The Graying of America: Age and Opportunity
- Oct 16, 2009
By: Terry Munoz, Vice President of Nielsen Claritas
The graying of America may arguably be one of the single most dramatic demographic megatrends shaping our landscape. Although the U.S. population growth for individuals age 55 and over during the past nine years hasn’t been impressive—from 21.06 percent to 24.17 percent—growth for individuals age 55-64 increased by 30 percent over the same period. Given that the oldest Boomers turned 63 this year, maybe it’s time investors consider the opportunities this megatrend offers.
Before getting sentimental about one’s lost youth, let’s get to the facts. America is getting older. According to current-year estimates from Nielsen Claritas, the 55-and-over crowd now represents 74 million people, or 24 percent of the total U.S. population. Considering the sheer size of this group and the wealth they control, life in an aging world must be seriously considered.
Unlike our culture’s obsession with the youth over the past 50 years, our future will be based on the interests of older people. According to the U.S. Census, 2037 will be our oldest year, with nearly 30 percent of households being headed by a person over 65. Forty-eight percent will be single-person households. Going beyond the perennial sunshine senior markets like Miami, Tampa, Orlando and Tucson, you might be surprised to find the Northeast has some of the top markets for seniors. In fact, Pittsburgh, Cleveland and Buffalo are among some of America’s largest cities, where you will find more than 27 percent of their population over 55 years old.
What opportunities does an aging population offer? The market’s clear demand for retirement housing is the primary beneficiary. Why? Economic cycles have little or no effect on the natural aging process and the healthcare needs they represent. Demand for hospitals and conveniently located medical facilities will continue to increase. The demand for affordable seniors housing, particularly in ethnic communities currently underserved, is already a reality.
Since the facts support that the graying of America is a dramatic demographic megratrend shaping our landscape, serious investors can’t afford not to consider the impact seniors will have on future real estate needs. Working with changing demographic trends, rather than against them, is the best way to reduce investment risk–and likely enhance returns.