Housing Trends - Brooklyn Park, Minnesota · 2020. 2. 25. · Price Points More expensive, larger...
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Housing Trends Presented by: Matt Mullins February 20, 2020
Transcript of Housing Trends - Brooklyn Park, Minnesota · 2020. 2. 25. · Price Points More expensive, larger...
Housing Trends
Presented by: Matt Mullins
February 20, 2020
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Maxfield Research & Consulting
Demographic Update
Baby Boomers & For Sale Market
Aging In Place
Twin Cities Outlook
Big Picture: MN is Aging; Especially Rural MN
2019▪ 5.7 million▪ Millennials overtaking
Boomers▪ 16% pop. 65+▪ Metro: 48% of MN 65+
2040▪ 6.1 million▪ 21% pop. 65+▪ Metro: 75% of MN 65+
7.1% 9.8%
23.0%25.7%
22.4%20.6%
25.0% 21.8%
22.4% 22.1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Metro Area Non-Metro MN
Gen Z
Gen Y
Gen X
Boomers
Silent Gen.
Metro vs. Non-Metro Population Distribution: 2019
7 - 22
23 - 38
39 - 54
55 - 73
73+
2019 Age
Outstate MN Aging Faster than Metro Area…For Now
Millennials Have Recently Overtaken Boomers
0
50,000
100,000
150,000
200,000
250,000
0-4
5-9
10-14
15-19
20-24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 - 69
70 - 74
75 - 79
80 - 84
85+
Age Distribution 2019: Twin Cities vs. Remainder of MN
Non-Metro MN
Twin Cities Metro
Source: ESRI, Inc.
!
492,000+ New Seniors (2020 to 2040)
Twin Cities 65+ Population +98% by 2040!
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1980 1990 2000 2010 2015 2020 2025 2030 2040
Pct
d. 6
5+
65
+ P
op
Year
Metro Area 65+ Population
Metro Area Seniors Pass Non-Metro in 2020
0
100,000
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400,000
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1980 1990 2000 2010 2015 2020 2025 2030 2040
65
+ P
op
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tio
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Year
65+ Population: Metro vs. Non-Metro
Non-Metro Twin Cities
18% Growth Rate Projected Through 2040
0
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40,000
60,000
80,000
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120,000
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Historic & Projected Population: Brooklyn Park
Strong growth in 65+ population in Brooklyn Park
3.1%
-0.5%
1.7%
12.9%
-0.4%
-5.6%
15.1%
28.9%
-10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0%
Under 20
20 to 24
25 to 34
35 to 44
45 to 54
55 to 64
65 to 74
75+
Age
Gro
up
Projected Population Growth by Age Group: Brooklyn Park 2019 - 2024
Incomes Peak for Millennials/Gen X
$36,210
$66,867
$90,916 $90,037
$80,923
$58,915
$41,109
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
Under 25 25-34 35-44 45-54 55-64 65 -74 75+
20
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Me
d.
Inco
me
No
. o
f H
ou
seh
old
s
Age of Householder
Growth & Income Trends by Age of Householder: Brooklyn Park
2019 2024 2019 Median Income
Homeownership Rates Peak for Boomers
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
15 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 75 - 84 85 +
Age Group
H/O Rate by Age: Brooklyn Park, 2010 & 2017
2010 2017
Baby Boomers & For Sale Market
Aging In Place
Twin Cities Outlook
Demographic Update
Older Adult Housing Continuum
Age Targeted vs. Age-Restricted
Age-Targeted Age-Restricted
Age Restriction None - but caters to older adults Typically 55+
Price Points More expensive, larger homes More price sensitive
Age of Buyers Early empty nesters Propensity increases with age
Lifestyle More independence More Social interaction
Visitor Policy More flexibility for all ages More restrictive visitor policies
➢ 10,000 baby boomers turn 65 every day in the US until 2030
➢ Healthier, savvier than previous generations
➢ Highest spending power (70% of disposable income in US) | 71% of all net worth in the U.S.
