr old
         Amenitized communities designed and
          developed just for them will have to wait
         Average age of buyers at 2 GA golf
          communities up from 52 in 2006 to 58 in
          2009-2010
         Average age of LiveSouth Real Estate Show
          attendees up from 56 in 2007 to 62 in 2009
         So, does the dearth of buyers make retiree
          attraction MORE or LESS important?
The Pies are Smaller…
The Pies are Smaller…

         But while the pie has shrunk, there are still
          buyers out there!
         And unlike 2005, if you aren’t asking for your
          slice, YOU WON’T GET YOUR SLICE – or even
          your sliver!
Defining and Attracting That Audience


           THIS IS WHERE DAVE STARTS
           While the “pie” has shrunk, there are still
            buyers out there!
           10,000 (and will be 12,000!) Baby Boomers
            turning 60 daily
           Who can afford to migrate?
From The NAHB in 2009…
80-90% of the 25% who move don’t go far…

Different community in the same state                                  46%


                    Same community                                    44%


 Different region with colder climates              19%


    Different state in the same region              18%


                                Other        7%


                                        0%   10%   20%    30%   40%    50%
Characteristics of that 2% - 5%


         Previous Vacation or 2nd Home Ownership
         More Transient (lower tenure in primary
          residence = less ties)
         “Transient” often equates to previous job
          relocation – executive lifestyle
         Top 10% (or tighter) of affluence
         What are they looking for?
Primary Home:
Size of Next Primary Home
       The next primary home I purchase will be…

                                                     Total                   55-65    66+
                                                   Affluence     <55 Years   Years   Years
                                                       %            %          %       %

      Smaller than my current
      home
                                                      30             27      38       23


      Larger than my current home                     21             29       8       5

      About the same size as my
                                                      17             20       14      9
      current home

      Do not anticipate ever
      leaving my current home
                                                      32             25      39       62


     Source:
     Jim Taylor, Harrison Group: American Express Pub. 2010 Wealth Study
Primary Home: Purchase Influencers
      Most important items that will           Total          <55          55-65    66+
      influence you in your next home        Affluence       Years         Years   Years
      purchase:                                  %             %             %       %

       Location/neighborhood                     80            79           82      83
       Price/Getting a deal                      52            50           55      53
       Amenities                                 28            25          35       23
       Square footage                            33            33           30      38
       Security                                  21            17          27       29
       Investment/growth
       potential
                                                 22           25            17      19
       Proximity to
       shopping/activities
                                                 16            15           16      24
       Family centric space                      14            16           13      7
       Easy highway/airport
       access
                                                 10            10           10      12
       Schools                                   15           22            3       2

     Source:
     Jim Taylor, Harrison Group: American Express Pub. 2010 Wealth Study
Current Real Estate Plans
                                                     Total                    55-65    66+
                                                   Affluence      <55 Years   Years   Years
                                                       %             %          %       %
      In the market to acquire any
      type of real estate this year?
                                                       14            16        9       12


      Looking to buy…
      (among hose in the market)
      Primary residences                               41            44       39      16*
      Vacation properties/Second
      Homes
                                                       31            30       39      29*

      Residential rental properties                    21            22        17     25*
      Buildable lots                                   11            10        14     17*
      Commercial properties                            11            12        8      15*
      Farms and ranches                                 8             7        8      17*
        * Result based on small base size (<50)
     Source:
     Jim Taylor, Harrison Group: American Express Pub. 2010 Wealth Study
Baby Boomers Purchase Preferences
                 Jan – March 2010                                     Age
    Golf                                  42%         same            45-55 = 29%
    Beach                                 62%         up from 53%     56+ = 69%
    Boating                               35%         same            85% married
    Gardening                             44%         up from 41%
    Swimming                              60%         up from 48%
    Walking                               83%         up from 80%
    Bicycling                             51%         up from 48%
    Waterfront                            46%         up from 44%
    Gated Community                       35%         down from 45%
    Private Golf Club                     11%         down from 12%
    Shopping close by                     67%         -
    Maintenance Free                      28%         same
        Condo/TownHome                    29%         same
        New Custom Home                   46%         up from 43%
        Home Site/Lot                     29%         down from 36%


