Return to Virginia Business - August 2004

Wanted: luxury lifestyle close to home
Boomers transform housing industry with demand for age-restricted, resort-style communities

Related story:
- Virginia Regional Retirement Community Directory

by Ruth A. Hill
Virginia Business
August 2004

Leaving a waterfront home on the Northern Neck was a tough call for Marilyn and Fred Ballard. Marilyn, 56, and Fred, 61, enjoyed the waterfront tranquility and beauty of the Neck. But they wanted to be closer to family and medical care, so the retired couple moved to Regency at Dominion Valley in Haymarket, an active adult community for people 55 and older.

At their new location, the Ballards keep busy with golf, aerobics, card playing and scrapbooking. “Nearly everyone is here for the same reason — to get involved in the community and to be close to family,” says Marilyn.

Only a generation ago, the dream of many people heading into retirement was a downsized home in a sunny clime. Back then, destinations such as Florida, Arizona, and southern California conjured up the good life. Now instead of the Sunbelt, many aging baby boomers are opting to stay close to home. They want to be within easy driving distance — 50 to 100 miles— of families and longtime friends. Rather than scaling down, some people are moving up to larger homes in communities with resort-style amenities: gated entry, pool, golf course, fitness center, fine dining and fulltime activity directors. And the 55 and over crowd wants these developments to be near cities so they’ll have access to the latest in medical technology, shopping and cultural events.

These preferences, along with the sheer numbers of boomers, are reshaping the housing industry in Virginia and the rest of the country. With 10,000 people turning 50 every day, it’s easy to see why the over-55 market represents the fastest growing segment of America’s housing industry. Five years ago, age-qualified communities were virtually nonexistent in the commonwealth. Now, about 20 have been built and more are on the way. Demand is so great that Virginia developers say they’re hard pressed to keep up, particularly in Northern Virginia. At Heritage Hunt Golf and Country Club in Gainesville, located about 45 minutes from Washington, D.C., prospective residents join a lottery for the chance to buy a lot.

Strong demand means these developments are becoming a larger part of builder portfolios. Christopher Ryan, president of Washington Active Adult Business for Pulte Homes (owner of the Del Webb brand of senior communities), points out that this segment “will soon be about 40% of Pulte’s overall business within the next couple of years. ”
With building occurring near large population centers, Northern Virginia has become a hot market for active adult communities, particularly the area 50 miles west and south of the nation’s capital. A proliferation of upscale communities in this corridor is attracting empty nesters, retirees and people who still work. Price tags on some of these homes exceed the half-million-dollar mark, and many condos can’t be had for less than $400,000. The prices don’t seem to faze boomers, many of whom have inherited wealth and are more affluent than previous older generations.

Demand is even affecting real estate certifications. Dave Shollenberger, a Weichert realtor in Prince William County, recently became a certified seniors real estate specialist. The training, he says, gives him insight into the diverse housing needs of seniors at all ages and life stages. “A lot more people are looking for homes in active adult communities than there were a few years ago,” he notes. “They want communities that are quiet, where bikes and roller skates aren’t all over, in a location near their families. The demand is simply far greater than the supply, and some people have to wait a year or more to get the house they want.”

Developers and buyers aren’t the only ones interested in the mature market. Some cities are quick to approve active adult communities, because people 55 and up don’t need public schools, which in some localities account for 50 percent of the real estate tax revenues. Another plus: retirees have time to volunteer. Last year in Virginia Beach, 319 volunteers gave a total of 56,576 hours.

In Southside Virginia where the closing of textile and furniture mills has reduced local tax revenues, Danville is looking to recruit retirees. “We are in the early stages of planning a campaign to actively recruit seniors to our area,” says Renee Wyatt, marketing and research manager for Danville’s economic development department. “Each retired couple who relocates to a community has the same economic impact as 3.7 manufacturing jobs. Our target market is those with higher income levels.”

