By David M. Kinchen
Editor, Huntington News Network
Hinton, WV – I don’t know about you, but I’m sick and tired of reading about the “Baby Boomer” generation – those born between 1946 and 1964 – and their whining about how tough things will be for them. But the generation was the biggest in the U.S. – 78 million – far more than the one immediately preceding them to which I belong, so I’d better get used to the Time magazine covers, etc., etc.
I may be tired of reading – and writing – about Boomers, but my attitudes on many things mirror the generation. Many of my “Sandwich Generation” – those born from about 1935 to 1945 – are more into jazz and early rock music. We often emulated the Beatniks rather than the Hippies, but we created the zeitgeist for the Boomer Generation.
The latest on Baby Boomers comes from the National Association of Realtors, a trade group that’s vitally interested in the housing wants and needs of all generations. I’m guessing that most of the recent presidents of NAR are Boomers and certainly most of the staffers in Chicago and Washington, DC are Boomers or the post-Boomer generation.
Here’s what the NAR says about Boomers:
“Baby boomers have a wide variety of housing needs in the future, depending on their retirement plans – or lack thereof – according to a study by the National Association of Realtors®.
“Most of the 78 million baby boomers are far from retirement, with diverse plans and timelines, resulting in different housing requirements and significant shifts from patterns established by earlier generations. The comprehensive study is based on a survey of nearly 2,000 American baby boomers born between 1946 and 1964 – the largest generation in U.S. history; the survey was conducted for NAR by Harris Interactive®.
“David Lereah, NAR’s chief economist, said baby boomers are living longer and are different from previous generations because they have no set path for retirement and have more varied circumstances in life. ‘The differences from past generations – and between baby boomers themselves – will have a significant impact on housing needs over the next 10 to 20 years that is very different from the World War II generation, and many boomers simply don’t know how they’ll retire,’ he said.
More from Lereah, a Boomer himself and a really smart guy: “A significant portion of baby boomers married later in life and had children at a later age, which means many will continue to work beyond the traditional retirement age. Older boomers are thinking about retirement, but one-third expect to go back and forth between periods of work and periods of leisure, and another 35 percent want to work at least part-time or start a business – all of this will have an impact on the kind of homes they buy as well as where they buy them.” The median age at which baby boomers expect to stop working is 70, but 27 percent say they never intend to stop working.
Lereah adds that most baby boomers are currently in the workforce, a good portion of them have children living at home, and boomers remain a driving force in the housing market. “Just over a quarter of the boomer generation is aged 55 to 60, which is when many people traditionally begin to focus on their retirement plans, but analysis of the survey suggests they are more likely to stay in the workforce longer and will be less likely to downsize than previous generations – the leading edge of the boomer generation is the key to future housing impact,” he says.
“Because they will be in the workforce longer, boomers will postpone purchase of retirement property and won’t be making those moves as early as assumed,” Lereah says.
Forty-two percent of survey respondents would like to retire in the South, 32 percent in the West, 15 percent in the Midwest and 12 percent in the Northeast. “This tells us that the Sunbelt will remain a traditional draw for retirees,” Lereah said.
Most boomers live in two-income households, with a median income in 2005 of $64,700, which is 31 percent higher than the median for all households.
This generation makes up 37.5 percent of U.S. households, but receives nearly half of all aggregate household income. “This translates into a lot of purchasing power, and helps to explain why 8 out of 10 boomers are homeowners,” Lereah said.
For baby boomers earning $100,000 or more, the study shows that more than 9 in 10 are homeowners. Among middle-income boomer homeowners, home equity accounts for fully half of their net worth. Even so, 19 percent of respondents are renters, 37 percent say they have just enough to make ends meet and 17 percent say they are having financial difficulty.
A quarter of baby boomers own one or more other kinds of real estate in addition to a primary residence: 13 percent own land, 8 percent own rental property, 7 percent a vacation home or seasonally occupied property, 2 percent commercial real estate and 3 percent some other kind of real estate.
Four out of 10 respondents intend to convert their vacation home into a primary residence in retirement. Analysis by NAR shows baby boomers are proportionately more active in the second home market, owning 57 percent of all vacation/seasonal homes and 58 percent of rental property.
Ten percent of boomers indicate they plan to buy some form of real estate within the next year, which corresponds with U.S. Census Bureau data that shows 3.5 million boomer households moved during the last year. Two-thirds are considering a primary residence, but the rest are thinking about land, second homes or commercial property.
Now, here’s something I can identify with, having “officially” retired in 2001, when I started drawing Social Security benefits, but continuing to work a variety of part-time jobs, including editing and writing for Huntington News Network:
“Most survey respondents were unsure of their financial future, with three-quarters saying they are not financially prepared for retirement and many expressing anxiety about their ability to retire. Some boomers said they might withdraw retirement funds for housing or real estate expenses.
