As you’ve probably already noticed, baby boomers are starting to retire. As this comes to fruition they often:
- Move and sell their property, OR
- Stay but undergo remodel/repair
Let’s focus on Option 1. Because older sellers tend to occupy their homes for a longer period of time, when they are ready to sell, their older, sometimes outdated homes are often more affordable to buyers. The Joint Center for Housing Services—Harvard University (“JCHS”) reports that between 1997-2007, 75% of sellers over 55 sold to younger buyers.
Now, why should you care about this? Why does it matter?
It’s simple, really. According to a report by JCHS, “turnover generates a disproportionate share of home improvement activity.” This is most applicable to buyers. Buyers often make extensive improvements shortly after their home purchase. Although these statistics are difficult to track, this JCHS report relied on census data from the American Housing Survey to come to their own educated conclusions. They found that during a 2-year period, buyers spent considerably more than sellers and non-movers. In addition, buyers who purchased a home from an older seller spent more on home improvements than buyers from other age groups.
So, if younger buyers are buying older homes with less disposable income to spend on home improvements, how can contractors sell to them?
Common sense tells us that young, new home owners probably have little “do-it-yourself” experience. They also may have less cash to pay for a job in full up-front. Lastly, they want (and, in some cases), need to update their new property for their own lifestyle.
Younger buyers are only one group of people that you may be able to target for business. Check back with us to see some information on baby boomers who choose to stay in their home and remodel.