Active Adults Playing a Huge Role in Home Builder’s Positive Outlook.
Baby Boomers are entering the housing market in droves, some as first time buyers, others downsizing or relocating to a more retirement-friendly climate. The vacation home market in Arizona has seen a deluge of Boomers on the cusp of retirement, looking to bring a little more sunshine into their lives. The demand for Active Adult communities has cause home builders to take a second look at development of 55+ neighborhoods with all the accompanying amenities. Many new planned developments include an Active Adult neighborhood. Eastmark in Mesa, Arizona is the perfect example.
Home builder confidence in the single-family 55-plus housing market is riding a wave brought on by the thriving baby boomer crowd, which promises to be one of the more predominant groups in real estate over the next decade. According to the National Association of Home Builders (NAHB) the 55+ Housing Market Index registered it’s highest numbers since first recorded in 2008.
“Builders and developers in [the 55-plus] market segment are…encouraged by the fact that for the next 15 years, 10,000 baby boomers will be turning 65 every day,” said Dennis Cunningham, chairman of the NAHB 55+ Housing Industry Council, in a statement. “The consistent pressure of this age group wanting to downsize from a large home, shifting to other regions of the country or just simply looking for a newer home or community also play a key role in the Index movement.”
Home builders’ confidence got an additional lift on the promise of a new administration, which has shown optimism for more ideal business conditions.
“The significant increase in the Index reading is attributed partly to a post-election boost, as many builders and developers are encouraged by President Trump’s commitment to cut burdensome regulations that negatively impact small businesses,” Cunningham said.
Home builders’ expectations regarding present and expected single-family home sales in the 55-plus market both reached Index-highs in the fourth quarter, up to 74 and 75, in order, while expected homebuyer traffic rose two points to 49. Home builders’ expectations regarding multifamily condominium sales in the 55-plus market, however, fell one point to 50, while expected sales rose one point to 52 and expected homebuyer traffic fell three points to 35. Condominiums still suffer under outdated government regulations, meant to stabilize the housing market during the recession. Both builders and Realtors have realized for years that it’s time for these regulations to go, as they unfairly penalize condo owners and cripple the condominium market. Home buyers wanting to own a Condominium are bumping up against these financing road blocks and finding it impossible to purchase the home of their dreams.
“The strong performance of the 55+ HMI at the end of 2016 was consistent with recent increases in broader measures of the housing market, including new home sales and the NAHB/Wells Fargo HMI,” says NAHB Chief Economist Robert Dietz. “We expect continued growth in the 55-plus market in 2017, although builders in many places will still face challenges in finding adequate supplies of inputs like labor and lots.”
Source: National Association of Home Builders (NAHB) Reprinted with permission from RISMedia. ©2017. All rights reserved.
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Bill Salvatore / Arizona Elite Properties
Residential Sales, Marketing, and Property Management
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