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Real Estate: Graying And Growing
"Why did we move to Florida? Mostly because of the weather and the lower taxes," says Delores Peterson, 65. "My husband is an avid golfer, and I like to swim in the clubhouse pool. We have a nice lot with trees that remind me of our home up north. I feel just as safe here, and that was important to me. Living in Florida is going to be a lot better for us."
Every year, tens of thousands of retirees like the Petersons move to Florida from the Midwest, the Northeast and other parts of the U.S. About 12% to 15% of all new Florida residents are 65 and over -- a percentage that has held steady for several decades.
Nationally, the ranks of retirees won't begin increasing until the year 2010, when the first baby boomers hit 65. However, corporate downsizings and consolidations are creating more early retirements, which could boost demand for retirement housing significantly. In addition, the number of Americans in their late 50s and early 60s is growing rapidly, and many people in this demographic segment buy second homes in Florida as a base for retirement.
Although other states aggressively court retirees, Florida is still the magic kingdom for retirement living. Stan Smith, director of the University of Florida's Bureau of Economic and Business Research (BEBR), expects Florida to continue to attract a large share of the nation's retirees for the foreseeable future. In 1990, 7.6% of the U.S. population age 65 and over lived in Florida; by 2000, the state's share is expected to expand to 8.6%. Census projections also show that Florida's share of the 55-64 age group will increase, from 6.0% to 6.6%.
Florida builders who have ignored the changing retirement market are missing a "golden years" opportunity to increase overall demand for their products. Recognizing the changing needs of this group and putting together a strong marketing effort are the two keys to success.
Statistically speaking, the new generation of Florida retirees is healthier and more active than previous ones. Many are drawn to adult-oriented communities that offer fitness centers, active social clubs, golf, swimming and tennis. Others prefer a mixed-age neighborhood with working-age adults and young children as well as fellow retirees.
One of the biggest misconceptions is that large-scale adult-only communities like Century Village dominate the state's retiree market. Our firm's extensive research -- which goes back to the original Sun City near Phoenix, Arizona, the largest retirement housing community in America -- has found that a majority of retirees prefer an insulated, not isolated, lifestyle.
How well the state's builders respond to the changing and more diversified demands of today's retiree market may determine whether Florida can continue to attract this generally affluent population group in the face of increased competition from other states.
With a median age of 36.4 years among its residents, according to 1990 census figures, Florida is the oldest state in the U.S., which has an overall median age of 32.9 years. According to BEBR, Florida is also first in the nation in percentage of residents over age 65 -- 18.2% in 1990, versus 12.6% nationwide.
Among the varied housing that can be marketed successfully to retirees are townhouses in Fort Lauderdale's Las Olas Boulevard neighborhood, a beach front community in Destin or a single-family home subdivision with a common pool area in Fort Myers. "Retirees have a wide range of housing demands," says Carol Taylor West, director of economic forecasting at BEBR.
While Florida's oldest residents, 75 and over, will likely need some type of assisted living and nursing home care, younger retirees are healthy and independent, and plan to stay that way.
"Twenty years ago the adult market was generally older and far less active," says Gene Berns, vice president, Oriole Homes, which has built more than 15,000 adult residences in South Florida since the 1970s. "Retirees assumed they wouldn't live as long, and their mentality and lifestyle was in keeping with that attitude. Now people know they'll live longer and are working on maintaining a positive lifestyle. They want to be more active and they want to be social, building a new set of friends that will last for many years."
Today's retirees are making their decisions about where to settle based largely on climate, location, price, lifestyle and amenities. They typically come down early in the winter season, tour part of the state, talk to their friends and make a decision about where they want to settle.
Urban areas in Florida such as Miami, Fort Lauderdale, Tampa and St. Petersburg, with their traffic congestion, higher crime rates and more expensive housing, are proving less attractive to new retirees than developments in rural areas.