Peter Francese, an independent demographic trends analyst and founder of American Demographics magazine, consulted on the findings. “For the vast majority of baby boomers, retirement is somewhere off in the future,” he said. “Considering that boomers are healthier than their predecessors, and are more likely to work in an office setting, many of them may work five or 10 years beyond the traditional retirement age of 65,” he said.
Half of boomers who live in an urban area would like to retire in a small town or rural area. Their ideal retirement location characteristics include a lower cost of living, being near family, quality health care, better climate and being near a body of water.
More than a third of all baby boomers want to retire in an urban or suburban setting, motivated by quality health care and cultural activities. Half of boomers said they would consider living in an age-restricted community. Given a longer tenure in the work force baby boomers may choose a larger home than earlier generations, speculates Francese. “Boomers may want or need a somewhat larger dwelling that includes one or two home offices, and a low-maintenance home on a single level would have broad appeal to this group,” Francese said.
From the study: Almost one in four boomer households have a high net worth of $500,000 or more, and this ratio is expected to increase in the future as the generation ages. Virtually all high-net-worth households are homeowners (97 percent), and 47 percent are likely to also own other real estate in addition to their primary residence. More than a third expect to help children or grandchildren with a down payment on a home. Wealthier boomers want amenities where they retire, including cultural activities such as museums and art galleries. As a result, they are more likely to retire in an urban area or city.
Although most boomers are married couples and 27 percent have children under the age of 18, nearly two out of five baby boom households are nontraditional households, most of which are headed by women.
Non-traditional households may have different needs and desires about where they want to live. For boomers with children, neighborhood schools are of obvious concern, but for those without children, security may be a bigger issue.
Twenty percent of boomer households are headed by women, but because women aged 60 to 69 account for a quarter of homeowners in that age group, the number of women boomer homeowners is likely to increase much faster than average as they age.
Francese said there’s little doubt that the vast majority of baby boomers will delay retirement. “Some will put off retirement because they have to, but many because they want to,” he said. “Many will have a larger income stream to purchase possibly two homes, which they may use to move back and forth between their retirement life and their working life.”
“However, some caution should be exercised here regarding retirement preferences,” Francese said. “Surveys of future intentions often include a dose of wishful thinking, and attitudes can be influenced by the media and other outside pressures. For example, many are probably not going to be able to, or even want to, retire in a small rural town far from their current home, even if they may dream about it currently.”
Preliminary study results were released May 18 at NAR’s Midyear Legislative Meetings & Trade Expo, with a focus on the real estate and second-home appetite of boomers. The more extensive analysis released today is also supplemented with context and data from the Census Bureau’s mid-2006 estimates of population characteristics; it offers an abundance of information helpful for planning to Realtors®, builders, mortgage lenders and others connected to the housing industry.
The survey for the 2006 National Association of Realtors® study, BABY BOOMERS AND REAL ESTATE: Today and Tomorrow, was conducted online by Harris Interactive® between March 31 and April 6, 2006, among a nationwide cross section of 1,969 U.S. adults born between 1946 and 1964. Figures for age, sex, race, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. With 95 percent certainty, overall results have a sampling error of plus or minus 2.2 percentage points; the sampling error for various sub-sample results is higher and varies.
The study can be ordered by calling 800/874-6500, or online at: http://www.realtor.org/babyboomerstudy. The cost is $50 for NAR members and $125 for non-members.
A final note from somebody who moved from Los Angeles to a small town – Hinton, WV – in 1992. The Wall Street Journal recently spotlighted small towns as retirement destinations, including actor Andy Griffith’s hometown of Mount Airy, NC – the model for Mayberry. I’ve been to Mount Airy a number of times and like it. It’s a not near any body of water, unlike Hinton with its rivers and Bluestone Reservoir, but it seems to be a good place to live. Boomers – and others – seeking a “retirement” home could benefit from looking at places like Hinton, Bluefield (both the WV and VA ones), Princeton, WV – and small towns in West Virginia and elsewhere not far from cities.
Happy hunting!
COMMENTARY: Trader Joe’s: Still a Perfect Piece in the Downtown Huntington Puzzle
Posted by kinchendavid on December 20, 2006
By David M. Kinchen
Editor, Huntington News Network
Huntington, WV – Back on Sept. 27, 2005, I did a commentary suggesting that what downtown Huntington needed – in Pullman Square and the area around it – was a specialty grocery store catering to the people shopping in Pullman Square and places like Shawn Bresnahan’s Le Cook Store.
The ideal store would carry the kind of items people living and shopping in downtown Huntington desire – and there will be plenty of those in coming months and years – Organic foods, foods that require little or no preparation beyond a good microwave oven, good, inexpensive wines and other beverages, a wide variety of cheese, high quality bread, prepared deli food for parties, etc.
Tony Rutherford’s latest upbeat story on downtown Huntington reminded me that Tony was part of a group seeking a restaurant when the idea of a Trader Joe’s in Huntington hit me like the proverbial bolt of lightning.