➢ 50%+ of baby boomers support their adult children
➢ 65% of boomers plan to work past age 65
➢ 45% of boomers have no retirement savings
➢ Boomers and seniors carrying more debt: 40% of 65+ population carry a mortgage
➢ 45% of boomers purchased their 1st home between 25-34 (37% Millennials today)
➢ Boomers 80% Home ownership rate | 20% of the new construction market
➢ Accumulated substantial home equity | $6.3 Trillion!
Baby Boomers (56-74) - 75 Million Strong!
Boomers 21% of Population | 32% of Sales
Boomers & Seniors: 39% of All Home Purchases
37%
24%
32%
7%
0%
5%
10%
15%
20%
25%
30%
35%
40%
Millennials Gen X Boomers Silent Generation
Percent of Home Sales: 2019
Source: NAR Home Buyer & Seller
3/4’s of Older Adults Still Buying SF Home
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
54 to 63 64 to 72 73 to 93
Type of Home Purchased by Age: 2019
Detached SF Home TH/Rowhouse Apt./Condo 5+ units Duplex/Apt./Condo 2-4 units Other
Source: NAR Home Buyer & Seller
Older Adults/Seniors Still Desire Square Footage
0%
5%
10%
15%
20%
25%
30%
35%
<1,000 sq. ft. 1,001 to 1,500sq. ft.
1,501 to 2,000sq. ft.
2,001 to 2,500sq. ft.
2,501 to 3,000sq. ft.
3,001 to 3,500sq. ft.
Older Adult Buyers Home Size Preference
54 to 63 64 to 72 73 to 93
Source: NAR Home Buyer & Seller
Older Adults Moving Further Away
Source: NAR Home Buyer & Seller
15
10 1011
20
30 30
0
5
10
15
20
25
30
35
All Buyers 28 & younger 29 to 38 39 to 53 54 to 63 64 to 72 73 to 93
Med
ian
Mil
es
Age
Distance between Home Purchased & Previous Residence
Market for One-Level Living Product
Single-level Living Products in Demand from Boomers:
✓ Rambler single-family homes✓ Detached Townhomes &
Twinhomes, villas, etc.✓ Condominiums✓ Single-level and walk-out lower
level townhomes✓ Cooperatives✓ Active Adult Rentals✓ General-Occupancy Rentals✓ Retirement Communities
What about Condos?
✓ Condo market soft since recession
✓ MN State Statute 515 (“MCIOA”) modified in 2017 to ease construction defects language…but still difficult
✓ Most development in DT Mpls. or wealthier suburbs (Wayzata, Edina, Minnetonka, etc.)
✓ Strong demand; but developers focusing on apartment sector due to risk
✓ Most new product $500k+ | $400+ PSF
Age Restricted For-Sale CommunitiesBellwether Del Webb (Pulte Homes)▪ Age-restricted Villa Development▪ Build-out 400 Homes…potential for
future phases▪ Base Pricing: $320k to $450k;
w/upgrades up to $600k▪ Avg. $227/PSF▪ Floor Plans from 1,222-1,953 sq. ft.▪ Strong Absorption
▪ Amenities: clubhouse, indoor and outdoor pool, fitness center, bocce ball, pickle ball, multi-purpose rooms, community room, commercial kitchen, walking paths, social clubs, lifestyle director
Margaritaville
Desired Home Features for Older Adult Home Buyers
✓ Proximity to family and grandkids
✓ Desire smaller, lower-maintenance....yet higher-quality than their current home
✓ Prefer single-family detached product; but many will consider attached products
✓ 90% consider a 1-story; but 1/3rd would still consider a two-story
✓ Prefer master bedroom and laundry room on main floor
✓ No-Step entry preferred, wider doorways & hallways, lever-style handles
✓ Abundant storage | Guest bedroom/hobby space
✓ Adequate lighting with sensors or timers, home automation, security, smart technology
Aging In Place
Twin Cities Outlook
Demographic Update
Baby Boomers & For Sale Market
Aging in Place
➢ Only 3.5% of all U.S. homes are Considered Accessible
➢ AARP Home Preference Study (2018): • 76% of 50+ would prefer to remain in their current residence
• 77% would like to stay in their community as long as possible
• Proximity to health care, grocery stores, and transportation very important
• 31% would consider building an ADU (i.e. granny flat)
• About one-third of older adult homeowners anticipate home improvement modifications needed to stay in their home
Requested Modifications
o Installing grab bars
o Walk-in-showers/curb less shower
o Slip-free flooring
o Widened doorways/pocket doors
o Eliminating steps/ramp construction
o Raised toilets
o Adjustable shower heads
o Lever door handles, rocker light switches
o Varied height cabinets and countertops
o Smart home technologyo Touchless faucetso Chair lifto Motion activated lightingo Lower wall switches and raised
electrical outlets
Boomers Creating Housing Gridlock?
