Boomers Rule

For four decades, baby boomers have been remodelers' “bread and butter” as well as the appetizer, entree, and dessert. They've typically made up a minimum of 60% of a remodeler's business. Last year, however, the first group of baby boomers turned 60. When the pre-boomer generations hit their 60s and retired, they substantially cut remodeling dollars. Will 76 million boomers do the same?

Not a chance! Boomers broke all kinds of rules from the very beginning, and they're continuing to break them. “Boomers have unprecedented strength and willingness to spend money [on remodeling]. They aren't slowing down,” says Amal Bendimerad, a research analyst at the Joint Center for Housing Studies at Harvard University.

Indeed, new opportunities are appearing for remodelers as boomers near retirement. Hanley Wood, the company that publishes REMODELING, recently sponsored a survey of 2,000 boomers to discover what their dreams and desires are for their homes when they retire. Two seemingly opposite preferences ranked at the top of the list for the group: universal design and luxury.

For remodelers, taking advantage of these new opportunities and keeping boomer customers loyal for the next 10, 20, or even 30 years means understanding what boomers want in universal design and luxury, and how to market to and work with this clientele.

Many people think that universal design, which incorporates aging-in-place, is for “others” — the elderly or handicapped. “Universal design is about access, flexibility, ease, and convenience for everyone,” says Mary Jo Peterson, designer, remodeler, and principal of Mary Jo Peterson Inc. in Brookfield, Conn. “For example, changing the height of an oven for a person using a wheelchair makes it easier for an able-bodied person [as well].”

Boomers — 59% of those surveyed — say they're more likely to buy products with universal-design features if they're beautiful. “Boomers want functionality with flair,” says Jane Marie O'Connor, president of the Hawley, Mass., consulting company 55 Plus. A remodeler who can combine function and beauty “would be adding real value as a consultant,” she says. “You'll delight clients, enhance value, and build a reputation as a qualified person who works with customers to give them what they want.”

Fully 66% of respondents in the Hanley Wood survey considered single-floor living either appealing or very appealing. This translates to an opportunity for remodelers. For example, a boomer customer of Atlanta-based SawHorse Design was diagnosed with a form of arthritis that could make climbing stairs difficult, yet she lived in a two-story house. SawHorse owner Jerome Quinn remodeled her home for ground-floor living, adding a master suite next to the kitchen, a guest bedroom for a caretaker, and wider doors for a wheelchair.

In contrast to Quinn's project, Raleigh, N.C.'s Quality Design and Construction had a customer who used a wheelchair and lived in a one-story house, but who wanted her attic finished and equipped so that she could enjoy the space.

The first step in the project was to install a chair-glide so the customer could see how the project was progressing and discuss it with the remodeler. The finished attic bathroom features a wall-mounted sink and tilt mirror above it, as well as a curbless shower with a transfer bench seat and grab bars. Cabinets in the attic breakfast kitchen sit at 32 inches off the floor, while the countertop is just 30 inches high. According to Peggy Mackowski, who co-owns the company with husband and president David Mackowski, the customer uses the attic extensively and says she'll probably never use the ground-floor shower again.

Making a home comfortable, energy-efficient, and easy to maintain is another aspect of universal design, and boomers want that, too. “Green,” environmentally friendly homes are desired by 61% of those surveyed, while 84% of respondents want energy-efficient homes. For Paul Winans, of Winans Construction in Oakland, Calif., satisfying this boomer need includes installing new heating systems, adding insulation, eliminating rot, fixing leaks, and more. “People want to get their houses fixed up so they don't have to do anything for the next 15 years,” he says.

When boomers bring their elderly parents into their homes to live, usually adding space to accommodate them, universal design comes to the fore again. “[We provide] handicapped access to the bathroom, wider areas for wheelchairs, cabinets with the bottom halves removable for wheelchairs, lower outlets and receptacles, lower countertops, and private entries and exits,” says Ed Cholfin of Advanced Kitchens and Advanced Contractors, in Marietta, Ga. Cholfin says that such a remodel ranges from $120 to $180 per added square foot, depending on materials, trim, and labor. And this is a remodel desired by 26% of the boomers in Hanley Wood's survey.

In 2005, according to the Joint Center for Housing Studies, baby boomers accounted for $76 billion of the U.S. total of $143 billion spent on remodeling. “Boomers represent more than half of the remodeling market and the majority of high-end projects,” Bendimerad says. “They are pioneers in terms of massive and high-end remodels. As they get closer to their real senior years, the mix of projects is likely to change more to include aging in place, but this is not exclusive to luxury.”

Bendimerad's statistics are supported by Hanley Wood's survey, where one third of the respondents desired luxury during retirement in their homes. All 2,000 respondents were between 50 and 60 years old, too — more proof that aging boomers will still want the best.

“The best” is why the boomer clients of Teevan Restoration, in San Francisco, want luxury. These customers, who are younger boomers, “don't want super-flashy design,” says company president Ben Ladomirak. “Most people want luxury for quality's sake.”

On the other hand, Ed Cholfin's boomer customers, whose kids usually have left or are leaving home, want luxury for its own sake. “Luxury is number one,” he says. This means that master bath remodels ranging from $30,000 to $100,000 include heated floors, “fancy” tubs, whirlpool baths, and custom cabinetry, and kitchens are designed with beautiful accessories and high-end appliances.

