Five Fast Facts on the Future of Real Estate, Graying Boomers & Aging-in-Place
Joseph F. Coughlin is director of the Massachusetts Institute of Technology AgeLab (http://agelab.mit.edu). His research explores how demographic change, technology and consumer behavior drive innovations in business and society. Coughlin teaches in MIT's Department of Urban Studies and Planning and the Sloan School's Advanced Management Program. He is author of the new book The Longevity Economy: Unlocking the World's Fastest-Growing, Most Misunderstood Market (Public Affairs, 2017).
If you are in the housing and real estate development business, an investor or simply thinking about your own housing options the baby boomers are shaping your future fortunes again – but with a twist. Rather than driving new home sales they are showing preliminary signs of staying put. That is, aging-in-place. Not great news for new home starts, developers or even those trying to unload their current home to ‘age-someplace-else’.
Drawn from a recent survey conducted by AARP and a study jointly conducted by The Hartford Advance 50 Team and MIT AgeLab, here are a few fast facts on aging baby boomers and their attitudes towards aging-in-place. Consider these data points that provide insight into investment strategy not necessarily trends poured in proverbial concrete – after all, as has been said by others ‘prediction is wrought with difficulty especially when speaking of the future'.
I Want to Stay – 73% of surveyed adults 45+ strongly agreed with the statement "what I'd really like to do is stay in my current residence for as long as possible" 13% somewhat agreed.
Home is More than Amenity – For baby boomers, the 3 most important factors in deciding where to live as they age are living close to family (30%), feeling comfortable (25%), and affordability (20%).
Even if I Wanted to… – Boomers that were ages 45 to 54 in 2009 will have 26.6% less household wealth than families in this age group in 2004, thus making them less able to finance relocation in older age.
A Pattern is Emerging – Rural and suburban areas are aging more rapidly than urban areas.
Remodel or Move? – 96% of baby boomers are aware of changes they could make to their current home to make it more comfortable or accessible to live there as they age – but only 26% have made changes.
Perhaps not the brightest outlook for new home starts - but an opportunity for others. Developers may have to focus on filling suburban communities with commercial developments with shops, cafes and other activities that add livability to bucolic but barren developments built decades ago. Remodeling and home modification businesses may boom in the near-term. Banks and other financial product providers may find loans and products that blend finance with services to support aging-in-place a new source of product innovation and sales. And, 'services-to-stay' offered by retailers, communities and emerging public-private cooperatives (e.g., Beacon Hill Village) may grow in graying 'burbs and rural areas.
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