➢ 55+ owns 53% of all homes in the U.S.
➢ Longer tenure in home:▪ 70% 10+ years▪ 47% 20+ years
➢ Senior Turn Over Rate is Slower than Previous Generations
➢ Lack of Inventory for Downsizing
➢ Affordability Concerns
➢ “Wait and See” if Housing Prices Continue to Rise
Lack of For-Sale Product Driving Apartment Sector
1,8
18
1,3
11
738
516
568
393
380
262
102 1,7
27
1,6
91
1,4
85
1,6
96
2,0
42
591
1,8
23
1,0
21
1,0
61
1,3
57
304
478
694
1,1
33
3,8
03
3,8
18
3,7
82
2,4
45
4,8
20 5,5
21
5,6
74
9,1
32
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1990 91 92 93 94 1995 96 97 98 99 00 01 02 03 04 05 06 07 08 09 2010 11 12 13 14 15 16 17 18 19 20
Num
ber
of U
nits
General Occupancy Market Rate Apartment Units OnlineTwin Cities Metro Area: 1990 to 2020
1990s - 7,815 units2000s - 13,071 units2010s - 32,168 units
9-Year Run of Vacancies Under 3%!
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
1990 91 92 93 94 1995 96 97 98 99 2000 01 02 03 04 2005 06 07 08 09 2010 11 12 13 14 2015 16 17 182019 (3Q)
Vac
ancy
Rat
e
Avg
Re
nt
Year
Metro Area Apartment Vacancy & Rent Summary
1990 through 3Q2019
Avg. Rent
Vacancy
Rate
Equilibrium
Senior Housing Deliveries @ Record Peak
0
500
1,000
1,500
2,000
2,500
91
92
93
94
19
95 96
97
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99
20
00 01
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03
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20
05 06
07
08
09
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10 11
12
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17
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20
Un
its
Year
Senior Housing Deliveries by Year
Units Built
…More in the Pipeline
0
100
200
300
400
500
600
700
800
900
AA Aff AA MR Rent AA Own IL AL MC
Twin Cities 2019 Deliveries & 2020 Pipeline
2019 Total 2020 UC
Twin Cities Outlook
Demographic Update
Baby Boomers & For Sale Market
Aging In Place
Median Home Sales Price @ Peak
$127,000
$265,000$227,900
$150,000
$282,000
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
2005 06 07 08 09 2010 11 12 13 14 2015 16 17 18 19
Median Sales Price: Brooklyn Park vs. Metro Area
BP Twin Cities
2020 For-Sale Market Metrics Positive
Median Sales Price
Housing Starts
Home Sales
Interest Rates
Inventory
Distressed Sales
Housing Affordability
55+ Outlook
➢ +17% senior household growth rate in Brooklyn Park in next five years
➢ 80% of Brooklyn Park 55+ households are homeowners
➢ ¾’s of households desire to stay in their current home or community
➢ Proximity to amenities important: walkability, restaurants, fitness, shopping, worship, etc.
➢ Strong demand for new construction maintenance-free housing or remodeling current residence
➢ 55+ households accounted for more than 50% of home improvement spending (2019)…projected to rise to 56%
➢ “Aging in Place” perception changes to “Living in Place”
Matt Mullins Maxfield Research & Consulting [email protected]
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