Quoting from my earlier story:
A Trader WHAT?, you ask. If you’ve lived in California, as I did for 16 years, you don’t have to explain Trader Joe’s. They’re specialty food emporiums geared to those seeking what I call affordable gourmet food of all kinds. Typically occupying only 10,000 square feet, TJs – everybody in the Trader Joe’s cult calls them that – have the most loyal customers of any retailer I’ve seen. TJ shoppers really are members of a cult.
Trader Joe’s carries an extensive array of domestic and imported foods and beverages including fresh artisan breads, Arabica bean coffees, international frozen entrées, 100% juices, fresh crop nuts, deli items, and vitamins and supplements, as well as the basics, like milk and eggs – all at prices that rival discount grocery stores. At the stores I’ve been to, someone is offering samples of foods for sale in the store, often several demonstrators with their colorful shirts.
Founded by Californian Joe Coulombe almost 40 years ago – the first Trader Joe’s opened in Pasadena, Calif. in 1967 — Trader Joe’s has been owned since 1979 by the giant Aldi group of Germany. Yes, the very same Aldi group that runs the warehouse-type supermarket in the west end of Huntington and thousands of similar ones in Europe, Australia and the U.S.
That’s where the similarity ends. Trader Joe’s stores feature employees garbed in Hawaiian shirts and khaki shorts. Even the store manager – called the “Captain” in TJ-speak – dons a colorful Hawaiian shirt when he or she takes the helm. The Aldi people kept Coulombe’s policy of extensive local autonomy for each store’s “captain,” allowing him or her to tailor the merchandise to the local market. Aldi didn’t mess with a formula that was working very well indeed.
After saturating the California market by the late 1980s with more than 100 stores, the front-office types of Trader Joe’s started opening stores in Boston and other East Coast markets. They also expanded to Chicago, Detroit, Cincinnati, Columbus and similar Midwest locations – always in upscale neighborhoods or suburbs. There are now more than 200 stores in 19 states, with about 25 new ones opening every year.
TJ customers are highly educated, which prompted that light bulb to go off. My old shorthand was “Volvo-driving, professor types.” Huntington is really a city of 320,000 people spanning several counties and three states – West Virginia, Kentucky and Ohio.
The Tri-State has many people who would flock to a Trader Joe’s for their daily bread, soup – the stores have marvelous private-label canned soups that make the nationally advertised preservative-laden brands taste very ordinary by comparison – and just about anything an educated consumer could want. TJ stores usually have 2,000 different items, compared to 7,000 or so at a conventional (boring, in my opinion) supermarket.
The Marshall University community alone could support a TJ’s in Pullman Square. There’s one not far from the University of Michigan in Ann Arbor and the two on the North Side of Chicago draw heavily from university students at De Paul, the Northwestern University Medical Center complex and the many upwardly mobile residents of Lincoln Park, Lakeview, Wicker Park, Bucktown, Old Town, etc.
(Update, just back from an early December trip to Chicago, I stopped in at the newest Trader Joe’s, on Ontario Street, near Rush Street, in Chicago. This River North store serves one of the most upscale demographics in the country. Not all of TJ customers are rich, by any means, but they’re the kind of customers retailers would kill for!)
In Chicago recently, my shopping selection in the Lakeview store on Lincoln Avenue included pastrami, chili, corn chowder – something I love that’s difficult to find in many supermarkets – green olives in a foil pouch, dark rye bread and other items to make a delicious, healthful meal. I’m a soup/salad/sandwich kinda guy!
Virtually all the canned goods and other items are private-label brands, manufactured to TJ’s rigid specification minus preservatives and additives. Vegetarians will find the store a paradise, as will those who prefer Kosher food for religious or health reasons. Do I sound enthusiastic??!! Blame it on my addiction to TJ stores in Sherman Oaks, Granada Hills and Encino, as well as the two Chicago ones.
Lest I forget, there’s the Trader Joe’s “Fearless Flyer,” which appears periodically on no set schedule and has cleverly written and illustrated copy on new products at the stores. It’s fun to read, it’s irreverent and it has been called a cross between Consumer Reports and Mad magazine! Each edition highlights a selection of Trader Joe’s products that the company buyers believe are worthy of customer interest, including heat-and-eat meals and items that are reduced in fat and calories or have other special attributes.
Perhaps without even knowing about the saying from master showman Roxy (S.L. Rothafel), the man behind New York City’s Roxy Theatre and Radio City Music Hall, Joe Coulombe and his successors – including octogenarians Theo and Karl Albrecht of Aldi – have consistently followed the maxim “Don’t give the people what they want—give ‘em something better.”
You don’t need an MBA to succeed in business following that advice!
Web site: for more information about Monrovia, Calif.-based Trader Joe’s: http://www.traderjoes.com
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