Community and Resort
May 1, 2014
Trends Among Florida's Top-Selling Active Adult Communities
By: Gregg Logan, Managing Director, and Clinton Howell, Associate
Florida’s active adult communities (AACs) are attracting a significant share of 55 and older households who are migrating to Florida to enjoy a new phase of their lives. These communities offer independent, relatively maintenance-free living along with social and recreational amenities for households in this age range. In the following discussion we’ve used the terms “retirement” and “retiree” to describe this lifestage, while recognizing that the meaning is changing. Just as the concept of retirement itself is being redefined (and many in this age range are still working), the most successful builders and developers are continuing to redefine the active adult community.
Among the 10 states that are attracting the most 55+ in-migration, seven are in the Sunbelt: California, Arizona, Nevada, Texas, North and South Carolina, and Florida. Although Florida has experienced increased competition from other states, such as North Carolina, it still captures more relocating 55 to 74 year olds than any other state in the nation. Florida is expected to have 4.3 million persons age 60 to 75 by 2028—1.2 million more than in 2013. Population in this age range is expected to increase by 520,000 between 2013 and 2018, and by another 440,000 from 2018 to 2023. Florida has the combination of elements these mature households are seeking: warm climate, moderate housing costs, quality healthcare, and close proximity to the beach. Low taxes are important, but not the most important; if they were, more retirees would be migrating to Alaska or Wyoming. In fact, Florida is ranked 10th in taxes, but first in 55+ migration. It also helps that there are three major interstate highways in the state, with I-75 providing a direct route from the Midwest and I-95 from the Northeast and Mid-Atlantic states, and both providing excellent access from the Southeast.
A recent RCLCO Advisory noted that The Villages AAC community in Ocala, Florida, continues to be the top-selling master-planned community in the U.S. The Villages maintains hundreds of units in inventory, selling anywhere from 200 to 250 new homes a month, engaging multiple local builders. The community attracts many friends of enthusiastic residents, which has created enviable momentum. While no other community matches The Villages in total annual sales, other Florida AACs are also doing well relative to non-AAC master-planned communities. Many are being developed by builder-developers such as Pulte, Lennar, Taylor Woodrow, Shea, AV Homes, and others. For example, Pulte’s Del Webb Ponte Vedra, located near Jacksonville within the larger Nocatee master-planned community, is currently selling at a rate of 240 homes per year, accounting for about 29% of Nocatee’s total. Del Webb has made significant investments in lifestyle amenities, and benefits from being located near a major metro area, as well as from its desirable Ponte Vedra address. Pulte is one of the biggest players in the active adult arena, in Florida and elsewhere.
Florida’s most successful AACs use sophisticated product segmentation to broaden their appeal and boost sales. While single-family detached product is dominant, about half also offer attached product. Lennar’s Heritage Hills in Clermont, Florida, achieves strong absorption by offering multiple product lines, including attached villas and single-family detached homes on 50’, 60’, and 75’ wide lots. Base home prices range from the mid-$150,000s to the mid-$350,000s. Unit sizes range from 1,400 to 2,900 square feet. Most active adult product in Florida is priced below $350,000, and the best-selling plans tend to be in the 1,900 to 2,100 square foot range.
Florida’s 55+ population is concentrated along both coasts: in Southeast Florida and Southwest Florida, as well as around the Orlando metropolitan area and Central Florida where The Villages is located. While the greatest increase in 55+ population is forecast for Central Florida, The Villages is nearing sell-out and expects to be out of the residential development business by 2017 (it will continue with commercial development, development of senior living facilities, and other activities).
Article and Research prepared by Gregg Logan, Managing Director, and Clinton Howell, Associate.
RCLCO provides real estate economics, strategic planning, management consulting, litigation support, fiscal and economic impact analysis, and implementation services to real estate investors, developers, home builders, financial institutions, public agencies, and anchor institutions. Our real estate advisors help clients make the best decisions about real estate investment, repositioning, planning, and development.
RCLCO’s advisory groups provide market-driven, analytically based, and financially sound solutions. RCLCO’s Community and Resort Advisory Group produced this newsletter. Interested in learning more about RCLCO’s Services? Please visit us at www.rclco.com/community-and-resort.