NORTH CALDWELL, NJ-The beginning of construction of K. Hovnanian Homes’ Four Seasons at North Caldwell is more than just another new housing project--it’s a portent of the future, as aging baby boomers boost the active adult multifamily housing segment, according to recent reports.
Looking to shed the burdens of home maintenance, while maintaining the advantages of home ownership, boomers now are looking at selling the single-family home for a smaller condominium situation. Even so, location is critical. “Buyers want to be near their families, but they want the lifestyle and amenities,” including clubhouses and fitness center, says Sean Mulhall, a community manager for K. Hovnanian. Four Seasons units feature two bedrooms, two baths, and luxury amenities. The first units will be delivered in July.
The active adult housing market could continue to increase as ever more baby boomers hit age 55. According to the US Census bureau, there were 59.5 million US residents 55 and over in 2000, a number that had risen to 74.4 million by 2009.
Not that the sector is immune to the woes of the housing market overall. The National Association of Home Builders’ 55+ multifamily condo Housing Market Index closed 2010 down from the previous year, with current sales, expected sales and buyer traffic declining.
"The normal course of purchasing a new home in anticipation of or upon entering retirement has been interrupted by the fall in baby boomers' house values and reduction in their home equity," said NAHB chief economist David Crowe in a press statement. "Boomers are finding that the market for their current home remains soft and potential buyers cannot qualify for affordable mortgages. Even those with the ability to buy a new home are finding a limited selection, as builders cannot get loans to build homes."
And not all over 55-ers will chose to buy in age-qualified communities, notes “Housing Trends Update for the 55+ Market,” a January 2011 study by the NAHB, MetLife and Mature Market Institute. The share of 55+ household choosing active adult communities remains fairly steady at 3%. But the potential exists. According to the NAHB long-term forecast, the share of 55+ households is expected to grow to nearly 45% by 2020.
“As the number of Baby Boomer households appropriate for active adult housing increases over the next decade, the number of residents in these communities is likely to rise, even if their share among 55+ households remain stable,” the report says.
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