During the last three years, Cholfin's average remodel for the 65% to 75% of his clients who are boomers has ranged from $75,000 to $125,000. With the kids gone or on their way out, “boomers are making a deep initiative to give themselves what they want,” Cholfin says.

Both Terry Quinn, of Almar Building and Remodeling, in Hanover, Mass., and Anna Mavrakis, of Mavrakis Construction and TNL Design Build, in Canton, Ohio, see their boomer customers of all ages wanting more space. For one boomer client, Quinn enlarged a kitchen for $46,000, and for another he completely remodeled a 2,000-square-foot basement for $100,000.

In late 2005, TNL Design Build completely gutted a 1930s home, added two new kitchens and three new bathrooms as well as a first-floor laundry room. The company also redid all the floors, paint, draperies, and furniture. Mavrakis says, “On most of our work, customers want the ‘wow' factor.” For this project, that included a master bath with a Jacuzzi tub, ceramic flooring, granite counter-tops, high-end plumbing fixtures, and a claw-foot Victorian tub.

Boomers want new products and “anything that's different that their neighbors don't have,” Mavrakis says. TNL does about six whole-house remodels each year for $250,000 to $400,000 each.

Word-of-mouth referrals are the best way to bring in boomer customers. “You can't do a hard-sell to this group,” O'Connor says. “Cultivating word-of-mouth referrals and using ads with testimonials increase credibility and show that [remodelers] understand the market.”

To keep boomer clients, trust is critical. “My typical customer comes up with a new project every two to five years,” Cholfin says. “If you satisfy them, they'll come back to you and refer you to their friends.”

Competence and professionalism are critical, too. “You must provide turnkey services to boomers,” Jerome Quinn says. “Provide help with selection — boomers don't want to go look at a bunch of faucets. They want remodelers to bring choices to them. They want help, direction, and guidance through the process. Remodelers should expect this and be able to do it.”

Listening is also vital. One of Winans' boomer clients planned to replace his home's aluminum windows with vinyl-clad windows. Winans met the client's budget with vinyl, but also showed him wood windows and their price. “It's key to identify the baseline, but also to provide some alternatives,” Winans says. The customer chose not only wood windows, but wood doors as well. The difference was tens of thousands of dollars. “If I'd tried to talk the guy into wood windows up front instead of going with what he wanted, we'd have been toast,” Winans says. “By allowing him to consider things step-by-step, he was in control all the way, and he ended up buying more than we ever thought he would.”

By understanding the changing needs of boomers and giving them the service they want, remodelers can assure themselves of a loyal clientele for decades to come. —Bridget Mintz Testa is a Houston-based freelancer who writes about residential construction, remodeling, technology, and business strategy.

Last year Hanley Wood, which publishes REMODELING, sponsored a survey titled “Every 8 Seconds: American Housing as Boomers Turn 60.” Research firm DYG conducted the online survey of 2,000 homeowning boomers aged 50 to 60 with household incomes averaging $100,000 or more to find out what they want in their “dream/ future” homes as they move into the next stage of their lives.

The survey identified a number of potential opportunities for remodelers.

• 12% of survey respondents want to make major structural changes to their current home so that people of all ages can live there comfortably.
• 17% want to do major remodeling or build a large addition onto their current home.
• 22% want to convert their current home into their dream home.
• 26% want a parent-in-law suite in their dream/future home with a separate bath and kitchen.
• 33% want luxury in their dream/future home.
• 38% want to move or remodel to live comfortably on one floor, and 66% think that having everything they need or want on one floor is either appealing or very appealing.
• 42% want to make minor changes to their existing home so that people of all ages can live there more comfortably.
• 59% are more likely to buy universal-design features if they are beautiful.
• 61% want green, environmentally friendly features in their dream/future home.
• 66% want universal-design features in their future/dream home to accommodate people of all ages, and 84% want bathrooms with these features.
• 68% want their future/dream home to have the latest state-of-the-art technology, appliances, controls, etc.
• 82% want their future/dream home to be low-maintenance.
• 84% want their future/dream home to be energy-efficient.
• 91% want a laundry room on the same floor as the bedrooms.
  
  Certified Aging-in-Place Specialist

  The oldest boomers are now moving into their 60s. If you'd like to learn more about providing remodeling services for them that include universal design, the smartest move might be to get the certified aging-in-place specialist (CAPS) designation through the National Association of Home Builders training program. (The National Association of the Remodeling Industry is also in the process of developing a universal design program that will begin in spring 2008.)

  Begun in 2002, the NAHB's CAPS designation was created by the NAHB Research Center and its 50+ and Remodelers councils in collaboration with AARP. To date, more than 1,000 remodelers have achieved the designation. It helps them work with customers who want to improve accessibility and convenience in their homes so they can continue living in them as they grow older — even if they face mobility or other physical challenges.

  Remodelers can achieve the designation by taking a series of three classes offered at national trade shows or through local and state home-building associations: Working With and Marketing to Older Adults; Home Modifications; Introduction to Business Management. Individuals with certain designations are exempt from the third class.

  “CAPS is an opportunity for a remodeler to develop the knowledge and skill base of how an older adult thinks,” says designer and remodeler, Mary Jo Peterson of Mary Jo Peterson Inc., Brookfield, Conn., who helped write the CAPS program for the NAHB. “It's a great marketing tool. It provides remodelers with an idea base and a presentation and business strategy.” For more information about CAPS, call the NAHB's Professional Designation Help Line at 800.368.5242 ext. 8154, e-mail CAPSinfo@nahb.org, or go to www.nahb.org/designations.