Aging boomers will shift housing market.

This article is condensed from one that originally appeared in Lomas' U.S. Housing Markets.

That expanding bulge on housing's horizon is the babyboom generation gathering to enter a different phase of life.

The phase is called old age.

Builders prospered in the '80s by selling baby boomers their three- and four-bedroom homes on quarter-acre lots. But what options will appeal to this market segment 10 years from now?

Is the heyday of the high-maintenance, large-lot residence now over? Will attached housing be the next major current in this great tide of homebuyers? Will the boomers be buying any housing at all? Will their patterns of mobility change? The bulge on the horizon is nearer than we think.

Those in the business of planning and selling housing must think about defining and serving the needs of older Americans. In a relatively few years, they will be the fastest-growing segment of the housing market.

One characteristic of our elderly population's living arrangements stands out prominently: Households headed by persons 65 and up have a median size of just 1.6 persons, compared to a median of 2.3 for the United States as a whole, according to Census Bureau data.

View that statistic from the perspective of housing demand and it becomes clear that growth of the elderly population will have a disproportionately heavy influence. If our social patterns continue to place the elderly in such small households - essentially empty-nest married couples, widows, and widowers these age cohorts will continue to occupy far more than their share of the nation's dwellings.

Age Group to Grow

In 1993, people 20 to 54 years old - including all of the babyboom generation - constituted more than 70% of the adult population (everyone 20 and older). By 2010, that share will have fallen to about 60%. The 55-to-64 cohort will swell to 17.7% because of the arrival of the first boomers in that age bracket.

Now, consider the Census Bureau's forecast that the population of the age groups we call elderly will double by the year 2030, to nearly 70 million.

Instead of 12.6% of the population, the elderly will constitute 20.2%. Instead of maintaining about 22% of our households, as they do today, could they be responsible for 30% of U.S. homes in the year 2030? Even 35%?

The Influence of Style

Housing professionals will, no doubt, generate imaginative new configurations of communities and dwellings that will influence -- and be influenced by - the living styles of our older citizens.

Between now and the year 2000, a shift in the living arrangements of just 1% of our elderly populace would affect more than 200,000 dwellings.

Most of the boomers will be beyond age 60 by the year 2020. In that year, the Census Bureau projects, 41 states will count more than 15% of their population in the 65-plus group.

Where will we find the biggest housing markets for older Americans?

In our most populous state, California, residents age 55 and older constitute about onefourth of the adult market. There were more than 5.5 million of them in 1993. By the year 2010, however, the 55-plus crowd in California will number a projected 8.8 million and will comprise 31% of adults.

Expanding market clout for older Americans will also be dramatic in other Sunbelt states.

Florida: A Retirement Haven

The No. 1 venue for our well-seasoned population will continue to be Florida. Market-share numbers reveal just how much clout the older age groups carry in the Sunshine State.

In 1993, the 55-and-up cohorts constituted 38% of the adult market, easily the largest proportion in any state. There were more than 3.8 million in Florida last year.

Sixteen years from now, in 2010, continued in-migration of retirees and the maturing of the baby-boom generation will have swollen the ranks of this group in Florida to more than 6 million. In that year, the 55-plus group will own a 45% share of Florida's adult market.

Nationally, 55-and-up Americans will account for 34% of the adult market by the year 2010.

The Census Bureau's projections depend partly on expected migration. But no stretch of imagination is necessary to conclude that the Sunbelt states will continue to draw Americans from northern states, and that the West will continue to add population at the expense of the Northeast and Midwest.

By COLIN KIRKHAM

Senior vice president,

Lomas Mortgage USA

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