We recently published an article related to real estate trends for millennials, focused on the best cities in which to buy a home. Looking at the other end of the age spectrum, there is also a great deal of interest in the niche market of seniors. It is worthwhile to note that when we are referring to ‘seniors,’ we mean individuals 55 years and older. For while the government defines ‘seniors’ as those 65, or in some cases 60, years or older, many sources, including as realtor designations, include those as young as 55 in recognition that many such individuals may plan for their retirement 5 or 10 years in advance of the fact.
Both Canada and the U.S., are seeing a larger portion of its population entering its seniors phase, with a predicted increase over the next decade. Here is a reference to the terminology based on the year born:
- Generation Z were born in 2001 or later
- Millennials (a.k.a Gen Y) were born between 1980-1990
- Gen X were born between 1965-1979
- Baby Boomers were born between 1946-1964
- Mature/Silent Generation were born between 1927-1945
- GI Generation were between 1901-1926
In Canada, approximately 29% of the population are baby boomers, while in the United States potential clients aged 55 and older account for 26%.
There are a number of reasons why realtors focus on clients who are 55 years of age or older, regardless of whether they are buying or selling. The seniors’ market account for the second largest group of sellers, behind the Gen X sellers. When it comes to habit, motivation and priorities, seniors have a different trend compared to other generations.
Seniors are no longer retiring at the age of 60 or 65 and are remaining longer in the workforce compared to previous decades. This can be due to a variety of reasons, ranging anywhere from better health to requirement of funds. This shift in the workforce translates to different lifestyle and housing needs for seniors as well. It’s a misconception to assume seniors are following the same trends as in the past.
Trends with Senior Buyers
An advantage of working with seniors who are buying a home, is that the buying process is typically 30% faster than with buyers from other generations. The average homebuyer purchases a property after 11 weeks, while seniors purchase after only 8 weeks. Their lifestyle habits play a large role in determining where they will move. They tend to place their priority on being closer to family, friends and health facilities. They are also more likely to move further distances (30 miles) compared to younger millennials, who tend to stay closer to home (within 10 miles). Another trend among senior buyers, is that they are more likely to purchase a new home, and plan on living in the property for at least 15 years. New homes typically have less upkeep, maintenance issues and overall have less requirement for improvements compared to older homes.
Age group of buyers*:
- 50-59 years of age accounted for 16% of home buyers in the U.S.
- 60-68 years of age accounted for 15% of home buyers in the U.S.
- 69- 89 years of age account for 10% of home buyers in the U.S.
Trends with Senior Sellers
Trends show that seniors’ motivation to sell their home include moving to be closer to family and friends, retirement and downsizing. Seniors who sold their home, and purchased another, bought a smaller property with a lower cost than their previous home. Senior sellers were most likely to sell their home for 100% or more of the asking price, compared to other generations. The satisfaction rate with their realtor increased as the sellers got older, leading to a higher probability of referrals and recommendations. This may be a result of looking to downsize and placing focus on other priorities, with only a ¼ of the group selling to move into a retirement home.
Age group of Sellers*:
- 50-59 years of age accounted for 20% of home sellers in the U.S.
- 60-68 years of age accounted for 23% of home sellers in the U.S.
- 69- 89 years of age account for 16% of home sellers in the U.S.
With a shorter buying process, higher rate of agent satisfaction and one of the largest age segment, realtors have realized that the seniors market may be a smart focus. And in addition to the above, realtors also report developing a strong personal connection with their clientele. The ability to fulfil personal pleasure in helping the older generation settle into a lifestyle which brings them the most satisfaction, and the motivation to work for the best interest of a senior client serves as a driving force for real estate agents. Agents that specialize and promote themselves with realtor designations, understand their market, opportunities and the change in mentality required when working with senior clients, for a better outcome.
For agents interested in realtor designations related to seniors, you can visit the Certified Senior Real Estate Expert designation and explore the designation for free, to see if it meets your business and personal objectives.