How Aging Populations Impact Real Estate Development

If there's one thing we can agree on when it comes to baby boomers, it's that there is a lot of them: 77 million, to be precise. Government census data tells us that nearly 10,000 baby boomers turn 65 every day. By 2030, over 20% of the U.S. population will be over 65.

Baby boomers aren't aging like generations in the past. They want to "age in place," meaning there are fewer single-family homes on the market for new families. While past generations transitioned to living with their adult children or in retirement homes, baby boomers' desire to stay put has led to a rise in multi-family homes needing to be developed.

This trend is expected to cause significant changes throughout the commercial real estate industry.

4 Sectors Expecting to See an Increased Demand

Looking at the exact numbers helps put this into perspective. The figures above mean that approximately one-quarter of our entire population will be senior citizens by 2030. This demographic shift is now referred to as a "gray tsunami."

If a quarter of our population were under the age of five, we'd probably need a lot of daycares and pediatricians. So, what do we need with so many people over 65? An aging population means an increased demand for:

Medical Facilities

A boom in senior citizens means a need for more hospitals, laboratories, medical offices, and out-patient care facilities. Everyone uses hospitals and emergency services, but some facilities and programs specifically target older populations. There is increasing emphasis on special-care units and smaller satellite facilities rather than extensive, centralized facilities

Nursing Facilities, Both Long and Short Term

Senior citizens have more surgeries than other population groups, many of which require short-term, in-patient care afterward. This includes knee surgeries and hip replacements. These citizens can't stay in a hospital for six weeks, and they can't go home yet either. Physical therapy centers and short-term care is the intermediate step.

While some nursing facilities will accommodate the short-term patients mentioned above, others will need to be built for those expecting to be there longer. Long-term nursing homes need to be developed now, while the younger baby boomers are staying at home and aging in place. More than likely, there will come a time when many of them must transition to a nursing home because they require more medical care than their family can be expected to provide. As baby booms transition, these facilities must be built and ready to take on new residents.

Transportation and Delivery Businesses

In generations past, the elderly depended on their families for rides to the store or to bring them their groceries. This is no longer the case, and much of it has to do with the sheer number of that population. Census data explains that the number of people age 65 and older in the United States has grown rapidly over most of the 20th century, from 3.1 million in 1900 to 35 million in 2000. That number has only gone up! People are also living longer – about eight years longer than populations 100 years ago. At the same time, fertility rates have dropped.

There are far more senior citizens and fewer younger family members to help care for them. The Washington Post recently published an article describing how millions of workers are forced to choose between working full-time and caring for elderly family members. For those that must work or choose to work, outside services will need to be brought in to help. Much of the care for the elderly baby boomers in the future will fall on paid services, like transportation and delivery companies. When they are unable to drive or grocery shop on their own, these services will step in to help. The infrastructure should be developed now, meaning this is the time to get into this burgeoning sector.

Recreational and Entertainment Opportunities

Gone are the days of older adults sitting in a rocking chair, knitting a sweater. Baby boomers aren't slowing down. As a community, now is the time to develop recreational and entertainment choices that appeal to older Americans. This could be anything from adult daycare facilities to community centers to gyms and wellness specifically geared to their age group. Senior citizens often enjoy movies, concerts, crafts, dancing, eating, and socializing.

Populations Aren't Equal

It's worth pointing out that baby boomers being around 20-25% of the total population, applies to the country as a whole. Some states, such as Florida, have large older populations because people move there upon retirement. Florida's population is already about 20% senior citizens before all baby boomers have even reached 65. This number will only grow from here.

Gain Valuable Insights Into These Changes Via Real Estate Development Software

Soon, everything from healthcare facilities to transportation options will have to be rethought to accommodate the 77 million Americans claiming senior citizen status. Within these changes, sizable development opportunities in real estate will continue to emerge.

To get the most returns out of each project, you'll want to have the most modern workflows in place. Real estate development teams that ditch spreadsheets and bring on real estate development software benefit from proactive intelligence enabled by data analytics, automation, and AI. These commercial real estate technology advancements help you keep a more strategic eye on your project instead of reacting to curveballs that send projects off course.

Learn more about how real estate development software can help your team by reading The Ultimate Guide to Commercial Real Estate Technology.