Older homebuyers pickier, experts say

10/5/2013
MARKETWATCH
Data show that buyers 58 years of age and older know what their needs and wants are and might just abandon the hunt for an existing house and build one to suit them.
Data show that buyers 58 years of age and older know what their needs and wants are and might just abandon the hunt for an existing house and build one to suit them.

When you’ve already bought one or two homes in the past, you might know exactly what you want in your next one. On top of that, you’ll probably want a home that’s move-in ready. The location might also be nonnegotiable.

In short, the older you get, the pickier of a home shopper you are. And there’s research to back this up.

In a survey of recent home buyers and sellers, about half of people 58 and older made no compromises during their recent home purchase, according to the National Association of Realtors. Only 28 percent of the youngest home buyers didn’t compromise, with most making all sorts of trade-offs on price, lot size, distance from job, and home style. In between, the older you were, the less likely you were to compromise.

“The first-time buyer is starry-eyed and has no idea what they really need,” said Stephen Melman, director of economic services for the National Association of Home Builders. Those in their 50s “are better than most housing consumers at knowing what they want — and won’t be shy.”

Young buyers tend to focus on needs. They need three or four bedrooms to have enough room for their children, said real estate agent Leslie Piper, who is also a consumer housing specialist for Realtor.com. They need to be in a good school district.

When you reach a certain age, you’re going after what your desires are, she added. You’ve likely raised your family, now you’re interested in focusing on what you want, not the children.

And you’re less willing to compromise.

But being selective likely will make your home search tougher.

Ms. Piper has crossed paths with boomer buyers who were specific in their requirements. Like the couple who have been trying to downsize into a newer home, yet have their hearts set on living in a San Francisco-area neighborhood filled with bungalows from the 1940s and 1950s. They’re still looking. Or the couple who paid at least $100,000 over the other bids in order to buy an updated home located where they could walk to town and be close to an aging mother.

The older you are, the newer you want your home to be, too, according to the NAR survey. Millennials, those born between 1980 and 2000 and who are old enough to buy homes typically went for places built around 1986, a decade older than the typical home bought by someone from the so-called Silent Generation, those born between 1925 and 1945.

In fact, older buyers may give up and go the route of building instead. They are more likely to have the financial wherewithal to do it too, especially now, as housing markets have improved and fewer owners owe more on their mortgage than the home is worth.

Home builders who cater to buyers ages 55 and older have grown more optimistic. The most recent reading of the National Association of Home Builders’ 55-Plus Housing Market Index was 53 in the second quarter, up 24 points from the same time last year.

A reading above 50 means that more builders view conditions as good.

In new homes, empty nesters typically value entertaining spaces — their kitchens, eating spaces, and gathering spaces — both inside and out, said Scott Thomas, director of architecture for PulteGroup. Many work from home, so they value designated office space that doesn’t make them give up a bedroom. Ample storage is another popular desire.

Location also is important, and many empty nesters prefer to be within walking distance of amenities such as coffee shops and theaters, Ms. Piper said.

“A lot of times, when you have raised your family not close to commerce and the amenities of what a town or city might offer, you realize how nice it is to be able to ride your bike or walk and meet friends,” she said.

Consider these tips:

‚óŹ Identify must-haves: Is low maintenance important? Decide what’s on your wish list and nonnegotiable items. That will help you from seeing homes that don’t fit what you want.

Do your homework: Think about what neighborhood you want to live in and learn about developments that might suit your needs. Envision how you want to spend your future. Then do a reality check: Talk with a trusted real estate agent about market conditions and let them help you pinpoint houses, Ms. Piper said. Check in with a good financial adviser if you’re considering financing part of the purchase.

Embrace technology: Mobile real estate applications can help home buyers stay aware of new listings.

“You don’t want to miss out on something, as particular as you are,” Ms. Piper said.