Measuring the High-End Seniors Housing Market PCBC Adam Ducker | - PowerPoint PPT Presentation

Measuring the High-End Seniors Housing Market PCBC Adam Ducker | June 24, 2011

ABOUT THE DATA • Analysis based on a March 2010 paper survey conducted by the American Affluence Research Center, with the participation of RCLCO • Results based on 405 completed surveys p y • Respondents represent the top 10% of Americans in terms of “net worth,” or more than $800,000, reflecting both home equity and net investible assets • Survey participants reflect a broad range of ages (1/3<50), but were asked to “contemplate a change of lifestyle related to retirement and/or their children leaving home.” g Percentile of U.S. % of Rebalanced Net Worth Households Survey Results $8000K $1 5M $8000K-$1.5M 90 95 90-95 50% 50% $1.5M-5.9M 95-99 40% $6M+ 99+ 10% Total 90-100 100% 1 04-9186.10

THE VAST MAJORITY OF AMERICANS STILL PLAN ON “AGING IN PLACE” Empty Nester Housing Plans All respondents 70% 65% 60% 50% 40% 30% 20% 14% 14% 10% 4% 4% 3% 3% 0% Will remain in current Will retire to a resort or Will move to different Will move to Will move to home other location home in my condominium condominium in suburb metropolitan area downtown in my of my current metro current metro area c rrent metro area area area N=391 2 04-9186.10

YOUNGER HOUSEHOLDS EXPRESS HIGHER LIKELIHOOD TO CHANGE HOUSING MODE Empty Nesters Who Intend to Remain in Current Home All respondents by age 72% 71% 70% 68% 66% 64% 63% 62% 60% 59% 58% 56% 54% 52% < 50 Years Old 50-59 Years Old 60+ Years Old N=391 3 04-9186.10

NORTHEASTERNERS/MIDWESTERNERS MORE LIKELY TO CHANGE HOUSING IN EMPTY NEST Empty Nests Who Intend to Change Housing During Empty Nester-hood All respondents by region 50% 46% 44% 44% 45% 40% 38% 35% 30% 25% 22% 20% 15% 10% 5% 0% East South Central West N= 139 (East), 40 (South), 31 (Central), 157 (West) 4 04-9186.10

OF HOUSEHOLDS THAT MOVE - 60% WILL STAY LOCAL, 40% T0 MOVE TO RESORT LOCATION Empty Nester Housing Plans All respondents who intend to move Will move to different home in my metropolitan 40% area Will move to condominium in suburb of my current 7% metro area Will move to condominium downtown in my current 12% metro area Will retire to a resort or other location 40% 0% 10% 20% 30% 40% 50% N=117 5 04-9186.10

EASTERNERS MOST LIKELY TO MOVE TO A RESORT THAN WESTERNERS Empty Nester Interest in Resort Setting - West Coast versus East Coast All respondents who intend to move 60% 48% 50% 40% 40% 33% 30% 20% 10% 0% Will retire to a resort or other location East West N=85 6 04-9186.10

LARGER UNITS REQUIRED TO ACCOMMODATE THIS BUYER Empty Nest Condominium Size Requirements All respondents who would consider condominiums 2,000+ Sq. Fit 45% 1,500-2,000 Sq. Ft. 42% 1,000-1,500 Sq. Ft. 10% <1,000 Sq. Ft. 1% 0% 10% 20% 30% 40% 50% N=231 Note” 41% would not consider condominium under any circumstance 7 04-9186.10

MOST BUYERS STILL SEE CONDOMINIUMS AS A BUY-DOWN OPTION Condominium Buy-Down Expectations All respondents who would consider condominiums 20%+ less than value of current 69% home 10%-20% less than value of 19% current home Same value as current home 9% More than value of current home 4% 0% 10% 20% 30% 40% 50% 60% 70% 80% N=231 8 04-9186.10

BUYERS EQUALLY CONCERNED WITH UNIT FEATURES AND LOCATION FACTORS Most Important Features for Condominium Buyers All respondents who would consider condominiums indicating one of top three factors Proximity to Restaurants/Retail y 58% 58% Amenities such as pool 35% Views Views 35% 35% Parking 34% Proximity to Cultural Venues Proximity to Cultural Venues 26% 26% Safety 25% Social Opportunities within the 18% 18% Community Storage 16% 0% 10% 20% 30% 40% 50% 60% 70% N=231 9 04-9186.10

STATED INTEREST IN SECOND HOME PURCHASE REBOUNDING SIGNIFICANTLY Intent to Purchase a Second Home Next Twelve Months All Respondents 2002-2011 1 % 15% 10% 5% 0% Spring Fall '02 Spring Fall '03 Spring Fall '04 Spring Fall '05 Spring Fall '06 Spring Fall '07 Spring Fall '08 Spring Fall '09 Spring Fall '10 Spring '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 All Respondents All Respondents Wealth $6M+ Wealth $6M+ N=405 10 04-9186.10

SECOND HOME BUYING INTEREST MOST SIGNIFICANT AMONG <50 YEAR-OLDS Interest in Second Home Purchase by Age All respondents 7% 7% 6% 5% 4% 3% 3% 3% 2% 2% 2% 2% 2% 1% 1% 0% Will build a new vacation house in the next 12 months Will purchase an existing vacation residence in the next 12 months <50 50-59 60+ N=405 11 04-9186.10