Surprisingly Roanoke, which does well in national rankings as a retirement haven — it was named one of the Top Places to Retire recently by Forbes magazine — hasn’t attracted age-restricted, resort-style communities just yet. While cities try to tap into the market, developers such as Pulte are adding more developments in prime locations. Falls Run in Fredericksburg was Del Webb’s first foray into the Virginia market. It opened in 2002 with a plan to build 585 single-family homes and attached villas. Although it lacks a golf course, Falls Run maintains a partnership with a nearby course where residents can play. Now that it’s almost built out, Pulte is beginning a mixed-use residential and retail project just two miles away that will be called Celebrate by Del Webb. It will include 1,400 homes in various styles geared for the 55 and older demographic — single family, condos and villas. Elsewhere in Virginia, Del Webb is seeking more land for projects, as are competitors US Home and Toll Brothers.

US Home broke ground on its first mid-Atlantic region active adult community a couple of decades ago with Heritage Harbor in Annapolis. Jerry Berman, president of US Home’s Virginia division, says the company began looking for Virginia land in the early ’90s but couldn’t find the right parcel. When another developer defaulted on an 800-acre parcel in Gainesville, US Home bought it from the bank.

After completing the purchase, the zoning process was easy. “Prince William County was very happy to have us and gave us swift zoning approval in 1997 after we showed them our studies about why active adult communities are favorable developments,” recalls Berman. Closings on Heritage Hunt’s single-level homes began in 1998, and by 2003 the National Council on Senior Housing had named this golf course and country club community set in the rolling hills of Virginia’s hunt country as the Best Active Adult Community in the nation. When fully built out, the project will have about 2,000 homes on 800 acres, with prices ranging from $275,900 to $700,000.

Colonial Heritage in Williamsburg is a US Home project of about 1,500 homes. US Home plans to enter Del Webb’s Fredericksburg neighborhood later this year with Virginia Heritage, a community of 800 homes. Berman says the company also is seeking land in the Charlottesville area because it’s not that far from Northern Virginia and could draw buyers from the D.C. suburbs.

Other Virginia communities would like developments, he says, but demographics largely determine where developers will put one. Amenity-rich communities require a large investment. Before US Home delivered its first home at Heritage Hunt, the company spent $40 million on land purchase and site development, including an expensive access road just off Interstate 66.

In Northern Virginia, competition is heating up. New developments include Toll Brothers’ Regency at Dominion Valley in Prince William County. This active adult community is part of a 2,800-acre planned community that’s surrounded by multigenerational homes, two golf courses, three clubhouses, six swimming pools, elementary and high schools, a shopping center, two churches, and an amphitheater. Paul Eberz, vice president of the Regency community, says his company is seeking Virginia land for more projects, but the site must meet specific requirements. “ We want significant natural features and a setting, so this takes time to find the right piece of ground.”

Finding prime land and gaining favorable approvals is pushing Richmond builder D.O. Allen Homes out of state, where CEO Donald Allen says it’s easier to get zoning and permits. “There is certainly demand in the Richmond area for active adult, and we want to grow our business, but we don’t like the pace you have to do it in this area. It took us two years and a lot of money to get something done,” he says. Currently, D.O. Allen is building Martin’s Grant, an age-targeted community of 42 homes in Richmond as well as 400 homes in the Raleigh area, and an active adult product in Jacksonville.
As developers troll for more land, real estate analysts expect the active adult and senior market to remain strong. After all, it’s still 12 years before the first boomers (born in 1946) turn 70. Altogether, the housing needs of those born during the post World War II baby boom (from 1946-64) are expected to influence the market over the next three decades. What’s clear is that hard-charging boomers — known for sparking major trends throughout their lifetimes — don’t want to slow down too much, but they are ready for some frills and fun.

Editor’s note: Ruth Hill is a Northern Virginia-based freelance writer and a resident of an active adult community.

Return to Virginia Business - August 2004