Wednesday, March 24, 2004

The rising minority: single female homebuyers

A story published today in Reality Times notes that even though it's easy to find homebuyer demographical information concerning seniors, blacks, Hispanics, gays and other population segments, there's surprisingly little information on a fast-growing group of homebuyers - single women.

According to the 2003 National Association of Realtors survey of buyers and sellers, 21 percent of home purchases made in 2003 were by single women, up from 18 percent in 1997.

Nationally, the home ownership rate for households headed by females hit 53 percent in 2000, up from 48 percent in the early 1980s, according to census data.

Much of this change is being driven by single female first-time homebuyers under age 45 and living alone. This demographic increased to nearly 30 percent in 2000, up from 22.6 percent in 1985, according to Harvard University's Joint Center for Housing Studies.

While housing statistics hasn't subcategorized the older single female homebuyer, it's obvious that these older single women have housing needs, too, and their needs may or may not be similar to those of first-time younger single female buyers.

For example, a young single homebuyer may want an upstairs condominium for safety, while an older female buyer may want the downstairs unit to avoid stair-climbing. But we can only assume that is true if we rely on stereotypes instead of data. If some entity were to do a study, the findings may be surprising.

What we do know is that older single women in general are also a growing population, as statistics on boomers and seniors indicate. The U.S. Census Bureau estimates that by 2025, approximately 35 percent of the nation's population will be 50 or older, versus just 28 percent in 2000. According to information on the Seniors Real Estate Specialist Website, there are now more than 33 million Americans 65 or older, representing nearly 13 percent of the population. 

According to a wide variety of sources compiled by the National Association of Realtors, it's time to start paying attention because single women not only aren't going away, they are increasing in number, and are more likely to view homebuying as a solid investment opportunity than in the past, along with others who are fleeing the stock market, disappointed in low savings account rates of return, and desiring to take advantage of record low interest rates and accommodating loan products.

According to the U.S. Census in 2000, there were 5.3 million more women than men. By 2050, there will be approximately 6.9 million more women than men. And guess what? They're not waiting for their princes to come. In other words, they aren't waiting to find a mate to buy a home, but are community planners, builders or Realtors getting the message? Are we planning, building and selling the homes single women really want?

There's been a subtle but seismic shift in the demographics of homebuyers and what they want in a home, but housing is still designed to appeal to the largest homebuying demographic - the married couple with children, or nuclear family.

And that may be a mistake for community planners, builders and Realtors, who may think they are marketing to the sure thing when they are missing a huge opportunity with nontraditional buyers like single women.

For one thing, the married-couple household is declining, slipping from 80 percent in the 1950s to just 50.7 percent today, according to the U.S. Census Bureau. And families with breadwinner dads and stay-at-home moms are less than one-tenth of all households, and married couples with kids will drop from 25 percent today to 20 percent by 2010, when nearly 30 percent of homes will be occupied by someone who lives alone (compiled by Businessweek for the cover story "Unmarried America.")

There are 86 million singles which are heading toward establishing a new majority. Female single homebuyers combined with male single homebuyers make up 40 percent of homebuyers according to the NAR.

Yet community planners, builders, and many Realtors, if they would admit it, still cater to the married couple with children as if they were an inspirational, stabilizing ideal, even though the nuclear family makes up less than 25 percent of potential homebuyers.

As homeplanners, what are we thinking?

As marketers, it's obvious that the home products that are built cater to others, as if singles were leading some kind of less-than lifestyle. No one stops to think that there clearly aren't enough partners, let alone suitable partners, or that some people may simply prefer the single life. So the single life is viewed as a transition stage, but millions never transition out of it. If singles don't view their lifestyles as temporary, why should community planners, builders and Realtors?

At a panel discussion in Washington, D.C. in November 2003, sponsored by the Urban Land Institute, Jacinta McCann, managing principal of EDAW, Inc said, that despite the fact that the majority of women work full-time and the number of female-headed households is up sharply, most U.S. housing is "based on the Levittown model" with the home as the haven for the male breadwinner. To underscore the point, two-thirds of owner-occupied housing units are single-family detached homes (often located in isolated communities) which do not necessarily meet the needs of single-parent households, childless double-income couples; or even families with children in which the mother constantly juggles commuting, chauffeuring and running errands, said the ULI report of the event.

Single-family homes aren't necessarily the first choice of single women. Incredibly, three-fourths of single female homebuyers don't even have children, or at least children who are living at home, while in 1997, more than half of the women buying homes did have children to house, says the NAR. Further, the 2000 Census showed a large (49.2 percent) increase in the number of single-parent households, most likely to be headed by women.

This could mean that single women are buying single-family homes because of lack of other options when they would prefer other housing options such as condominiums, townhomes, zero-lot-line homes.

Another UDAW associate Steven R. Kellenberg, suggests this might be so. "Many of the attributes women in general seek in communities are in alignment with the preferences of other so-called "nontraditional households such as immigrant families, childless couples, and singles."

This could be one reason behind the surge of condo-buying when the price midpoint for condos in the final quarter of 2003 topped that of detached single-family homes, $174,700 over $171,600 as reported by the National Association of Realtors. Sales volume is also closing on one million condo units sold per year, making it the fastest selling housing type.

According to the NAR, about one-third of condo buyers are single women, while single women make up about one-fifth of single-family homebuyers.

With rising condo prices, buyers aren't necessarily choosing condominiums to save money, so the choice could be for other reasons, like a sense of community.

Like everyone else, single women just want to belong, and feel like they belong - especially in their own homes.

So next time you come across a single female homebuyer, put your stereotypes aside, and think about what would be a great home for her. Talk to builders and community planners about building more singles-friendly housing. Don't steer singles to buy more or less home than they need for "resale," because traditional concepts of what constitutes resales are changing. And consider these stats from the NAR:

  • The single female segment of the homebuyer population accounted for 21 percent of all homebuyers in 2001
  • Single females accounted for 13 percent of all second/vacation homebuyers
  • Single women purchased approximately one in five homes in 2003, while more than one in ten were purchased by single men.
  • More women (15.5 million) than men (11.8 million) lived alone. Among these, women were more likely than men to own their homes (56% vs. 47%).
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