INTEREST IN DESTINATION CLUB AND PRC SURPRISINGLY HIGH Second Home Types Respondents Would Seriously Consider Buying in the Next 12 Months All respondents who would seriously consider a second home purchase 45% 43% 40% 35% 35% 30% 30% 25% 20% 20% 15% 15% 15% 13% 10% 5% 0% Private Residence Club Destination Club Second home for Second home for more Timeshare seasonal use frequent use N=40 N=40 Note: Respondents allowed multiple answers so percentages do not sum to 100% 12 04-9186.10

MAJOR U.S. METROS WITH HIGH NUMBER OF HOUSEHOLDS 55-74 WITH NET WEALTH $500K+ Interest in Second Home Purchase by Age All respondents Seattle 148,000 Minneapolis Boston 113,000 220,000 New York Chicago Philly y Detroit Detroit 794,000 794 000 325 000 325,000 238,000 Denver 166,000 Bay Area Washington 98,000 347,000 St. Louis 282,000 90,000 Los Angeles Los Angeles 489,000 Atlanta Phoenix 205,000 121,000 San Diego Dallas 91,000 , 205,000 , Houston 183,000 9M HouseholdsTotal in the U.S. Miami a N t Note: $500K in net wealth is estimated to roughly $500K i t lth i ti t d t hl 157,000 equate to wealth and home equity totaling $800K 13 04-9186.10

TOTAL MARKET DEPTH OF AFFLUENT EMPTY NESTERS RELOCATING TO RESORTS Interest in Second Home Purchase by Age All respondents Seattle 10,700 Minneapolis Boston 23,800 48,700 New York Chicago Philly y Detroit Detroit 68,600 68 600 175 000 175,000 52,500 Denver 35,100 Bay Area 7,100 Washington 25,200 St. Louis 62,300 19,000 Los Angeles Los Angeles 35,500 Atlanta Phoenix 25,700 8,800 San Diego Dallas 6,600 , 25,700 25,700 Houston 22,900 Miami a 19,600 14 04-9186.10

TOTAL MARKET DEPTH OF AFFLUENT EMPTY NESTERS RELOCATING TO DOWNTOWN CONDOS Interest in Second Home Purchase by Age All respondents Seattle 3,900 Minneapolis Boston 5,900 12,200 New York Chicago Philly y Detroit Detroit 17,200 17 200 43 800 43,800 13,100 Denver 8,800 Bay Area 2,600 Washington 9,200 St. Louis 15,600 4,800 Los Angeles Los Angeles 12,900 Atlanta Phoenix 9,300 3,200 San Diego Dallas 2,400 , 9,400 9,400 Houston 8,300 Miami a 7,100 15 04-9186.10

TOTAL MARKET DEPTH OF AFFLUENT EMPTY NESTERS RELOCATING TO SUBURBAN CONDOS Interest in Second Home Purchase by Age All respondents Seattle 2,300 Minneapolis Boston 3,500 7,100 New York Chicago Philly y Detroit Detroit 10,000 10 000 25 600 25,600 7,700 Denver 5,100 Bay Area 1,500 Washington 5,300 St. Louis 9,100 2,800 Los Angeles Los Angeles 7,500 Atlanta Phoenix 5,400 1,900 San Diego Dallas 1,400 , 5,500 5,500 Houston 4,800 Miami a 4,200 16 04-9186.10

KEY TAKE-AWAYS INCREASE THE “NEED” TO MOVE AS BOOMERS AGE • Most Americans will remain in their current home as long as they can, builder/developers can encourage empty nesters to choose new and better housing by: g y • Delivering “smarter” housing that is more energy efficient and has more predictable occupancy costs • Promoting the health benefits of sustainably built housing • Fully embracing emerging technology (particularly around healthfulness) that can improve and pro long life healthfulness) that can improve and pro long life • Delivering housing in retail and service rich locations that reduces reliance on the automobile 17 04-9186.10

KEY TAKE-AWAYS EMERGING SEGMENTATION IN RELOATION PREFERENCES • Among those empty nesters who intend to move, there is interest in three distinct product segments each of which represents a unique and compelling opportunity: p q p g pp y • Suburban/exurban low density housing locations – 40% of the market • Resort or other non-metropolitan locations including college towns and other places – 40% of the market • High-density product in urban and urbanizing suburban • High-density product in urban and urbanizing suburban locations – 20% of the market 18 04-9186.10

KEY TAKE-AWAYS ANTICIPATE OBJECTIONS TO HIGH-DENSITY SOLUTIONS • The consumer expects to “buy down” – prepare to educate regarding the health and lifestyle benefits of high-density housing • The consumer is still expecting a large unit – floor plans need to be efficient and well conceived so that the buyers can visualize their lives in the unit (it will be hard to sell off paper ); in- their lives in the unit (it will be hard to sell “off paper”); in building storage a must • Amenitize buildings smartly but generously, including facilities that allow the move-down customer to have flex space when needed – guest bedrooms, grand/catered dining rooms, guest parking, etc. g 19 04-9186.10