LEXINGTON, KY - The market for retirement housing is fundamentally different from that of traditional housing. Unlike working adults, retirees can choose where they live without the restrictions of a job. Thus, a potential retired active adult home buyer can live almost anywhere. With an estimated 74 million people headed for retirement over the next 20 years, the scope of the potential active adult housing market is tremendous. If, as expected, about 20 percent of the retiring Baby Boomers relocate to another state, that will result in about 15 million interstate migrant retirees over the next 20 years. In contrast, only about 4 million Silent Generation retirees (the Baby Boomers' parents) moved to a new state after they retired.
Because the scope of the potential active adult home buyer market is so large, it also indicates that the cost of marketing a housing development may be quite high. This cost, however, can be mitigated by marketing only to those potential migrant retirees who are most likely to relocate to the community where the active adult development is located. This targeted marketing strategy involves determining what will attract Baby Boomer retirees to the active adult development.
Using data about the retirement behavior of those Baby Boomers who have already retired and the retirement behavior of the War Babies (those born between 1941 and 1946), we believe that future Baby Boomer retirees will be amenity migrants, not sun migrants. Unlike their parents (the Silent Generation), retiring Baby Boomers are looking for more than a warm place to relax. For Baby Boomers, retirement is the beginning of the second half of their lives. They are looking forward to pursuing personal interests and goals which they had to postpone because of jobs or children. In short, they are selecting their retirement destination because of a lifestyle they desire.
For these amenity migrants, it will be the lifestyle of the community where an active adult development is located that will first attract retirees, not the development itself. In marketing such a development, it is essential to place an emphasis on marketing the lifestyle of the community. The first step in developing a targeted marketing plan for an active adult development is to identify the lifestyle of the community where your development is located. Points to keep in mind when doing a lifestyle assessment include:
Don't try to be everything to everybody.
Identify your competition by assessing your community's amenity strengths and weaknesses.
Identify amenities that enhance the lifestyle desired by your potential Baby Boomer retirees.
Recognize that Baby Boomer retirees want to live among people with similar socioeconomic backgrounds.
Green is growing. For many Baby Boomers, the environment is king.
Once you have completed a lifestyle assessment, you are ready to undertake a targeted marketing campaign. Key points of this campaign include:
Focus advertising on people who want the kind of lifestyle that your community offers.
Cooperation is key. If you want to attract Baby Boomer retirees, make it easy.
Marketing your active adult development requires more than simply placing advertisements.
Once interest has been indicated by a response to your advertising, develop and use online resources and tools to keep potential homebuyers appraised of developments.
Use ambassador groups of existing retirees.
Develop and use a customer relations management system.
Currently, the average person retires at age 63. This indicates that some of the War Babies and Baby Boomers have already retired. However, not as many people as expected have retired during the last several years. which shows that an increasing number of Baby Boomers are postponing their retirement and are waiting for an economic recovery before making their decision. This is analogous to water building up behind a dam. If the dam were to break, a flood would ensue. Similarly, when sufficient confidence in an economic recovery occurs, many of those Baby Boomers who have postponed retirement will decide to retire, and the active adult housing market will experience a flood of relocating Baby Boomer retirees.
When this will happen? That date is subject to speculation, but most experts agree it will occur by 2011. Because of the time required to collect the market research for producing and implementing a successful targeted lifestyle marketing campaign, developers that prepare now for the inevitable flood of Baby Boomer retirees will have the best chance of attracting them. Now is the time to plan a lifestyle marketing campaign for your active adult development.
Sharon Lee Metz is President of Lifestyle Marketing and Sales Group, LLC. She is in the process of relocating to Lexington from North Myrtle Beach, South Carolina.