Measuring the High-End Seniors Housing Market PCBC Adam Ducker | - - PowerPoint PPT Presentation

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Measuring the High-End Seniors Housing Market PCBC Adam Ducker | - - PowerPoint PPT Presentation

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Measuring the High-End Seniors Housing Market PCBC Adam Ducker | June 24, 2011 ABOUT THE DATA Analysis based on a March 2010 paper survey conducted by the American Affluence Research Center, with the participation of RCLCO Results

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Measuring the High-End Seniors Housing Market PCBC

Adam Ducker | June 24, 2011

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ABOUT THE DATA

  • Analysis based on a March 2010 paper survey conducted by the

American Affluence Research Center, with the participation of RCLCO

  • Results based on 405 completed surveys

p y

  • Respondents represent the top 10% of Americans in terms of “net worth,”
  • r more than $800,000, reflecting both home equity and net investible

assets

  • Survey participants reflect a broad range of ages (1/3<50), but were

asked to “contemplate a change of lifestyle related to retirement and/or their children leaving home.” g

Net Worth Percentile of U.S. Households % of Rebalanced Survey Results $8000K $1 5M 90 95 50% $8000K-$1.5M 90-95 50% $1.5M-5.9M 95-99 40% $6M+ 99+ 10%

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Total 90-100 100%

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THE VAST MAJORITY OF AMERICANS STILL PLAN ON “AGING IN PLACE”

65% 70%

Empty Nester Housing Plans

All respondents 50% 60% 30% 40% 14% 14% 4% 3% 10% 20% 4% 3% 0% Will remain in current home Will retire to a resort or

  • ther location

Will move to different home in my metropolitan area Will move to condominium downtown in my c rrent metro area Will move to condominium in suburb

  • f my current metro

area

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current metro area area

N=391

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YOUNGER HOUSEHOLDS EXPRESS HIGHER LIKELIHOOD TO CHANGE HOUSING MODE

71% 72%

Empty Nesters Who Intend to Remain in Current Home

All respondents by age 66% 68% 70% 59% 63% 60% 62% 64% 54% 56% 58% 52% < 50 Years Old 50-59 Years Old 60+ Years Old

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N=391

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NORTHEASTERNERS/MIDWESTERNERS MORE LIKELY TO CHANGE HOUSING IN EMPTY NEST

46% 44% 50%

Empty Nests Who Intend to Change Housing During Empty Nester-hood

All respondents by region 38% 44% 35% 40% 45% 22% 20% 25% 30% 5% 10% 15% 0% East South Central West

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N= 139 (East), 40 (South), 31 (Central), 157 (West)

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OF HOUSEHOLDS THAT MOVE - 60% WILL STAY LOCAL, 40% T0 MOVE TO RESORT LOCATION

Empty Nester Housing Plans

All respondents who intend to move 40% Will move to different home in my metropolitan area 7% Will move to condominium in suburb of my current metro area 12% Will move to condominium downtown in my current metro area 40% 0% 10% 20% 30% 40% 50% Will retire to a resort or other location

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N=117

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EASTERNERS MOST LIKELY TO MOVE TO A RESORT THAN WESTERNERS

60%

Empty Nester Interest in Resort Setting - West Coast versus East Coast

All respondents who intend to move 48% 40% 50% 33% 30% 40% 10% 20% 0% Will retire to a resort or other location East West

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N=85

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LARGER UNITS REQUIRED TO ACCOMMODATE THIS BUYER

Empty Nest Condominium Size Requirements

All respondents who would consider condominiums 45% 2,000+ Sq. Fit 42% 1,500-2,000 Sq. Ft. 10% 1,000-1,500 Sq. Ft. 1% 0% 10% 20% 30% 40% 50% <1,000 Sq. Ft.

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N=231 Note” 41% would not consider condominium under any circumstance

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MOST BUYERS STILL SEE CONDOMINIUMS AS A BUY-DOWN OPTION

Condominium Buy-Down Expectations

All respondents who would consider condominiums 69% 20%+ less than value of current home 19% 10%-20% less than value of current home 9% Same value as current home 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% More than value of current home

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N=231

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BUYERS EQUALLY CONCERNED WITH UNIT FEATURES AND LOCATION FACTORS

58% Proximity to Restaurants/Retail

Most Important Features for Condominium Buyers

All respondents who would consider condominiums indicating one of top three factors 35% 35% 58% Views Amenities such as pool y 26% 34% 35% Proximity to Cultural Venues Parking Views 18% 25% 26% Social Opportunities within the Safety Proximity to Cultural Venues 16% 18% 0% 10% 20% 30% 40% 50% 60% 70% Storage Community

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N=231

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STATED INTEREST IN SECOND HOME PURCHASE REBOUNDING SIGNIFICANTLY

Intent to Purchase a Second Home Next Twelve Months

All Respondents 2002-2011 1 % 15% 10% 5% 0%

Spring '02 Fall '02 Spring '03 Fall '03 Spring '04 Fall '04 Spring '05 Fall '05 Spring '06 Fall '06 Spring '07 Fall '07 Spring '08 Fall '08 Spring '09 Fall '09 Spring '10 Fall '10 Spring '11

