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Posted Nov 12th, 2014

New Home Sales to 55+ Buyers Leading Market Recovery

The 55-plus active adults (aka Baby Boomers) represent an unprecedented growth opportunity in the new home sales market

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It is projected that 52 percent of new-home buyers will be over 55 in the next five years (Source: Metrostudy).

One of the best ways to determine the potential for a franchise opportunity is to clearly understand the market demand for the product or service being offered. Homebuilding—hit extremely hard during the recent recession—is seeing a very positive shift in one particular market segment for new homes.

The 55-plus active adults (aka Baby Boomers) represent an unprecedented growth opportunity in the new home sales market. There are more people over the age of 55 in The United States today than ever in our history. (SOURCE: US Census Data) That number will continue to grow for the next 10 years primarily due to the 76 million strong Baby Boomer (b. 1943 to 1961) generation. As a result, active-adult consumers dominate future new-home demand.

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In a recently completed study for Epcon Franchising by Metrostudy, it was projected that 52 percent of new-home buyers will be over 55 in the next five years. In addition, builder confidence in the single-family 55+ housing market for Q3 2014 is up year over year, according to the National Association of Home Builders’ (NAHB) 55+ Housing Market Index (HMI). Compared to the third quarter of 2013, the single-family index jumped nine points to a level of 59, which is the highest third-quarter reading since the inception of the index in 2008 and the 12th consecutive quarter of year over year improvements.

As they are entering or nearing retirement, Baby Boomers are looking for a lifestyle change. With more financial security than younger generations, they also have the ability to purchase the home they want. With investment portfolios rebounding, a long-standing history of creditworthiness, and the appeal of low mortgage rates motivating them, 57 percent of boomers plan to move out of their current home and 70 percent believe the house they retire in will be the best home in which they have ever lived according to the Better Homes and Gardens Real Estate Baby Boomers Survey.

They just need to find them.

Active adults are seeking a home that better suits their empty nest and the desire for easier maintenance. While it seems logical that condominiums are the right fit, the primary reason for the popularity of their home choice is the lack of alternatives.

Epcon Communities realized the need for single-family homes that offer condominium style maintenance benefits. Single-story living (with the option for a second floor or basement) accommodates the older buyers’ needs without compromising style, quality, and the conveniences of living in a private residence. In addition, we factored in the importance of low-maintenance, so our communities’ HOA fees include such services as lawn care, exterior painting, driveway repair, and snow removal—the drudgery that homeowners prefer to avoid.

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Experiencing high demand for these homes, Epcon Communities created a homebuilding franchise business model. The comprehensive package provides a business owner with all the tools to enter this unique market of underserved homebuyers. At the end of 2013, the company has 72 franchise owners in 18 states, but those numbers continue to grow.

NAHB Director of Economic Services Stephen Melman said, “The stronger 55+ market could be put in context of the overall strength of the trade-up market/higher-income buyers, except this group is focused, not on larger homes, but new homes better designed for their needs.”

Whether you’re currently a homebuilder looking to expand your business, or an entrepreneur with no homebuilding experience, becoming an Epcon Communities franchise owner may be right for you. To learn more, download our free franchise report or give us a call at 1-800-783-3838.