Serving seniors starts with understanding their needs, desires and wants in real estate, and in terms of their lifestyle and goals, Engel & Völkers Americas’ Stuart Siegel writes.
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The real estate market used to be driven by the three Ds: death, divorce and debt. No longer. The market is much more dynamic, and one of the most powerful forces impacting the residential real estate market today is the Silver Tsunami. The Silver Tsunami refers to a meteoric shift in demographics, whereby 25 percent of the global population will be over the age of 65 by 2100.
The impact
As this segment of the population will only continue to grow, real estate professionals must understand how this shift will impact the market today and in the years to come.
Not only will there be more people aged 65 and over, but this demographic will remain a more active part of the population than ever before, in terms of lifestyle, economics and real estate.
Furthermore, with the Silver Tsunami comes the largest transfer of wealth in memory. Eighty-four trillion dollars is projected to be passed down from baby boomers to Gen X and millennials by 2045, with $16 trillion changing hands in the next 10 years.
While aging baby boomers represent a very active potential market for real estate professionals, understanding and servicing not only their real estate needs but also their lifestyle and wealth management needs can lead to generational clients in the form of their children and heirs for years to come.
For these reasons, it behoves real estate professionals to figure out the best ways to create products, communities and lifestyles to meet the needs of the aging population.
Tailoring sales strategies to seize new opportunities
The first step is understanding the desired lifestyles, design and technology driving the real estate decisions of the 65+ demographic.
Developers and community planners building for this market are taking into account factors like walkability, health and wellness, in-home technology and the option for continuing care.
For example, some developments for 65+ residents are built with technology that alerts professional staff if a sink isn’t turned on or a toilet isn’t flushed within a 24 hour period, while the option for continuing care allows residents to age in place and receive care in residence.
Another trend of note we’re seeing at Engel & Völkers is a desire among baby boomers to purchase their next home within the vicinity of schools and universities, not for the purpose of continuing their own education, but to have the ability to contribute knowledge and time into these institutions. Remaining active socially and intellectually, while also planning for the future, is of the utmost importance to this demographic.
To provide an experience that addresses the many factors going into homebuying and selling decisions among this clientele, real estate professionals should also look to build a network of local experts who are also working with and advising the 65+ demographic in related areas like wealth management as well as community planning and development.
Despite a shifting market, real estate remains a very local business and cultivating community connections with related expertise is a guaranteed way to uplevel the service we provide as real estate experts.
Real estate professionals should position themselves as the point person connecting clients with various experts, be it builders or financial advisors. Your firm’s physical location can act as a hub to facilitate meetings, further cementing the value you bring to the deal.
There are also certain industry designations that can bolster agent credibility and expertise in working with senior buyers. NAR offers a Seniors Real Estate Specialist (SRES) designation, and the Well Building Institute offers criteria for residential developments that meet a Health and Wellness Building Standard.
Lastly, real estate professionals should educate themselves on the distinct ownership and/or rental structures offered by senior living environments.
For example, many continuing care communities start at one price point, but this can increase depending on the level of care required. Other senior living communities act as co-ops, where residents provide a down payment that gives them the right to rent in the community.
Still other communities are resident-owned, so buyers are posting a bond that gives them equity. Understanding and being able to advise clients on these different models is integral to working with this demographic.
How to get started
As with serving any specific client base, it starts with understanding their needs, desires, and wants in real estate, and also in terms of their lifestyle and goals. Real estate professionals should talk to people in their communities who are a part of this generation to learn how they’re thinking and what they’re looking for in their next real estate/lifestyle move.
Apply these findings to different submarkets to understand what is driving the real estate decisions of this population. Most importantly, begin by taking a step back from being a real estate professional.
Instead, lean into your role as someone who helps people in the community and leads with an authentic curiosity to understand and learn about this demographic, which will then help guide and inform a business strategy.
Stuart Siegel serves as Chief Strategy Officer for Engel & Völkers Americas. Connect with him on LinkedIn.
