From MultiHousing News*:
A recent study called “The Next Generation: Understanding What the Boomer Consumer Wants from Retirement Living” from Varsity, a marketing company based in Harrisburg, Pa., reveals that “traditional” retirement communities might become a thing of the past for boomers, unless some important changes are made.
Interestingly, I am noticing trends as I meet with dozens of people looking to downsize. People generally want more space, which is understandable as each subsequent generation has bought bigger and bigger houses (until the 20 somethings of today, many of whom are moving into neat modern compact spaces). Downsizing to a kitchenette and a mini 1 bedroom isn’t cutting it for some boomers. Smart retirement communities have a variety of housing options including large 3 bedroom apartments and studios.
Interestingly, the cost structure of retirement communities is also becoming a factor. some communities with deposit requirements are seeing challenges from down-sizers who are selling houses that have dropped in value. Retirees are also cautious due to the variability of their retirement income. Fewer and fewer people have pensions and some down-sizers have small social security checks so they are counting on income from savings and income from home sale proceeds to pay their bills. In today’s zero percent rate environment (ZIRP), bank CD’s and bonds aren’t the good option they used to be for income.
Increasingly retirees are “forced” into investing in high yield bonds and dividend stocks to provide income. Unfortunately, this adds principal volatility to the list of worries they must deal with. It also means they have another reason to be more cautious about the cost structure of the retirement communities they consider.
Hence, boomers often have to choose between a less desirable practical choice and what they really want. And in fact, some may be looking for the impossible – what they want at a cheap price. And perhaps they’re not finding the great, inexpensive place with wireless internet and an office in the apartment. Which means, new entrants will enter the market to cater to this need.
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