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Business Observer Friday, Dec. 13, 2019 2 months ago

Builders race to capture a trendy crowd: 55-and-up buyers

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Some homebuilders have found an edge in the growing niche.
by: Brian Hartz Tampa Bay Editor

Baby boomers, retiring in large numbers, have created a vast market of empty nesters for homebuilders to target by offering active-adult communities that feature moderately priced, low-maintenance homes enriched by a plethora of high-end amenities and community activities.

'You’ve got to buy the land at the right price. The growth will come because it’s Florida.' Mike Bachman, Lennar

Mike Bachman, a local sales executive with Lennar, the nation’s largest homebuilder, says the key term is “aging in place.” That's driven the development of Medley, Lennar’s new brand of single-family and attached, villa-style homes being built at Southshore Bay in Wimauma, in east Hillsborough County and Mirada in San Antonio, north of Wesley Chapel in Pasco County. Both communities are selling homes quickly targeting the 55-and-up demographic. 

The high interest and sales in the 55-and-up category extends south, where Palm Beach County-based Kolter Homes recently introduced Cresswind Lakewood Ranch, the firm's latest branded active adult community. Cresswind Lakewood Ranch, in east Manatee County, joins eight other Kolter Cresswind projects, spread from Georgia and South Carolina to Port St. Lucie. It's in the northeast quadrant of Lakewood Ranch, one of the fastest-growing master-planned communities nationwide. 

Kolter Homes vice president of Southwest Florida David Langhout says the 650-home Cresswind Lakewood Ranch sold 20 homes from Oct. 18 through Nov. 18, its debut month — nearly double expectations. "We might have to build this project twice as fast as we initially planned," Langhout says, adding that the company projects it will surpass 100 home sales in 2020 in Cresswind Lakewood Ranch. 

Bachman and Langhout are part of an even larger trend in the active-adult housing sector. Some 32 million baby boomers planned to move in 2018, according to Metrostudy, and that cohort is expected to make up 30% of homebuyers, reports the National Association of Realtors. Competition for the active-adult buyer’s money is particularly intense along Florida's west coast, with several national builders in the mix. In addition to Lennar and Kolter, Del Webb Naples in Ave Maria remains popular more than a decade after it debuted, and Sun City Center in south Hillsborough offers an array of communities and neighborhoods. 

Mark Wemple. Mike Bachman, a local executive with Lennar, has been busy selling Medley, the homebuilder's new 55-plus offering, at two communities in the Tampa Bay area.

Well played 

Medley launched about a year and a half ago, and sales have been going strong, Bachman says. At Medley at Southshore Bay, where it has 855 home sites, the company has sold 84 residences so far, 64 of which have closed.

Active-adult buyers “need to feel emotionally attached,” says Bachman, 46, a 23-year-veteran of the homebuilding industry who came to Lennar from Taylor Morrison. 

That means a well-developed sense of community is key, which puts pressure on builders to spend big on in-demand features but also social programming designed to foster relationships between neighbors. Medley buyers, Bachman says, aren’t looking to downsize so much as they’re looking to become part of a new long-term peer group. And if that means leaving the familiar family home behind, so be it.

“All their friends in the neighborhood when their kids were little, those people may not be around anymore,” Bachman says. “People move away when they become empty nesters. People can make new friends here.”

Some 15% of Lennar's portfolio of homes in the region are 55-plus, and Bachman believes the company has an edge in this niche, starting with its quality social programming — an aspect of active-adult communities that can be easily overlooked in favor of fancy bells and whistles. And because the sales process can be long — Bachman describes it as a “courtship,” in which prospects will visit the community up to a half-dozen times before they make up their minds — potential buyers are also welcome to take part in the fun.

“The flexibility we have in our programming” is key, Bachman says, pointing to the Southshore Bay Medley community’s fall calendar, which offers cooking and painting classes, outdoor movies, wine tastings, golf cart parade, cookie exchange and tours of the 5.5-acre Metro Lagoon amenity, built by Crystal Lagoons, set to open in late 2020. “We offer the type of programming that we know works. But we’re also good listeners and evolve the programming to ensure that they come out for it.”

Lennar hired Icon Management Service Inc., a Bradenton-based firm that manages golf and tennis clubs and community associations, to oversee programming. Icon will staff the amenity center, operate the homeowners association and be responsible for all community maintenance, including lawn care, collecting a monthly fee. All homeowners will pay additional monthly fees for the community development district, the lagoon and amenity center.

Most of the homes are in the $261,000-$292,000 range, while a villa starts at $215,990, and one single-family home style is priced above $350,000. Bachman says Lennar doesn’t use gimmicky incentives to boost sales but will negotiate on closing costs.

Lennar was able to keep prices down because it saved money on land acquisition costs. Areas including Wimauma and San Antonio are far enough away from metro Tampa to still be affordable for developers who want to market to cost-conscious retirees, yet they’re located near Sun City Center and Wesley Chapel, respectively, which boast the community assets — medical facilities and shopping centers — those buyers crave.

“You’ve got to buy the land at the right price,” Bachman says. “The growth will come because it's Florida.”

Bachman points out that the Medley homes might seem far away from other urban development now, but it won’t feel that way two years from now, when most of the homes will be move-in ready. “Everything catches up,” he says.

'Space between' 

Langhout, with Kolter’s Cresswind Lakewood Ranch, says while being in the hot-selling master-planned community, developed by Schroeder-Manatee Ranch, comes at a premium for land purchases, the strategy is simple: Be early to market on the 55-and-above trend. "It is surprising there isn't more of this demographic, which this area always has attracted," Langhout told the East County Observer, sister paper of the Business Observer, when Cresswind Lakewood Ranch debuted in October at the 22nd annual Tour of Homes.

There is one other 55-plus community in Lakewood Ranch, from Del Webb. But Langhout says while both communities are amenity-rich, they are targeting different buyers of the same niche. “People like the idea of a more intimate community with more space between homes,” Langhout says, “rather than 1,200 homes in a community like Del Webb does.”

'We might have to build this project twice as fast as we initially planned.' David Langhout, Kolter Homes

Inside the homes, the approach is to add touches and features that cater to the aging-in-place concept. Each Cresswind Lakewood Ranch model, for example, has beach-entry showers that ramp downward into the shower along with very few steps to get into the home. Langhout says the 55-plus demographic appreciates seeing "sunlight and water," and the homes have been built with that in mind. Also, the streetscapes will be wider than normal, with 10-foot sidewalks on one side and 6-foot sidewalks on the other to encourage walking. 

Like Lennar and some others in the 55-and-above market, the clubhouse and amenities part of Cresswind is key to driving interest and maintaining sales momentum. Construction on a $7 million, 13,000-square-foot clubhouse inside Cresswind Lakewood Ranch began in October and should be ready next year. "First and foremost, this is about lifestyle," Langhout says.

Prices in Cresswind Lakewood Ranch, from $297,000 to $517,900, are higher than some other 55-and-above communities. (Home sizes range from 1,515 square feet to square 4,424 feet.) The higher price bracket reflects the higher quality in Kolter’s products and being in Lakewood Ranch, Langhout says.  

Courtesy. Cresswind at Lakewood Ranch, with several models, posted strong sales in its first month.

Interest in Cresswind Lakewood Ranch, beyond the 20 sales in the first month, is high. More than 300 people toured Cresswind's models the opening weekend, say company officials, despite a rainstorm. “We came out really strong,” Langhout says. “We are looking forward to a very active year.”

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