Singles, Retirees, Gen Y, New Wealthy New Markets to Tap
We scoured the latest studies to find the demographics that will mean the most to your business. While retooling your marketing program, consider these groups of prospective buyers and sellers.
For decades, Florida buyers could typically be sorted into well-defined categories: families, retirees from “up North” and affluent second-home buyers from around the world, to name a few. While those buying patterns are still in place, the Florida market has changed significantly in recent years, creating new opportunities for real estate professionals seeking to enhance an overall marketing program.
Here is a closer look at three fast-evolving demographic groups that are already reshaping Florida’s buyer landscape. Singles
Michael Pappas, president of The Keyes Co./Realtors® in Miami, remembers when it was difficult for an unmarried woman to get a mortgage loan. “Nowadays, things are much better, and there’s no question that single women—and men—are an increasingly important part of Florida’s market,” he says.
According to the 2006 National Association of Realtors® (NAR) Profile of Home Buyers and Sellers, 22 percent of homes sold in the United States during 2006 were to single females and 9 percent were to single males. In the same study, NAR reported that the average female first-time homebuyer was 34 with an annual household income of $43,300.
“Clearly, single women help drive real estate sales in this country,” says Charlie Young, senior vice president for marketing of Coldwell Banker Real Estate Corp. in Parsippany, N.J. “This group has demonstrated its clout in the real estate market and has the economic capability to gain the American dream of homeownership.”
In a recent study, “Buying For Themselves: An Analysis of Unmarried Female Home Buyers,” the Joint Center for Housing Studies at Harvard University found that about 45 percent of single women who bought homes (in all age groups from divorcees to single moms to seniors) live alone and 30 percent are single parents without another adult in the home. In contrast, 55 percent of single male buyers live alone and 20 percent with an unrelated adult. In the study, only 15 percent of men who own homes are single parents.
Why are there so many single buyers—especially women? Lewis Goodkin, president of Goodkin Consulting in Miami, says that nationwide, higher salaries, delayed marriages, relationship breakups and longer lifespans are all contributing to the growth in single female buyers.
“A lot of singles—both women and men—are making good money and find that real estate is very appealing to them because of the tax savings,” he says. “Single buyers are an important factor in Florida’s second-home and investment markets, as well as in primary housing.”
And it’s important to note that single men are also buying homes in Florida, says Pam Picard, career counselor for Watson Realty in Orlando. “We’re seeing a growing trend where the single head of household is a male,” she says. “Finally, these single guys are realizing the advantages of homeownership. Rather than waiting until marriage to buy that first home, they’re buying now.”
As for selecting a home to meet their lifestyle, the singles market is highly diverse. A newly divorced mother with two young children might want an inexpensive single-family house, while a 25-year-old single man might be content with a one-bedroom condo.
In general, singles of both sexes usually prefer a smaller home that requires less maintenance, says Pappas. That could be a condominium in an urban setting, a suburban town home or a luxurious second home on the beach. “There’s no question that convenience and security are big factors,” he adds, “making a low-maintenance lifestyle in a condominium residence very appealing to many buyers.” Retirees
For decades, many retirement-age buyers came to Florida seeking a quiet lifestyle: walking on the beach, a round of golf and shopping at the mall. Today, buyers are looking for a more active lifestyle—especially the baby boomers in their late 50s and early 60s.
“We’re seeing a larger percentage of baby boomer second-home buyers versus the standard retiree,” says Phil Wood, president and CEO of John R. Wood, Realtors in Naples. “These new buyers often have a fair amount of wealth from their own careers or significant inheritances. They’re buying upscale homes for eventual retirement, but they’ve definitely not retired yet.”
Instead, many retirees age 55 and up are launching new careers as consultants, volunteering in the community, traveling frequently and cultivating new recreational activities, from rock climbing to sky diving. Ideally, their Florida home would have the latest technology, space for a personal fitness center and lots of choices in daily activities.
“Buyers want fitness centers and seminars that provide intellectual stimulation,” says Arlene Stiepleman, a sales associate with The Keys Co./Realtors in Coral Springs. “And it’s a plus if shopping centers are close to home, so there’s less need for a car,” she says.
While some older buyers will choose communities where most residents are 55 or over, others want to live in neighborhoods filled with families and young children. “Many buyers with a dog or cat will rule out communities that have restrictions on pets,” she says.
And as with all age segments, price and value are key components of the buying decision. “Florida will continue to be the No. 1 state in the second-home/preretirement market,” says Goodkin. “But with higher land prices [and property insurance costs], especially in the coastal areas, the real depth of this market will be in Central and Northern Florida.”
Goodkin points out that baby boom buyers fall into three distinct categories, based on their income and savings patterns. About 20 percent are affluent buyers who can afford luxury homes in prime locations. Another 20 percent are financially comfortable, but aren’t looking to upgrade their current lifestyle. “Some buyers in this category will actually be ‘down-buying,’ purchasing a smaller home than they can afford, with the expectation that they will be living longer and need to stretch their savings.”
The largest group of boomers, though, will face financial challenges in their retirement years, Goodkin says. In general, they have limited savings and their current home is usually their largest asset. “Cost factors are the most important consideration to this segment,” he says. “Some will be moving from high-cost to lower-cost areas in Florida; others will be downsizing from their current home. For the most part, these boomers will be looking to get the most bang for the buck.” Young Adults
Tired of living with parents or sharing an apartment with roommates, more Floridians in their late 20s and early 30s are buying their first homes. These “Generation Y,” or “Millennial,” adults make up a fast-growing segment of the Florida market.
“We’re seeing a new wave of young adult buyers,” says Pappas. “In many ways, they’re better equipped than any other generation. They use technology to research homes and neighborhoods and understand the value of ownership.”
Across the country, recent college graduates and young professionals are buying houses and condominiums. Data from the 2006 U.S. Census Bureau indicate that 42 percent of people ages 25–29 are already homeowners. And buyers in their 20s and 30s account for more than 50 percent of new-home purchases, according to the American Housing Survey conducted by the U.S. Commerce Department.
However, Goodkin cautions that many of those buyers were able to take advantage of flexible mortgage loans as well as parental financial support when making their purchases—two factors that have changed in the past year.
“Many graduates were able to take advantage of what I call ‘GI’ financing from ‘generous in-laws,’” says Goodkin. “Many parents took out loans on their own homes to help their kids get into a condo. That source of funding will be more limited because of today’s more restrictive credit climate.”
As for lifestyle, the Gen Y buyers often want to be in an urban setting that offers camaraderie and opportunities for socializing with other young adults. “They don’t mind the hubbub of a downtown, beachfront or college community,” Goodkin says.
Pam Picard, a career counselor for Watson Realty in Orlando, says Gen Y buyers are usually interested in smaller homes or condos, compared with their baby boomer parents. “They tend not to be homebodies,” she says. “They would rather be sitting on a sofa in the local coffee bar working on their laptop, where it’s easy for friends to stop by. And, generally, they’re more interested in condos and town homes, because they don’t want the maintenance responsibilities, like mowing the lawn, that come with a single-family home.”
By knowing the demographic trends, you can gear your marketing to reach a wide variety of prospective home buyers and sellers. Richard Westlund is a Miami-based freelance writer.