Baby Boomers are individuals born between 1946 and 1964 – and they are a very important part of the new home industry due to their strong buying power. Not only have they worked for many years and have equity in their existing homes, but they also have inherited the largest passing down of wealth from their parents. Most of the Baby Boomers’ parents were from either the Silent Generation or the GI Generation – both generations of savers. That strong saving ethic has translated into wealth being passed down to Baby Boomers.
In addition to inheriting from their parents, Baby Boomers are no strangers of leveraging. They are the first generation to really capitalize on this concept and many have leveraged their existing homes to buy second homes and investment properties. And while the real estate correction slowed their spending down it did not slow down their love for their homes. To a Baby Boomer, the home has much more significance than just a place to live – it is where they have raised their children and made their memories. It represents safety, security, love and pleasure. To Baby Boomers, their home truly is their castle.
Many Baby Boomers feel, however, their castle is in need of a little makeover. Perhaps they feel their kitchen is a better fit for scullery maid cuisine than their culinary creations. Or perhaps the space no longer fits their ever-changing needs. Their children have grown up and moved on (or not). They may be caring for other adults. Or they may have health concerns which make it more difficult for them to climb stairs. They may want space for their grandkids to stay over. In any case, they are looking to new homes to satisfy their desire for something new and something right for them.
In fact, the National Association of Home Builders did a survey both in 2006 and in 2012 in which 1,400 Baby Boomers were asked to evaluate their satisfaction with their current home. The results indicated that overall satisfaction with their current home slipped 19% between 2006 and 2012 (from 49% to 30%). These results are surprising:
- 4% reported they were very dissatisfied with their home
- 4% reported they were dissatisfied with their home
- 17% indicated they felt neutral about their home
- 44% were satisfied with their home
- 30% were very satisfied with their home
Of the respondents, 24% of the 55-64 age group indicated the recession delayed their plans to move while 19% of the 65-74 age group delayed. This represents pent-up demand, and as conditions continue to improve, we can expect these Baby Boomers to find home solutions that give them exactly what they want.
Baby Boomers with bucks are once again flocking to new home sales centers like children to ice cream trucks. They find new homes irresistible and with the increase of home improvement and decoration shows on almost every other channel they just can’t control their want for new spaces.
So what is it about new homes that Baby Boomers love so much? First and foremost is the idea of being able to customize the home to give them exactly what they want in the size of home they need. When Baby Boomers are given the choice to customize their homes, they have the will and means to pay for it and they will do so. Builders who have realized this powerful trend and provide customization or “personalization options” are reaping the benefits of a smart marketing move. Customization and personalization are the new buzz words for the Baby Boomer.
What our builders are building today will undergo even more change tomorrow because the Baby Boomers are reshaping the new home sales industry. Baby Boomers know what they want and they want it their way. Smart builders and smart real estate professionals are benefiting from working with this very creative and financially-capable generation by giving them what they really want – “personalization” their way.