Where Will Boomer's Retire?

So Where Do Boomers Want to Retire/Live? Thanks to technology a second home doesn't need to be just a weekend retreat, allowing justification of higher priced second home purchases. Nicholas Retsinas, director of the Joint Center for Housing Studies at Harvard University, says "the rise of telecommuting has done much to spur the growth of the second-home market. A day at the beach, or at least the beach house, no longer precludes a full day on the job." Traveling to the South of France, much less South Florida, eats up too much valuable time. That's one reason most second homes, today, are not in glamorous places, rather they are in convenient ones. According to the NAR, the median distance from first to second home is 185 miles from a major metro area, or about a three-hour drive under normal road conditions. "The most important thing to know is that baby boomers are different, and even the most experienced developers are still trying to figure them out," says Atlanta-based consultant Pete Halter. Empty nesters are selling their big homes in the suburbs and buying a condo or townhouse in the city, and a detached home in a resort destination. They downsize with quality in town and use the resort home as summer camp to try to get the family back together again." Attracting future grandkids appears to be another theme. Developers are learning to build projects a short drive away from the ski slopes, Halter says, so they can increase their activity offering to include all seasons, not just winter. "Right next to a ski run, there's not much going on in July," he says. "But find a spot in a valley a few miles away and you can build a family resort with golf, hiking, biking and equestrian facilities that can be used at other times of the year." Proximity to any natural amenity that offers boomers a chance to hike, bike, canoe or kayak themselves to exhaustion is a strategy. Boomers are so unpredictable, but we know they are more active than any past generation. Hot second-home demand. A quarter of households earning $125,000 a year want to buy a second home in the next two to three years, says resort developer Centex Destination Properties. A survey commissioned by the company found that: Sixty-three percent of households earning at least $125,000 sought information on second-home ownership in the previous 12 months $350,000 was the average price respondents would pay for a single-family home; $295,000 was the average for a condo or townhouse "I worry that we're building too many golf courses. Boomers like to live on golf courses. They like to look at them and they love the appreciation rate of golf club real estate. But they're not playing the game much. The numbers of really avid golfers are actually declining. It requires too much time to play it well, and it may be too sedentary for boomers" says Rich Sonntag, of The Pivotal Group, a Phoenix, Ariz.-based developer of resort communities. "Everything we do is aimed at the aesthetics and idealism of that generation. They have money, and they're making lifestyle choices, but not selfish ones. They're using resort homes as a way to lure three or even four generations of family back together. Boomers seem to feel a sense of guilt about the time they spend away from family. They're looking for a way to make up for it." Will Boomers migrate beyond US borders to less expensive nations for retirement? Superior US health care services is one reason that the US will likely retain many US retirees, and a reason we may attract the many of the world's financially able retirees. How many Baby Boomers are in the other G7 nations who will opt to grow old in the USA? If we add the international retiree to the mix, the outlook becomes exponentially more bullish. Fla.-based market researcher David F. Parker studies the second-home market. He says the numbers are elusive: "When people buy housing in resort areas, they do it for many reasons other than just their own recreational use," he says. "There's almost always a big investment aspect. Homes and condos are often purchased in shared-ownership arrangements that may be formal, with the housing units rented out for part of the year in a rental program, or just simple partnerships with friends. "A house purchased as a second home may become a primary residence for a retiree within only a couple of years," Parker continues. "That happens a lot in Florida." Seniors will demand more from a retirement home. More active lifestyles for seniors of the future, and possibly more flexible housing options. Seniors will also have more money to pay for convenience, as they have planned for decades to "not rely on just social security". "There's been a general realization by investors in the last couple of years that real estate is doing better than the stock market," says Earlysville, Va.-based resort marketing consultant Ralph Bowden. "Amenitized resort communities are the best of all. The under-performance of the stock market boosted the second-home market. Even when stocks recovered, people decided they'd had enough of that roller coaster. A second or third home isn't just a good investment, of course. It provides real enjoyment and works as a bond to bring scattered families back together for holidays and vacations. But without price appreciation, our story would not be as strong." "The rule of thumb for price appreciation in second-home communities is 20% a year for oceanfront property; 15%, on a golf course or for most other amenities. We've had appreciation in resales from 10% to 30%, and it's all dependent on view," says Randy Brooks, principal of Mountain Air, a fly-in resort high in the Blue Ridge Mountains near Burnsville, N.C.