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Tuesday, April 22, 2014

Rocking the Ages Part 4 - Marketing your home to the Baby Boomers

"Born between 1946 and 1964, Baby Boomers are the most ... influential generation in America.  Born to prosperity in a time of booming postwar economic expansion, Boomers enjoyed unprecedented employment and educational opportunities.  They took this for granted, and the shared assumption of affluence shaped their values and embroiled in the tumult of events that filled the sixties and seventies... With little else to worry about, Boomers were able to be more self-aborbed, pursing personal goals and instant gratification…

… Above all, Boomers didn't want to be hemmed in by the conformity the rules demanded.  Boomers were "individuals," so individuality was lionized while conformity was eschewed…. They have always done it differently than the way it was done before, and as they get older, they will continue to demand products that fit their individuality…. Boomers are much less likely than their parents to retire to these cookie-cutter communities...  At heart, Boomers remain nonconformists."

Rocking the Ages: The Yankelovich Report of Generational Marketing.

Because this is my peer group, I can really relate to the wants and needs of this generational cohort.  The age span of The Boomers range from ages 49 - 67.   As such the National Association of Realtors Home Buyer and Seller Generational Trends survey is broken down into older and younger boomers.  These are transitional years for most people, so the housing requirements vary between Early Boomer and Trailing Boomers.   According to the Generational Survey

Trailing Boomers
Born 1955-1964
Ages 49 to 58
  • 16% of recent home buyers
  • 33% of younger boomers are single females or males
  • 22% purchased a multi-generational home. Most common reasons: children over 18 moving back into home (38%), cost savings (18%), and health/caretaking of aging parents (15%)
  • 26% own more than one home—including investment properties and vacation homes
  • Plan to live in home 20 years
  • 21% of recent home sellers
  • Most common reason to sell home: job relocation, home is too large, and neighborhood less desirable
  • 10% had to stall home sale because their home was worth less than their mortgage
Early Boomers
Born 1946-1954
Ages 59 to 67 
  • 14% of recent home buyers
  • 21% purchase a new home to avoid renovations or problems with plumbing and electricity and for amenities of new construction
  • Biggest neighborhood influencers: convenient to friends and family, affordability, convenient to shopping
  • 27% own more than one home—including investment properties and vacation homes
  • Plan to live in home 20 years
  • 22% of recent home sellers
  • Most common reason to sell home: want to move closer to friends and family, home is too large, and retirement
  • Moving 36 miles from previous home
  • Most likely to move to another region—at 22%
  • Typically downsizing square footage and price of home
I've worked with both age groups of Boomers and the differences are pretty subtle.  In general, the Early Boomers seem to be thinking about retiring and playing with grandchildren, while the Trailing Boomers are still dealing with teen-agers and college-aged students.  As such, their housing needs are slightly different.   

At this stage of our lives, we're called the "sandwich generation." More and more of my friends are dealing with aging parents and in some cases "un-launched" children. Many of them need a first floor bedroom or a separate suite for a parent or child.  If your house is ill suited for for multiple generational living, it may not appeal to some Boomers.

Because we're also at the age where orthopedic problems are getting to be an issue, I find that a lot of Early Boomers are looking for single floor living. If your home has multiple levels with the laundry in the basement and the master on the second floor, it's highly unlikely that a Boomer is going to be very interested in your house.  Even Trailing Boomers are looking for homes with first floor masters that allow them separated living areas from their older children.  

When I talk to my friends, they are thinking that this house is going to be their home for 10-20 years, so they want to age gracefully where they are.  Surprisingly, some of my Boomer clients are not necessarily interested in downsizing as much as changing their square footage configuration.  That said, maintenance free living is getting to look pretty good to a lot of folks in this generation.

The main thing I can say about a Baby Boomer home is that each one has their own style. These are my contemporaries, so I know how they perceive things. As it has always been since we came of age, it's about personal expression and taste. We really don't care what our friends do their homes -- it's their home. For example, one of my friends has painted each room in her house a different vibrant color: red, yellow, green, orange, etc. Another friend has flowered chinz covered furniture with bright pink wallpaper. Another friend has a traditional Williamsburg house: color, furniture, object d'art, wallpaper, etc. And my house is decked out in monochromatic (and, in some cases, very bold) wallpaper with Oriental rugs and an eclectic collection of furniture and decorative pieces.

I find that Baby Boomer sellers often have a hard time grasping the concept of home staging. They figure that the buyer of their home will do what they want, so why bother making any changes?  The problem is that the buyers for their homes are frequently the next generation and they think the house should look like something straight out of Architectural Digest. There can be a real disconnect. (Enjoy this clip from Parenthood. Recent sellers of family homes can probably appreciate this.)

Because it's about personal expression, cosmetic issues rarely faze the Boomers the way they do GenXers and Millennials. It's all about making a home to suit themselves and their individual style. 