    Source: LiveSouth Show attendee surveys Jan – March 2010.
Homes’ Changing Role for Retirees
     Retirees - aging creates urgency to buy
     • 1. Budget: $150k – 275k 1,200 – 1,800 sq. ft.
     • 2. Middle: $275k – 650k 1,800 – 3,000 sq. ft.
     • 3. Luxury buyers, 10% of market
        • $650k – 1.5m 3,000 – 5,000 sq. ft.
     • Primary (universal) Reasons they buy
        • Lower;
           Taxes, cost of living & maintenance expenses
        • Pursuit of Happiness
            • Better weather
            • Amenity access (on site & area)
            • Proximity to family & friends
            • New, never lived in, better home
Ramifications of Delayed Purchase

          Older buyer has different product needs
           Universal design,
           90% of market: 1,200 – 3,000 sq ft.*
          Older buyer has different “soft” needs
           * Healthcare
           * Assisted Living
           * Club amenity types
          Big impact on Supply and Demand

      Source: Live South Real Estate Show attendee surveys
Targeting - Philosophy
        Find your best customers are, and get more people like
          them… Referrals      & Targeted Marketing
      “Cast the net”: Geography, Demographics, Interest
                               & Timing
Assess Buyer Demographics
      - Age
      - HH Income (and/or employment status)
       Net Worth (more easily tracked by home value)
       # of dependents; Children, elderly parents
       Determine which create urgency to buy, Desire into Need

        What unique lifestyle characteristics define your
         community and compel prospects to purchase?
      Demographics…
        - help identify most effective media
        - predict who is able to buy and narrow pool
      Psychographics (Interests and behaviors)
        - predict who MAY and can buy
        - Craft messages
Timing – the Consideration set
          55+ retirees’ urgency differs from first time
           & move up prospects
          Prospects see dozens of alternatives, “consider” 6-
           10 communities, and visit an average of 3 prior to
           purchase
          Marketing gets your community into the
           prospect’s “Consideration Set”
          Reach prospects when they start home
           “shopping”, before they get to your
           1. area and 2. Sales/welcome center
       Interactive media is the most effective
           * Internet & Face-to-Face
Interactive
        Search Engine Optimization (not snake oil – just
         blocking & tackling)
      Key Word / Ad word buys – test and track them
       constantly - Google Analytics
      Paid links & listings
       PrivateCommunities.com
      Measure unique visits and cost to assess
       quantity, and time-on-site to assess QUALITY
        Social Media (though not huge with 60+, are free and huge
         with under age 50) Twitter, Facebook, YouTube

        Brokers – real estate consumers & influencers
Retirees are still buying!
    Just because buyers are not in your models, doesn’t
      mean they are not out there and spending.
    Destination marketing yields sales
    –   Retiree show attendance increased 2008, 09 & 10*
    Target this growing 50+ market to grow sales




  *Source: Live South Real Estate Show
 Research of 50+
   Consumers
           Trends
           Outlook
How to Know What They will Buy
                               2006     Jan 2009   Sept 2009   May 2010   Nov 2010
                               50+         (AA        50+        50+        50+
                             $50,000+    Buyers)   $50,000+    $50,000+   $50,000+
  Profile of Survey Respondents by Study
Age
  < 55                         35%        2%         23%        23%        27%
  55 to 59                     22%        11%        24%        21%        27%
  60 to 64                     16%        22%        21%        23%        24%
  65 to 69                     9%         26%        16%        19%         13%
  70 to 74                     7%         17%         8%         9%
                                                                            7%
  75+                          11%        22%         9%         5%
Marital Status
  Married/partner              86%        72%        81%        82%         78%
  Widowed                      4%         17%         6%         6%         4%
  Divorced/separated           7%         7%          9%         6%         11%
  Single                       3%         4%          4%         6%         6%
Educational Attainment
  Less than high school        1%                     5%         3%         1%

  High school graduate/GED     14%        19%        19%        23%         15%

  Some college                 30%        31%        32%        27%         39%
  Bachelors degree             31%        24%        17%        24%         29%
  Graduate or professional     24%        24%        27%        23%         15%
Net Worth   Source: ProMatura, May 2010, 2009
Studies Targeted Same Markets


        Internet Study
        Destination Resort – 55+
        50 to 79 years of age
        $50,000+ annual household income
Annual Household Income
Home Value
Likelihood of Purchase
Golf
Spa
Homes Prices Tested

