November 2, 2016
I have commented on the “billion-dollar” opportunity for home improvement aimed at what we call “Thriving in Place.” Now I have a number to attach to it. The Joint Center for Housing Studies at Harvard University has studied the industry thoroughly and found that the market for this kind of renovation is $13 billion. This figure will grow rapidly in the years ahead, as more and more people age into their 60s, adding to this business opportunity.
Drivers for Aging in Place Services
The most obvious driver is just the aging of the baby boomers, but there is another factor. The cost of assisted living facilities and nursing homes has risen sharply over the past few decades, and the increase in wealth, while significant, has not kept up. Homeowner equity has doubled in the past four years, and that has started to drive a lot of additional home improvement spending. That said, most people turning 60 have inadequate savings and inadequate wealth, even with the increase in their home value, to support a move to an assisted living facility (people born in the 1950s have an average of $179,000 in wealth, including the equity in their home, which would be depleted in about 5 years). This underscores the need to empower people to remain independent in their homes well into their 70s, 80s, and 90s. People are living longer than they used to, and many are living longer than they expected to, which adds even further to this need. Even those 60-year-olds who did save money carefully are now realizing that they may live for another 30 or 40 years, and have both the desire and the need to live independently for a long time.
Professional remodelers and architects are thinking more and more about ways to prepare people’s homes in a way that does not detract from the look of the home, but that actually enhance the attractiveness and ease of the home. Those who get the most creative, and who go actively after this rapidly growing niche, will profit themselves as they benefit their customers.