So how do you market your home to a Baby Boomer?

This generational cohort - by and large - use both print and Internet for their search.  This has been the only age group that will call me after they have seen some print ad in the Pioneer Press.  If you are selling a "Baby Boomer type of home," an occasional ad in a print publication might make some sense.    Although, these buyers are becoming increasingly proficient at using computers, so they also scan the Internet for property information. Therefore, as with the Millennials and GenXers, a great Internet presence is also important.   

Merchandising to a Boomer can actually be a little easier. They primarily are looking at the bones of the house -- not the interiors. They are mainly thinking about maintenance issues and room configurations -- not about d├ęcor.  

I think it's really important when marketing to Boomers, that the sellers' agents provide floor plans of the house and a list with the age of the mechanicals, appliances and roof, etc. As a seller of a Boomer sort of home, make sure your agent is asking for this information and is planning on hiring someone to do floor plans for their marketing materials. 

Boomers want major components in good condition, clean and well-maintained.  I continue to recommend a pre-listing inspection by a licensed home inspector. Make sure that items are repaired and in good condition. Boomers will be more facetious about construction quality and craftsmanship. They will tend to inspect the soundness of the roofing, HVAC, siding, etc.  They want to make sure the basement is dry and has had no water issues.  

In general, Boomers know what it costs to replace windows and roofs, and what it takes to dry out a basement.   They have little interest in dealing with these issues again with their next property. 

Since Boomers are more willing to put in the work needed to decorate the home to their own taste, they more than likely will already be imagining how they want to remodel, repaint, or redecorate.  As such, keep areas uncluttered as much as possible and allow buyers to see themselves easily in your property.   

But if you are going to stage to appeal to Baby Boomers, think about ways to incorporate items of nostalgia that might appeal to them: like art, music, books displayed, etc. It might trigger a positive emotional response and memory.

Baby Boomers like beautiful kitchens and bathrooms.  They'll appreciate and gravitate to homes where these features have been beautifully updated.  However, if not updated, a Boomer will want to make sure that, if they are going to be remodeling a home, the space is there to accommodate these features.  Sufficient closet and storage space are also must haves.  

As they're becoming "empty nesters," Boomers think about having a private retreat where they can age (extremely) gracefully.   Many are forgoing the traditional route of downsizing to an apartment or townhouse on the North Shore.   Quite a few of my clients have moved out of area to build their "dream house" in California, Michigan, Colorado, Florida, etc.  or have moved to a luxury apartment in the city.   Again, it's all about "pursuing personal goals."  

There have been several articles in the New York Times that discuss the Boomer trends in housing you might enjoy reading.

Baby Boomers’ Second Act
Aging Baby Boomers, and the Question of Where to Live
Boomers Reshaping The Housing Market

Rethinking the Traditional Retirement Community

Just by the sheer numbers we have, Boomers will be a force to be reckoned with in the years ahead -- it will be interesting to see what the future holds for retirement housing and nursing homes with all these Boomers aging!

Monday, April 14, 2014

Rocking the Ages Part 3 - Marketing your home to the Gen Xers

"Born between 1965 and 1980, Gen Xers grew up in an era of emerging technology and political and institutional incompetence. Watergate, Three Mile Island, Bhopal, the Iranian hostage crisis, Iran-Contra and the Clinton-Lewinsky debacles mark the emergence of this generation. Mimeograph machines turned into high-speed copiers, faxes plodded from 30 minutes a page to seconds, and heavy adding machines were replaced with handheld calculators. ... the computer now became a desktop appliance.

Gen Xers spent less time with their parents than previous generations of children had. First recognized as latchkey kids, this generation found themselves home alone and taking care of themselves and their siblings, while their parents worked...They were not coddled for every emotional need and want. Gen Xers learned that their parents were human and fallible ... Autonomy and self-reliance, rather than respect for authority, was a natural byproduct of the Generation X childhood."

Source: Value Options

At 60 million strong, the Gen Xers have often been called the MTV Generation.  Compared with previous generations, Generation X represents a more apparently heterogeneous generation, openly acknowledging and embracing social diversity.  

According to Rocking the Ages: The Yankelovich Report of Generational Marketing, GenXers are connected to their peers for decision making: it's their opinion that matters;
others tend to be secondary.  (As the report indicates, 
"… our data shows their overwhelming reliance upon friends for advice about what to buy and what to believe.") It's funny, I can see it in their homes.   While touring properties, if a Gen Xer owns the house -- the colors, decorating and even furniture seem to all look very similar to me.  The old TV show, Friends, comes to mind, when thinking about Gen X.   Remember the segment about Pottery Barn?