All Respondents Wealth $6M+

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All Respondents Wealth $6M+

N=405

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SECOND HOME BUYING INTEREST MOST SIGNIFICANT AMONG <50 YEAR-OLDS

7% 7%

Interest in Second Home Purchase by Age

All respondents 5% 6% 2% 2% 3% 3% 3% 4% 2% 1% 2% 1% 2% 0% Will build a new vacation house in the next 12 months Will purchase an existing vacation residence in the next 12 months <50 50-59 60+

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N=405

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INTEREST IN DESTINATION CLUB AND PRC SURPRISINGLY HIGH

43% 45%

Second Home Types Respondents Would Seriously Consider Buying in the Next 12 Months

All respondents who would seriously consider a second home purchase 35% 30% 35% 40% 15% 20% 20% 25% 30% 15% 13% 5% 10% 15% 0% Private Residence Club Destination Club Second home for seasonal use Second home for more frequent use Timeshare

N=40

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N=40 Note: Respondents allowed multiple answers so percentages do not sum to 100%

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MAJOR U.S. METROS WITH HIGH NUMBER OF HOUSEHOLDS 55-74 WITH NET WEALTH $500K+

Interest in Second Home Purchase by Age

All respondents

Seattle 148,000 Boston 220,000 New York 794 000 Philly Chicago 325 000 Minneapolis 113,000 Detroit 794,000 Washington 282,000 Los Angeles Bay Area 347,000 y 238,000

  • St. Louis

90,000 325,000 Denver 98,000 Detroit 166,000 Atlanta 205,000 Dallas 205,000 Phoenix 121,000 San Diego 91,000 Los Angeles 489,000 Miami Houston 183,000 , ,

9M HouseholdsTotal in the U.S. N t $500K i t lth i ti t d t hl

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a 157,000

Note: $500K in net wealth is estimated to roughly equate to wealth and home equity totaling $800K

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TOTAL MARKET DEPTH OF AFFLUENT EMPTY NESTERS RELOCATING TO RESORTS

Interest in Second Home Purchase by Age

All respondents

Seattle 10,700 Boston 48,700 New York 175 000 Chicago 68 600 Minneapolis 23,800 Philly Detroit 175,000 Washington 62,300 Los Angeles Bay Area 25,200

  • St. Louis

19,000 68,600 Denver 7,100 y 52,500 Detroit 35,100 Atlanta 25,700 Dallas 25,700 Phoenix 8,800 San Diego 6,600 Los Angeles 35,500 Miami Houston 22,900 25,700 ,

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a 19,600

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TOTAL MARKET DEPTH OF AFFLUENT EMPTY NESTERS RELOCATING TO DOWNTOWN CONDOS

Interest in Second Home Purchase by Age

All respondents

Seattle 3,900 Boston 12,200 New York 43 800 Chicago 17 200 Minneapolis 5,900 Philly Detroit 43,800 Washington 15,600 Los Angeles Bay Area 9,200

  • St. Louis

4,800 17,200 Denver 2,600 y 13,100 Detroit 8,800 Atlanta 9,300 Dallas 9,400 Phoenix 3,200 San Diego 2,400 Los Angeles 12,900 Miami Houston 8,300 9,400 ,

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a 7,100

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TOTAL MARKET DEPTH OF AFFLUENT EMPTY NESTERS RELOCATING TO SUBURBAN CONDOS

Interest in Second Home Purchase by Age

All respondents

Seattle 2,300 Boston 7,100 New York 25 600 Chicago 10 000 Minneapolis 3,500 Philly Detroit 25,600 Washington 9,100 Los Angeles Bay Area 5,300

  • St. Louis

2,800 10,000 Denver 1,500 y 7,700 Detroit 5,100 Atlanta 5,400 Dallas 5,500 Phoenix 1,900 San Diego 1,400 Los Angeles 7,500 Miami Houston 4,800 5,500 ,

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a 4,200

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KEY TAKE-AWAYS

INCREASE THE “NEED” TO MOVE AS BOOMERS AGE

  • Most Americans will remain in their current home as long as

they can, builder/developers can encourage empty nesters to choose new and better housing by: g y

  • Delivering “smarter” housing that is more energy efficient

and has more predictable occupancy costs

  • Promoting the health benefits of sustainably built housing
  • Fully embracing emerging technology (particularly around

healthfulness) that can improve and pro long life healthfulness) that can improve and pro long life

  • Delivering housing in retail and service rich locations that

reduces reliance on the automobile

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KEY TAKE-AWAYS

EMERGING SEGMENTATION IN RELOATION PREFERENCES

  • Among those empty nesters who intend to move, there is

interest in three distinct product segments each of which represents a unique and compelling opportunity: p q p g pp y

  • Suburban/exurban low density housing locations – 40% of

the market

  • Resort or other non-metropolitan locations including college

towns and other places – 40% of the market

  • High-density product in urban and urbanizing suburban
  • High-density product in urban and urbanizing suburban

locations – 20% of the market

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KEY TAKE-AWAYS

ANTICIPATE OBJECTIONS TO HIGH-DENSITY SOLUTIONS

  • The consumer expects to “buy down” – prepare to educate

regarding the health and lifestyle benefits of high-density housing

  • The consumer is still expecting a large unit – floor plans need to

be efficient and well conceived so that the buyers can visualize their lives in the unit (it will be hard to sell “off paper”); in their lives in the unit (it will be hard to sell off paper ); in- building storage a must

  • Amenitize buildings smartly but generously, including facilities

that allow the move-down customer to have flex space when needed – guest bedrooms, grand/catered dining rooms, guest parking, etc. g

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