The first rule of marketing is to know your customers. Understanding what they need, want, and fear is the foundation for success. The real estate market has changed. Today, baby boomers dominate, accounting for 39% of all home buyers and 52% of all home sellers.
Known as “peak 65,” by 2024, more than 12,000 people will turn 65 every day. Be 65 years or older. Today’s expensive and limited housing inventory creates a scarcity mentality that makes it difficult for real estate agents to provide suitable housing for an aging population.
Retirement Trifecta
To successfully retire, address the challenges and manage risks faced by baby boomers, they need to safeguard their personal, financial trio of:
Living income, aged care and permanent housing.
These critical needs are the foundation of retirement planning, and the “peak 65” demographic will largely reshape housing, real estate and lending for decades to come.
To understand your baby boomer customers, you need to know what they fear most. In this age of longevity, when baby boomers must plan for life decades after work, the biggest fear is running out of money. In my more than forty years of experience working with baby boomers, the biggest fear is that they will lose their independence and become a burden to their children if they run out of money.
Accommodate three consecutive wins
Those real estate agents, builders and sponsors who choose to serve this massive market shift will need to adapt to the retirement trifecta. Baby boomers value relationships with these providers who customize solutions to meet their needs and their desire to retire.
Likewise, the trifecta is:
- living income: In retirement, baby boomers must establish adequate and sustainable income streams to meet the rising cost of living in this new era of inflation.
- Care for aging: Aging is a family affair that requires financial and care strategies and cash to pay for it.
- forever housing: Baby boomers must secure safe and age-appropriate housing during all stages of retirement.
Housing costs can become the number one expense in retirement. Since 78% of baby boomers surveyed want to age in place, the costs of home improvements and maintenance need to be carefully planned.
Baby boomers’ pursuit of the trifecta requires us to understand and meet their immediate retirement needs. A housing professional’s value proposition must extend beyond building and selling homes and originating mortgage transactions. The housing industry must provide real solutions to the challenges faced by a rapidly growing, age-focused population. Forward-thinking industry professionals will adapt their services and they will thrive and help usher in a great new era of American housing.
Housing Wealth Solutions
Baby boomers have created more housing wealth than any other generation in history. Today, baby boomers have approximately $13 trillion in available home equity. By the end of this decade, baby boomers’ home equity could grow to more than $20 trillion. Today, baby boomers live with the assets they need to help support their personal lives. Retirement Trifecta.
To solve the problems we face and unlock future possibilities, we as an industry must elevate the scope and purpose of our work. We need inspired residential architecture that embraces universal design. We need real estate agents trained in aging-in-place issues who are dedicated to guiding older buyers through purchasing decisions that provide long-term housing security. We also need a growing team of dedicated strategic mortgage planners dedicated to providing home equity conversion solutions to meet the needs of the retirement trifecta.
From my experience as a home builder and mortgage planning expert, serving the housing needs of homeowners at over 4,000 kitchen tables since 1976, I can confidently share this with you This fact.
“The decision people make that has the greatest impact on their quality of life is the home they choose to live in.”
Home is where family happens, and we who provide housing have the great privilege of making the dreams of those we serve possible through our life’s work.
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