Blanche Evans is a writer/editor and CEO of evansEmedia. Formerly, she was a senior editor with Realty Times, where she was named by REALTOR® Magazine as one of the most influential people in the real estate industry.
Understanding Senior Buyers, Sellers Better
Three generational segments within the senior market have distinct characteristics.
February 1, 2004
In 2000, the U.S. Census Bureau counted 35 million people over 65 years of age. Most seniors are homeowners, and as many as one-quarter of them are on the move. The AARP estimates that more than 80 percent of people over 50 own their own homes, and from age 55 to 64, nearly 26.1 percent of people in this age group moved. Of those over age 65, nearly 22.8 percent moved.
That's a lot of homebuyers and sellers who can be clients for a long time to come.
Seniors are looking to hire real estate professionals who are knowledgeable about their needs. Unfortunately, most salespeople don't understand how to serve the senior market.
Approximately 41 percent of all home sellers are 55 percent or older. They have a lower median income than younger sellers, but when they sell, their homes net more cash—a median of $211,800—which can have significant tax and estate-planning consequences. When they repurchase, they tend to put down a lot more money, enabling them to either buy more expensive or second properties, which helps explain why nearly 68 percent of second-home buyers are over the age of 55.
Jennifer Dodge, vice president and managing director of the Senior Advantage Real Estate Council would like to see all salespeople appreciate this unique market segment.
The more you learn about them, she says, the more you can be surprised. "The biggest surprise is that they don't all relocate when they retire," says Dodge. "The assumption is they move to another state and that isn't the case. Only 23 percent relocate and many retire in their homes."
One of the biggest mistakes salespeople make with seniors is assuming that they are really working for seniors’ children. "Seniors can be offended when a salesperson assumes that the children are making the decisions," says Dodge. "We assume that they are moving to assisted living or retirement communities, but they don't move to cheaper, smaller places; they tend to live in single-family homes. The interesting thing is that some builders are building single-family homes in retirement communities now.”
The real lesson is that seniors can't be lumped into generalities, says Dodge. But it does help if salespeople know that there are some generational differences among seniors, which account for many attitudes and behaviors.
- The GI Generation—Born between 1901 and 1924, GI's were the first group to call themselves "senior citizens." They have lived in their homes more than 30 years, and they are vulnerable to con games, which makes them suspicious. They may want their kids involved in their housing decisions to make sure they aren't being "taken for a ride." Families are male-dominated, with long-term marriages. This is a hard-working group who came of age during the Great Depression, so they tend to be careful with their money. They want experts in any area where they need help, so relationship building is important to them.
- The Silent Generation—Born between 1925 and 1945, this is the only generation never to have been represented by someone their own age in the White House. As Depression babies, they were sandwiched in between the duty-bound GI generation and the "me" generation called the boomers, and shouldered the depression values of hard work and frugality. This generation is most interested in security and easy access to amenities and facilities such as medical centers and shopping. They are active, so they want to be near points of interest. If and when they downsize, they want access. They fear they may outlive their assets, and they don't want to be dependent on their children. This is the last generation to have strong social skills, where much of their social interaction is based away from television. This generation knows how to tell a great story or play a hand of bridge or a game of golf.
- The Baby Boomers—Born between 1946 and 1964, this generation dislikes being called seniors, despite the invitations to join the AARP that are arriving in the mail. Because of medical and general health advances in knowledge, boomers at age 50 may believe that they have another 50 years to live. This generation has been nicknamed the "sandwich" generation because they are still raising kids and taking care of GI parents, too. Because they may be housing three generations or have frequent visitors, they tend to buy the largest and most opulently outfitted homes, and also tend to buy second homes.
So why should salespeople care about seniors and their differences? "Niche marketing is becoming important," suggests Dodge. "It is one more market salespeople can look at, and it is a niche that is immune to the economy. When a senior is ready to move—they are ready to move. It is for a lifestyle change, medical reasons, the death of a spouse, and other reasons that don't happen because of the economy.
But the biggest reason salesperson should care is that seniors are the largest growing market in the nation. "Every seven-and-a-half seconds, someone turns 50," says Dodge.
(c) Copyright 2004 Realty Times. Reprinted with permission.
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Updated: August 16, 2018