        Range of Home Prices Tested by Year of Study

                         Nov 2004         Nov 2010

        Minimum          $200,000         $175,000

       Maximum           $650,000         $300,000
Rating of Amenities (Essential + Desirable) = All
Purchase Groups
                      Rating of Amenities (Essential + Desirable) (Top 10)
                                              Buyers     Possibles     No Buy   Total
       Bistro/Grill (deli sandwiches,
                                                92%         77%         48%     67%
       soups, snacks)
       Outdoor (heated) swimming pool           91%         75%         48%     66%
       Outdoor dining terraces                  91%         72%         40%     60%
       Bakery and coffee shop                   88%         80%         52%     69%
       Deck space for sunning, chaise
                                                88%         80%         41%     64%
       lounges, etc.
       Automatic Teller Machine (ATM)           88%         73%         45%     63%
       Walking and bike paths and trails        86%         73%         42%     61%
       Outdoor gazebo                           85%         61%         37%     54%
       Theatre/media room                       83%         66%         41%     57%
       Outdoor hot tubs                         78%         63%         39%     54%
Rating of Amenities (Essential + Desirable)

                              Rating of Amenities (Essential + Desirable) (Bottom 11)
                                                                 Buyers   Possibles   No Buy   Total
       Full-service cantina                                       77%        61%       33%      51%
       General purpose meeting, card, game rooms                  75%        61%       30%      49%
       Library                                                    72%        74%       51%      63%
       Gardening (greenhouse and desert nursery on-site)          72%        49%       24%      41%
       Full service spa (hair, facials, massage, nails, steam,
                                                                  71%        56%       31%      48%
       sauna)
       Exercise and fitness complex                               68%        65%       37%      53%
       Infinity edge, adult oriented swimming pool                62%        55%       30%      45%
       Business center                                            52%        50%       22%      38%
       Wine cellar and tasting room                               49%        37%       18%      30%
       Tennis courts                                              35%        28%       14%      23%
       Bocce ball courts                                          31%        21%        9%      17%
Age-Qualified vs. All-Age Buyers 2010
              Comparison of Age-Qualified and All-Age Home Buyers
                                               Age-Qualified         All-Age

Size of current home                            2056 SQ FT          2496 SQ FT

Number of months (from May 2010) since          13 months           14 months
recent home purchase
Average amount of incentive                       $20,889            $58,438

Total price paid for home                        $230,663           $230,962

Price paid per square foot                         $125               $110

Asking price of the home                         $256,778           $255,798

Months required to sell previous home           4.7 months          5.2 months

Amount asked when home was originally put on     $281,393           $254,337
the market
    Size of Primary Residence - Recent Buyers
              Size of Primary Residence in Sq. Ft. among Recent Buyers
                                    50+                     AA Buyer        50+          50+
                                  (2006)                   (Jan 2009)   (Sept 2009)   (May 2010)
Mean                               2,024                     2,113        2,466         2,444
Median                            1,800                      2,000        2,200         2,200
Percentiles       25th            1,300                      1,700        1,600         1,800
                  50th            1,900                      2,000        2,200         2,200
                  75th             2,441                     2,343        3,000         2,900


                 Source: ProMatura, May 2010, 2009, 2006
Summary
     1.   Compared to the 55+ home buyer moving to
          an all-age community, those moving to an
          age-qualified community are more likely to…
             –   Make a purchase
             –   Buy a new home
             –   Purchase a slightly smaller home
             –   Pay more per square foot
Summary
     2.   The market has shifted
             Buying homes at a lower price that more
              closely matches the price that they are
              getting for their existing home
             Less likely to pay more for their home
              than they receive for their existing home
             For many this means buying a smaller
              home
Summary

     3.   The recovery will be slow, but consumers are
          beginning to adapt and “come back.”
     4.   The condition of the economy varies widely,
          market by market, across the U.S.
     5.   You must know your market conditions, build
          exactly what the consumer wants and match
          your product and pricing to what they want
          and are willing to pay.
Margaret Wylde – ProMatura
 mawylde@promatura.com

Bill Houghton – The Landings
bhoughton@thelandings.com

Dave Robertson – RPI Media
   daver@livesouth.com

								
To top