What Boomers WantNew study reveals leading-edge baby boomers' retirement home dreams.

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Of all the findings in “Every 8 Seconds,” the most controversial was these leading-edge boomers' reported lack of interest in family and friends, especially grandchildren, compared with average boomers. Only 59 percent identified spending time with the grandkids as a priority after age 60, compared with 80 percent of average boomers.

Yet this finding has a concrete effect on house design, too. “We struggle with how in tune [new retirees] are with their grandchildren,” says Michael Skea, vice president of marketing and sales for the northeast region of K. Hovnanian. “We do customer surveys, and on the grandchildren, we get conflicting information. If they want to see their grandchildren a lot, then we need more bedrooms and community attractions.”

If retiring boomers are really less interested in having adult children and grandchildren stay with them, then builders can build smaller houses with fewer bedrooms. But if these boomers want family to stay with them, houses must be larger, with more guest space. Either way, it's a product opportunity for the builder that accurately assesses the trend.

The idea of retirement homes was conceived in the United States, and the basic paradigm has been the single-family, detached home in suburbia. The home might be in a golf course or other gated community, but it was never multifamily, attached, or high-density housing.

A ROOM OF THEIR OWN: Although many boomers say they want one-story living, others say they wouldn't mind having a second floor. A seperate, second-floor suite for children and grandchildren is an appealing feature to 21 percent of boomers.

“Every 8 Seconds” opens new doors for builders of active adult or retirement housing. While about 89 percent of boomers currently live in the traditional single-family, detached home, only about 72 percent want to live in such a home in the future. As long as they can own their residence, multifamily buildings, such as co-ops and condos, appeal to 11 percent of boomers. Only 4 percent of this generation currently lives in such housing, so this market could grow as boomers retire. Townhomes, duplexes, and row houses are attractive to 15 percent of this group as well, and because only 6 percent of boomers currently live in this type of dwelling, again, opportunity awaits the builder that reads the local market correctly.

“We'll see a higher proportion of development in multifamily housing,” says Margaret Wylde, president of the consulting company Promatura Group. “One reason is land scarcity. A second reason is acceptance by customers of multifamily living, as long as they own. Sharing of walls is not as abhorrent to boomers as to their parents' generation.”

Toll Brothers builds single-family, multifamily, high-rise, and small, medium, and large attached and detached homes in cities and in beach communities. “[The survey] tells me that Toll Brothers' diverse approach is right,” says Kira McCarron, chief marketing officer and senior vice president of Toll Brothers. “There are many ways to serve the market.”

Or take Kushner Cos.' four-story, elevator-access, Waterford residential building in East Brunswick, N.J., or K. Hovnanian's Vista Pointe at Imperial Walk, a six-story condo tower in West New York, N.J. Both high-end, lavishly appointed projects owe their existence, at least in part, to New Jersey's extreme land shortage. “Land constraints in New Jersey led K. Hovnanian to develop products with density to build in semi-urban areas,” says Skea. “There is a market demand by people who want to stay in North New Jersey and have this type of highly amenitized, resort-at-home atmosphere.”

Suburbia is home to 73 percent of the “me” generation surveyed by DYG, but only 67 percent of them want to live in the 'burbs when they retire. County life calls 14 percent of the respondents, though 8 percent live there now. The big city beckons 16 percent of the boomers, while 18 percent are currently city dwellers. All of this suggests that there will be fewer boomers in the suburbs, more in the country, and about the same number in the cities.

McCarron is skeptical about these statistics. “I doubt the rural statements,” she says. “Cities are getting better. We are seeing sizable interest in city offerings from people in this category. The idea that people want to be pastoral—they aren't being realistic.”

At Shea Homes' active adult, age-restricted Trilogy Communities, the feeling is urban, but on a small scale. “We know there won't be a big movement to cities,” says Rick Andreen, president of Trilogy Communities. “We find [that there] is a desire for urban convenience but not the drawbacks.” Each master planned Trilogy Community has a “modern” urban core that is walkable, secure, and safe, complete with retail stores and large pedestrian walkways and trails. “We're seeing multiple small urban centers in the future,” says Andreen. “People live in suburban areas, but they have these small urban centers nearby with all the retail and entertainment. They are more than a village, but less than a city center.”

Toll Brothers entered the active adult market in 1999. “We knew we were following boomers into their next phase of life,” says Kira McCarron, chief marketing officer and senior vice president of the company. “We knew their retirement paradigm was not the same as their parents'. But we were hit between the eyes by how much luxury that they did want.” McCarron says Toll Brothers did anticipate a certain amount of extras, but not a quantity that would increase the price of a $400,000 house by another $200,000—just as an example. “It wasn't any one thing,” McCarron says. “It was just the entire volume.”

Although only one third of boomers surveyed by Hanley Wood and DYG. selected “luxurious” as a characteristic of their dream home, it's obvious that opulence and lavishness represent a huge opportunity for builders who cater to high-end boomers. Finding a way to put some luxury into mid-range or even lower-end housing products is a way for any builder to differentiate itself.

Boomers want functional and efficient spaces, but they also want homes that are open, airy, user-friendly and that seamlessly mix indoor and outdoor spaces. They want big master suites, spa-like master bathrooms, big state-of-the-art kitchens, casual gathering spaces. And they want green, energy-efficient, high-tech, environmentally-friendly homes. Add a dash of luxury, and there's an opportunity there for every builder.

Top 10 Dream Home Characteristics

SOURCE: “EVERY 8 SECONDS: AMERICAN HOUSING AS BOOMERS TURN 60,” SPONSORED BY HANLEY WOOD AND CONDUCTED BY DYG