Millennials exceeded the baby boomers as the largest living generation in 2015 according to the Pew Research Center. “Millennials have become the top home buying demographic in the country,” Dan DiClerico of Consumer Reports told attendees at the 2015 National Association of Home Builders conference. They now make up 36% of the market where boomers make up 34%.
Millennials
For millennials, there is no such thing as a starter home anymore. They want suburban midsize homes over 2,000 square feet with all the amenities of urban living like connectivity, entertaining space, outdoor space, walkability, shopping, and some little luxuries like a spa-inspired bathroom and four plus bedrooms. Financially aware, they aren’t willing to enter into larger home loans to achieve their dream, but they have no problem sacrificing some traditional elements of the floor plan. In fact, the National Association of Homebuilders found that 43% of millennials would readily forgo a living room in favor of other perks.
Case Study: Builder, Pardee Homes, did a great job of adjusting to the needs and wants of the Millennial home buyer in the Responsive Home project (the BUILDER concept homes constructed in 2015). The two homes were between 2,000 and 3,000 square feet and were of two different designs—but both had that clean, contemporary edge that millennials love so much. Opportunities to personalize beyond the paint and finishes included adding bedrooms, office or fitness space, separate entrances, guest quarters, etc. The homes were designed with a floor plan for entertaining both indoors and out and the ability to move from indoor to outdoor seamlessly.
55-Plus
Over the next 15 years, there will be double the amount of Americans over the age of 65 than there are now. Similar to millennials, boomers “are very discerning in their tastes and have a very clear vision for what their next chapter of life should entail,” Taylor Morrison president and CEO, Sheryl Palmer said.
Like millennials, boomers want their amenities close by. The AARP Public Policy Institute lists their top five amenities as public transportation, grocery shopping, pharmacy, parks, and hospitals. Hanley Wood’s research into baby boomer buyers revealed that 70.4% consider their new homes as permanent residences. BUILDER editor, John McManus said that boomers wanted “engineering not just for what they [need now], but what can be anticipated [over the next 10 or 15 years]”.
Case Study: Builder, Taylor Morrison, partnered with BUILDER to create a show home designed for the 55-plus crowd: the NEXTadventure Home. The floor plan relied on new research into the Boomer generation by Hanley Wood. 48.6% of boomer home buyers want a house between 2,000 and 3,000 square feet. The NEXTadventure home comes in at a little over 2,200 square feet. The research also indicated that an open floor plan ready for entertaining—both indoors and out—was also important. The home featured an outdoor entertaining space and big kitchen that represented a “nimbleness” in the active lifestyle of this generation, McManus commented. The research found that customization is important to boomers who want to keep making memories through the golden years. Features like a unique shower and large wine bar in the NEXTadventure house made it a perfect fit for an active lifestyle that transitions to an age-in-place option for boomers.
Whether you focus your energy on millennials or boomers, both are excellent opportunities. Offer them what they want and leverage the two biggest segments of the industry.