Southwest and Central Florida continue to lead the state in attracting new retirees, according to Stan Smith, BEBR director. Charlotte County in the southwest has the highest percentage of people over 65 in the state -- an estimated 36.1%, compared with the statewide average of 18.7%. Stretching across the center of the state, Pasco, Hernando, Marion, Lake, Volusia and Flagler counties are successfully attracting more retirees.
However, not all retirees prefer a rural location. College communities can offer a stimulating lifestyle for senior citizens. The University of Miami, for instance, has an Institute for Retired Professionals, whose 400 members attend college classes and hold their own seminars and lectures.
Price remains an overriding consideration for many retirees, who must depend on pensions, savings and Social Security. Those who can't afford a $250,000-plus home in a Palm Beach County country club community may settle for a $90,000 single-family home in Daytona Beach, or a $35,000 manufactured home in Lakeland. The price issue is compounded by retirees' greater concerns about their children's economic well-being, as shown in consumer surveys, which lead them to be more conservative in their own housing purchases.
"Diversity of product and price range is very important for today's builders," Berns says. "There's such a wide individuality out there, and you can sell out faster by offering different price points." At Coral Lakes, a new 1,300-home Boynton Beach community, Oriole is offering 14 models, ranging from lakefront apartments in the $90,000s to single-family homes costing up to $180,000.
After location and price, the primary concerns of retirees are preserving an active lifestyle and ensuring personal security, according to Florida builders. That's why many new adult developments include amenities such as large clubhouses, indoor-outdoor swimming pools, fitness centers, tennis courts, privacy walls, gated entrances and 24-hour emergency telecom hookups.
"Our communities are being developed with a more active retiree in mind," says Isaac Heimbinder, president, co-chief executive officer and chief operating officer of U.S. Home Corp., a Houston company that's built more than 20,000 retirement homes in Florida. "Our newer communities all have exercise facilities. There aren't as many shuffleboard courts, but the clubhouses are larger, with social directors to organize clubs, outings and evening activities."
Retirees in their late 50s and early 60s are not as concerned as older Floridians with having medical facilities on site. "It is more important for them to know that medical services are available in the community, not miles away," Heimbinder says. "Our customer would be unhappy to see a hospital, nursing home or congregate care facility at the entrance to the community."
In serving the retiree market effectively, even little things can make a big difference. For instance, electrical sockets in U.S. Home adult communities are 18 inches off the floor, rather than the normal 12 inches, so the owners won't have to bend over as far. Thermostats are placed at eye level to make them easier to see. Lighting is generally brighter. "You have to take the needs of your buyers into account," says Heimbinder. "Retirees have some needs that are different from buyers in regular communities."
One of U.S. Home's most successful adult communities is Timber Pines in Hernando County, honored by the National Association of Homebuilders in 1995 as the best designed retirement community in America.
Heimbinder says about 60% of buyers in U.S. Home retirement communities like Timber Pines are from out of state and 40% are already Floridians. "Most of our in-state customers are people who retired a few years earlier, bought somewhere else, then found they didn't have anything to do. They like our communities because they're full of activities. Many of them have a busier schedule than I do."
At Timber Pines, approximately 3,000 of 3,500 homes have been completed, and Bob Fertig, North Florida division president, expects to sell out in two years. Prices range from attached villas in the $90,000s to single-family homes in the low $100s and luxury homes in the $150s.
Looking back to the early 1970s, Fertig says U.S. Home's first Florida retirement community, 1,700-home Timber Oaks in Port Richey, had only two tennis courts, which were rarely used. "Today, at Timber Pines, we have eight tennis courts and they're full all the time," Fertig says. The clubhouse at Timber Pines includes treadmills, exercise bikes and aerobics classes. YMCA-trained instructors develop individualized physical fitness programs for residents. "People are there every morning working out," Fertig says. "That's another big difference from 20 years ago."
It remains to be seen whether Florida developers can continue to attract a large share of relocating retirees.
The number of experienced retirement developers in Florida has declined in the 1990s, and only a small number of companies like U.S. Home, Lennar, Florida Design Communities and Oriole still have the financial resources to build large-scale adult communities. It is up to smaller builders to pick up the slack and offer a more varied mix of retirement housing.
