Remember when they used to say 40 is the new 30? The baby boomers have aged and in doing so, have redefined what it is to retire with a completely new outlook and demographic than the seniors that came before them. Their financial resources, their extended life terms, their very tastes are going to disrupt and alter the landscape for senior housing as never before.
By redefining retirement, age 65 becomes more of a birthday than a transformative date of dislocation. More folks than ever before are adding more time for their careers and for their leisure, often way past the traditional retirement age. Retirement planning for seniors is far more complicated today. Issues of money, resources, and health are just pieces of the greater puzzle of an extended life. There is always the senior concern of outliving your resources and money and the ever increasing costs of medical care and geriatric health needs and services overwhelming any savings. Many seniors contend with the prospect or the fear, whether real or imagined, of not enough fuel in the tank.
The confluence of money and health makes for a complicated and unsettling journey for many seniors as prospective buyers as they prepare and account for their aging years with any decision making. Some seniors are affluent, others struggle with even modest means. Many fall in between. For seller investors savvy enough to tap into this burgeoning and often financially infused senior market, the rewards for making his or her claim with this aged demographic can be lucrative indeed. For those experienced in senior living needs, although it may be near impossible to be all things to all seniors, and often challenging, the rewards for those efforts could be immense and the returns large.
As of 2009, those seniors reaching age 65 could expect to live a score or more years. The over 85 population is increasing dramatically, with those attaining that age expected to triple in numbers. As a result, seller investors, business developers, and entrepreneurs need to be fully prepared for the growth onslaught of this aged group.
A large majority, 63%, in fact, by a survey by the Demand Institute in 2014, of baby boomers want to remain and age in place. That same survey established that 85% do so by choice. Experts who analyze senior trends say the move by seniors to downsize and relocate, while certainly true for some, is pretty much a myth. Those that do so choose to do so for a multitude of reasons, hence the challenge to the investor targeting this group.
These same experts are observing there is a movement by some seniors out of the suburbs and into the cities. Unfortunately, there is far more demand than supply. The Washington Post reported “relatively few viable residential options for seniors exist within central cities or densely developed urban areas near city centers. Most senior housing is located instead in low density suburbs or in small towns where land is cheap and development costs are low.” Then there is the trend toward senior living facilities and the exponential growth of senior retirement communities, both subjects too involved to be detailed here, but well worth noting.
Knowing all this can be a boon for the savvy investor taking action, if this niche is of interest.