ActivePaper Archive New wrinkle in homes - The Dallas Morning News, 2016-08-12

REAL ESTATE REPORT

New wrinkle in homes

D.R. Horton targets baby boomers downsizing into retirement

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D.R. Horton

D.R. Horton's new Freedom Homes are aimed at buyers age 55 and up who want something smaller but affordable. There are no age-restricted neighborhoods planned just yet for Dallas-Fort Worth.

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D.R. Horton

A Freedom Homes development in the Houston area contains houses that are about 1,600 square feet and start at $256,000 for a two-bedroom, two-bath floor plan.

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America’s biggest homebuilder has set its sights on a familiar group of potential buyers.

Fort Worth-based D.R. Horton, like other high-volume builders, got its start constructing houses for the flood of baby boomers hunting first-time homes.

Now those aging boomers — almost 76 million strong are looking for new housing alternatives.

And Horton and other big builders are eager to tap that market.

Horton has launched a line of “Freedom Homes” for 55-plus homebuyers.

“We expect to have Freedom Homes communities open in at least eight markets by the end of fiscal 2016 and in approximately one-third of D.R. Horton’s 78 operating markets by the end of fiscal 2017,” said Horton vice president Jessica Hansen.

The Freedom Homes that Horton is building in one Houston-area neighborhood start around $256,000 for 1,600 square feet with two bedrooms and two baths.

“We do not have any specific Freedom Homes projects currently slated for Dallas-Fort Worth, but it’s a market we are considering and may potentially offer in the future,” Hansen said.

Horton is also building the seniors line in Arizona, Florida, Illinois, New Jersey and the Carolinas.

‘Active adults’

With demand for homes by 55-plus buyers expected to reach almost 250,000 units a year by 2020, many of the country’s largest builders are expanding into the “active adult” market.

Pulte, David Weekley, Toll Brothers and CalAtlantic Homes also have 55-plus housing.

“The 55-plus segment, like the regular single-family sector, is expected to continue growing gradually and steadily,” said Rose Quint, a research executive with the National Association of Home Builders. “I would say it’s very likely production builders will continue or begin to serve the 55-plus segment.

“Many smaller builders will also be involved in the 55-plus segment of the market.”

Horton, which builds almost 37,000 houses a year, got interested in the market after seeing that boomers were buying its most affordable Express Homes models.

“We began noticing the popularity of our entry-level product with empty nesters and the baby boomer generation,” Hansen said. “For our Express Homes brand in Florida, a significant percentage of our buyers are investing in what they classify as their last home.

“Although we’ve offered numerous communities that have appealed to active adult and retiree buyers, historically only a very small percentage of our offerings have been age-restricted,” she said.

Low maintenance

Horton’s new Freedom Homes are affordable single-story houses that are designed for low maintenance and located in age-restricted neighborhoods.

“We expect many of these communities will be gated,” Hansen said.

Unlike the mega senior home communities that have been built in Arizona or Florida, most of Horton’s Freedom Homes projects are around a hundred houses.

“Prices will vary across markets, but we are focused on providing homes that are affordable in comparison to the current inventory available in each respective area,” Hansen said.

She said Horton doesn’t have a handle on how big a share of its annual home starts this market could become.

“As the baby boomer population ages, there is significant opportunity to capture the over-55 market,” Hansen said. “As we introduce the brand into new markets, we will be able to have a better idea of what percentage of our overall business Freedom could ultimately be.”

Horton also recognizes that baby boomers for the most part don’t want to relocate to large, semi-rural communities as previous generations of aging buyers did.

“A lot of those buyers don’t want to live far away from where they have been living,” said Ted Wilson of Dallas-based housing analysts Residential Strategies Inc. “It’s a real challenge to find locations that are not overpriced.

“A lot of people who are older want a more modest house. They don’t need four bedrooms anymore.”

Twitter: @SteveBrownDMN