I started working with senior citizens, elderly renters or older residents–as you may wish to call them–many years ago. Having done a vast amount of study of this group of homeowners, renters, and ultimately nursing and congregate care residents has provided a wealth of information on who they are and what they want. Recently, this aging cohort of prospective renters and condo buyers has generated a huge amount of interest on the part of management companies and owners. It seems an aging population is becoming an emerging market segment.
Let’s take a run at the numbers:
As of July 1, 2009, there were 39.6 million people 65 years of age and older. Just between 2008 and 2009, this age group jumped up by 770,699. Considering they now make up about 13 percent of the population, that’s an extraordinary change in conditions.
Fast forward to 2050, and the estimates provide for 88.5 million people age 65 and older, which will represent about 20 percent of the total U.S. population.
Currently the projected number of echo-elders worldwide above the age of 65 is 545 million but is expected to leap to 1.55 billion by 2050, effectively increasing the population from around 7.5 percent to roughly 17 percent globally.
Clearly, this is a generation that deserves attention from marketers and owner/developers. While there are quite a few accomplished and financially successful prospects in this age range, the average median income in 2009 for households with householders 65 and older was $31,354, compared to the median income for all households at $49,777. Over time, that will catch up as passive wealth is transferred into income-generating activities.
So the leading question is, what do they want?
There is no simple answer, but I can share some observations, proven out over many years of working with this population. I like these people, and find them fascinating subjects for study and discussion. Once you get a hold of them and can get their cooperation (focus groups and intercepts take a lot of patience) and sort through the dozens of stories about life, grandchildren, dry cleaning, early-bird specials and other challenges of living well into your 80s and 90s, you start to see a wonderful consumer. Here is some of what they’re thinking:
- They want to age in place. 60 may be the new 60, but this population doesn’t think they’re “old” in any sense of that word until health, family members or their ability to care for themselves changes their outlook. And even then, we’re talking about someone closer to 75, not 65.
- Age-restricted housing means a quiet quality of life with no school-bus stops, sports teams or other noise contributors. They’re not anti-social in any way, and in fact are quite active and social, it’s just that their focus has changed to wanting a more societally conscious and friendly lifestyle with less grass cutting and weeding.
- They like to rent. One of the old jokes about the elderly is that a long-term commitment is a magazine subscription. The reality is that this population is still pretty mobile, rents often for extended periods before buying or committing to a long-term housing alternative in a new area, and is happy to pay rent. From a management perspective, they’re good renters in all respects and well liked in most communities.
When we get into their housing preferences, it becomes more complicated, and the time horizons shorten. Large luxury kitchens as the center of their entertainment are important, but they don’t have to own them. Easy access to vehicle parking and local services rate high on the list, but so to do inter-urban locations and dense suburbs. Building out a community specifically for echo-elders isn’t worthwhile, but incorporating features that attract them, especially in more generous units, will provide a lift for most properties.
This booming cluster of future renters is becoming a more important force in property management, and yet we still see the focus on Gen Y. It seems it would be a great idea to cater to both.
Jack Kern is the Managing Director of Kern Investment Research, LLC and a veteran of thousands of hours working with echo-elders, a phrase the firm coined when the previous term “old folks” turned out to be unworkable. In both focus panels and intercepts Jack has developed an expertise in understanding the aging consumer and renter cohort. Jack can be reached at [email protected] or 301.601.1900.