Statistically, Gen Xers are more likely to be the children of divorced parents than previous generations and as such they tend to be risk adverse: they have lived through their parents’ recessions and have seen first hand the ups and downs of the job market.  Also statistically, they have the highest education levels. Gen Xers make less money individually in real dollars than their parents did, but have a higher household income because of more women in the workforce.

Unfortunately, Gen Xers were at a particularly vulnerable financial stage of life when the financial crisis happened in 2008. While most Millennials were too young to own stocks or real estate during those market crashes and Baby Boomers enjoyed decades of growth in both assets throughout the 80s and 90s, many Gen Xers had the misfortune of starting their investing just as both markets were peaking. As a result, a recent census report found that people in this age group saw a 59% decline in median household net worth between 2005 and 2010, the largest drop of all age groups.  Xers is the one generational cohort that's never been able to presume success. 

According to the National Association of Realtor’s Home Buyer and Seller Generational Trends, the Gen Xers are

  • Second largest share of home buyers at 30% and largest share of home sellers at 29% 
  • Highest income earners at $98,200 and largest share of married couples at 72%; most have children under 18 in the home at 67% 
  • Buying for desire to own a home, larger home, and job-related relocation 
  • Biggest neighborhood influencers: quality of neighborhood, convenience to job and quality and convenience of school 
  • Plan to live in home 15 years 
  • 15% had a difficult time saving for a down payment among them 46% said credit card debt and 35% said student loan debt delayed saving 
  • 19% had to stall home sale because their home was worth less than their mortgage 

So how do you market your home to a Gen Xer?  

Although mobile technology came later to them in young adulthood, they have embraced smart phones, e-mail and text messaging.   They rely on the Internet for most of their information about a property.  So like with the Millennials,  the listing of your home needs to have an exceptional Internet presence.   As a seller you should understand and make sure your Realtor has a robust Internet strategy and is aware of all the latest apps and tools.  

Though price is always important, when marketing to Gen Xers setting the list price correctly is critical and essential.   Keep in mind, this is the generation that bought their first homes at the peak of the housing market only to find themselves in the midst of the financial crisis owing more on their home than the property was worth.  They get it. They saw first hand that property values can go down. 

They have thoroughly studied the market using various tools that exist on the Internet.  They study the comps and figure out the market value of a property.  They rarely care to hear what the agents think about the price.  They really don't care what the asking price is or what the seller wants from the house.  They'll pay the price that they think is fair -- and no more.  Generally, they will walk away rather than overpay.   They have been burned once and are cautious this go around. 

I find with Gen Xers the bottom line is this:  They are practical, independent and self-reliant. They want lots of accurate information and they want value. 

Gen Xers are extremely important to the health and well being the North Shore real estate market.  They are the buyers for many of the family houses that are going to be turning over in the next few years.   In general, the Millennials are still in the city and not ready to move to the suburbs, while the Gen Xers have finally been able to sell their condos with the price recovery of the condo market, and are ready to get their kids settled into the suburban schools.  

While Millennials seem to lean toward high tech and edginess, Gen Xers seem to like warm and relaxing.  Gen Xers are in tune to a certain style and design, and know exactly what they want in a home.  They are less inclined to settle for less.  They place a high priority on gorgeous high-end kitchens with top of the line appliances, as well as amenities like large walk-in closets and mudrooms. Their keyword is family.

Gen Xers like to keep their children close.  They are uncomfortable if the master bedroom is too far away from the the children's room.  (I've had Gen X clients turn a first floor master into the guest room and then use a regular 2nd floor bedroom for themselves.)   They tend to like 9-10 foot ceilings, open floor plans with the kitchen and family room combined into a great room. Finished basements, 2nd floor laundry rooms,  and great storage are important features to them. Since there is less formality to the their homes, they seem less concerned with beautiful gardens - they would rather the yard had space for a trampoline or jungle gym.

When marketing to a Gen Xer - think casual.    They're looking for that wall where they can put their wide screen TV.   They're looking for a finished basement for their children and entertainment spaces for their friends.  While you may love your formal dining room or living room,  I've seen Gen Xers turn that space into a billiard room or home office.  (Check out this article in the Wall Street Journal). With the virtual connections that we have today, many of this generation like to work from home, so a home office or room in which to work is also important.  

Like the Millennials, they are also shying away from fixer-uppers.  They want things done to perfection.  With some families, both spouses are working and they don't have the time or inclination to manage a renovation or remodeling project.    As a seller it's critical to have your house in top notch condition and looking in move-in ready condition.   If you've got a formal house, you might also want to tone it down a bit and give it a more casual feel. (See my Millennial post for more details and tips for staging and merchandising your home.)

As a seller of a bigger home on the North Shore, this is the primary generational cohort to consider.  By and large, these are your buyers.   Understanding their motivations and desires, can be the difference between your house selling for top dollar or  your house lingering on the market indefinitely.

Saturday, April 5, 2014

How well do you know the North Shore?

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