> New Homes
Building Active Adult? Don't Assume Everyone Is Rich
by Al Heavens
When it comes to active adult housing, the majority of builders in that niche are focusing on the higher end of the market. That's not difficult to understand. That's where the money is, or so builders think. But there is a large segment of the population climbing up into the 55-and-older segment that doesn't have huge stock portfolios or lots of money in the bank. But many do seem to have enough equity in their current houses that can buy them a reasonable home at a reasonable price. These buyers are teachers, police officers and people who work in the trades. They make up a substantial portion of the millions of baby boomers who are entering the over-55 active-adult market each year. Although they have seen the values of their current homes appreciate rapidly since the mid-1990s, these buyers focus on getting the most for what they pay. The houses they gravitate to are smaller -- 1,170 to 2,174 square feet (the typical new home has about 2,300 square feet, according to the National Association of Home Builders). So floor plans should be open and flexible to create the illusion of space. Although conventional wisdom suggests that active-adult housing be one-story, some buyers are willing to have a second floor, if the master bedroom is on the first floor. Storage is extremely important, since most of these people are moving out of houses that seem like barns by comparison. In many areas of the country, basements are not an option. So storage is offered elsewhere, including above the garage. Any storage space you can squeeze in will sell. And if the competition doesn't offer it, make sure you do. Such buyers visit a development repeatedly before coming to a decision. When they do make a decision, and if the builder has done his or her homework, these buyers will be saying that while they know the houses are more expensive, they also know that the builder has thought about their needs. Remember, this is an emotional decision. Lot size does not seem to be that important to these buyers. A lot of them are coming from townhouses in the cities, so a big yard isn't important. When some buyers do suggest that the lots are too small, you need to ask them what they are leaving behind and why. If the answer is an acre and that it is too much yard to maintain, the wind goes out of the argument. Although amenities such as golf courses, walking trails and clubhouses attract active-adult buyers in all income groups, you can't overdo it. Builders should be careful not to get carried away when outfitting these amenities. Clubhouses are a marketing tool, but if you focus too much on the interior merchandising, you'll hear the couple whispering, "I don't think this is for us." A builder needs to drum into the sales staff that if these people like you, they will listen to you, and if they trust you, they will buy from you. They also come to buy, not to be sold to, so don't try selling them on you. Let them make the decision. What seems to be selling to these buyers? Energy savings, for one thing. A growing percentage of new construction is part of the Energy Star program and is built and furnished with appliances in such a way that allows buyers to save about 25 percent on utility bills each year. In marketing energy savings, a builder needs to ask buyers how long they lived in their current house. If the answer is 20 years or more, it leaks heat and air conditioning, so saving energy will be a big selling point. Keep the house square, simple and make it furnishable. A square house is the least expensive to build and can easily be bumped out where the buyer wants to put an option. Studies are a popular option and are not expensive for a builder to add, since it can simply mean two walls and a floor that is flush with the living room. The configuration also provides storage space that can be turned into work space. Sunrooms and screened-in porches also are popular among these buyers. A five-fixture bath isn't as important as two walk-in closets. And a five-foot shower seems to sell better than a Jacuzzi hot tub that the kids will use when they visit, but the homeowners won't. If they want that they can go down to the swimming pool at the clubhouse. | 
