DEARBORN, Mich.--(BUSINESS WIRE)--The baby boomer preference for everything bigger over the last 35 years is shrinking, but this generation’s desire for comfort and amenities is still very much at the forefront in the choices they make as consumers.
“Those baby boomers who worked hard for and embraced the affluent lifestyle of the 1970s through the middle of the last decade – owning large homes and spacious vehicles – have reached a turning point,” says Sheryl Connelly, global consumer trends and futurist for Ford. “This generation is now trending toward a simpler way of living, one that doesn’t eliminate the lavish comforts they’ve come to enjoy.
“The boomer population has always set the trends,” Connelly adds, “and now they’ve set a course for a more streamlined life that doesn’t sacrifice style and comfort.”
Industry data supplied by Ford Motor Company and Del Webb, part of the multi-brand homebuilder PulteGroup, show that boomers who comprised the growing market for large homes and made minivans and big SUVs vogue are now shifting to still lavish, but smaller homes and utility vehicles.
As the oldest of this generation – those born between 1946 and 1964 – marked their 60th birthdays in 2006, the population was estimated at about 78.2 million. Industry data suggest the baby boomer instinct for knowing what is chic continues to influence popular lifestyle choices.
The trend in homes increasing in size was a constant from the 1950s on, with average home sizes going from 860 square feet in 1960 to 2,505 square feet in 2012.
While baby boomers helped fuel that trend, evidence shows they are now breaking away, seeking cozier homes with top-of-the-line amenities and features, according to Del Webb, which found 28 percent of people between the ages of 55 and 59 prefer to downsize with their next home purchase.
Homes built by Del Webb, the pioneer and largest builder of 55-plus communities, average approximately 2,200 square feet with plenty of demand for additional living space, such as lofts and sunrooms. These premium-style homes typically include two bedrooms and two bathrooms, a den and a 2.5-car garage.
Data from Ford show boomers are making the same decision with regard to what they put in their garage, moving away from the SUV and minivan segments they dominated in the 1980s and 1990s to smaller, car-based utility vehicles that come with premium packages and styling.
The 2014 Ford Escape compact utility vehicle features 98.1 cubic feet of passenger volume – about a 21.4 percent difference from the 2014 Ford Explorer’s 151.7 cubic feet. Between Ford Escape and Ford Expedition, there is an estimated 31 percent difference in passenger volume.
Baby boomers and the housing trend
Baby boomers who purchase a Del Webb home are typically downsizing to a single-story, ranch-style house.
The average price of a Del Webb home in 2013 was $302,000, with buyer-selected options and upgrades representing approximately 20 percent of that price.
“Baby boomers are the housing market’s fastest-growing category,” says Steve Burch, vice president of strategic marketing for Del Webb. “After talking with Ford and digging into the data, we realize baby boomers are driving two of the largest, most important purchases an individual can make in a lifetime – a vehicle and a home.
“Boomers may be downsizing,” Burch adds, “but they have worked for a long time, and they don’t want to compromise on high-end features.”
Some baby boomers looking for premium home sites purchase lots with golf course or water views. For those wishing to add premium features inside the home, the top five options include granite countertops, hardwood floors, upgraded kitchen appliances, sunrooms and fireplaces.
Baby boomers and small utility vehicles
The kind of premium content baby boomers are specifying as they downsize can also be found in the type of vehicle they now want to drive – smaller utility vehicles loaded with amenities and features.
An uptick in small utility vehicle sales started in 2004 and has continued a steady climb, according to retail sales data from Polk, which was recently acquired by IHS. Correlating with the number of adults considered to be baby boomers is the number of smaller, car-based utility vehicles being sold to that demographic.
“Trendy baby boomers want to downsize their homes and their vehicles, but they’re not willing to give up premium content in either case,” says Amy Marentic, marketing manager for the global car and crossover group, Ford Motor Company. “Personally, I felt the need to downsize. My children are in college and I have no need for the larger utility any more, but I still want to feel like I’m driving something special.”
The largest demographic buying small utility vehicles such as the Ford Escape are people between the ages of 55 and 64, according to Polk. The second-largest demographic are those between 45 and 54. The number of 65- to 74-year-olds purchasing small utility vehicles has more than doubled since 2009 – growing at more than twice the rate of new retail vehicle sales overall in the demographic, according to the same data.
“While Escape is a compact utility built for everyone and we’re seeing strong sales across the board, sales are really being driven by these active adults in the 55- to 64-year-old range,” says Erich Merkle, U.S. sales analyst for Ford. “It’s no secret baby boomers are playing a large role in the compact utility vehicle segment, and will continue to do so well into the foreseeable future.”
Ford Escape is outpacing the industry in key population segments, including every age demographic above 55 years old.
In year-over-year retail sales, Escape is experiencing 24 percent growth – outpacing the national compact utility vehicle average increase of 18 percent. Escape is over-indexing in four cities particularly attractive to baby boomers – Miami, up 53 percent; Orlando, up 34 percent; Phoenix, up 27 percent; and Charlotte, N.C., up 26 percent.
“Some of the strongest growth we’re seeing for Ford Escape is in those places where boomers are buying homes – the Carolinas, Florida and the Southwest,” says Merkle.
About Ford Motor Company
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles across six continents. With about 181,000 employees and 65 plants worldwide, the company’s automotive brands include Ford and Lincoln. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford and its products worldwide, please visit corporate.ford.com.
About Del Webb
Del Webb is a national brand of PulteGroup, Inc. (NYSE: PHM). Del Webb is the pioneer in active adult communities and America’s leading builder of new homes targeted to pre-retirement and retiring boomers. Del Webb builds consumer inspired homes and communities for active adults ages 55+ who want to continue to explore, grow and learn, socially, physically and intellectually as they look forward to retirement. For more information on Del Webb, visit www.delwebb.com.
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