At the beginning of the 20th century, the average life expectancy at birth in the United States was 47. And while there were those who lived to age 65, they were few and likely to be frail, and they were not expected to live for many more years. Today, the average U.S. life expectancy at birth is 78.

These additional 33 years of expected life have not been just “tacked on at the end,” to use Mary Catherine Bateson’s phrase. Instead, “Today’s sixty-five-year-olds are starting new careers or continuing old ones, traveling around the world, and eloping with new loves,” Bateson writes in her 2010 book Composing a Further Life, a study of the stage of life she calls “adulthood II.” In other words, the additional years are ones in which people have the energy and health to continue their active lives.

The importance of Bateson’s observation is underlined this month as the first baby boomers turn 65. Over the course of the coming decade, the number of people turning 65 will be unprecedented. According to the U.S. Census Bureau’s national population projections released in 2009, the number of Americans 65 years old or older will grow from 40 million to 54.6 million by 2020—a 36 percent increase and the addition of 14.6 million seniors to the population.

However, do not expect the boomers to accept the title “senior” easily. While they may sign up for Medicare and accept senior discounts, they will not be acting like their parents did when they turned 65. Remember that this group of boomers has been defying expectations since the tumult of the 1960s. They should not be expected to go gently into their “golden years.”

What does this have to do with U.S. housing markets? A lot. A good place to start might be to recognize that as the boomers age from age 65 to 75, very few will be moving into seniors’ or retirement homes. It is likely they will move—freed as they are from the ties of kids and their past jobs—but it will not be as their parents or grandparents moved, or even as those who turned 65 in the past ten years did. In fact, all past experience of the housing patterns of those 65 and older should be considered suspect—unreliable predictors of housing patterns for this age group in the coming decade.

Studies of boomers suggest that they do not want to be isolated or out of the action. With years of productive life ahead of them, they are likely to continue to work full or part time, and if they move, to move to lively, walkable places with good health care, good jobs, access to the arts, and—for many of them—their kids and grandkids nearby. Among the factors likely to influence their choice of a new home are:

  • the urge to downsize with no kids at home;
  • the desire for an easier home to maintain and leave behind in order to travel the world or visit grandchildren; 
  • the urge to move closer to family and friends, especially grandkids who may be living in faraway cities; 
  • the need to live more frugally due to the collapse in the value of their homes and retirement portfolios brought on by the recession, and by the fact that they may live much longer than people have in the past; 
  • the desire to begin a new career in a new location; 
  • the desire to return to areas where they grew up; 
  • the desire for high-quality health care and public transportation; and 
  • the desire for an affordable cost of housing and of living.

Some will stay in the suburbs, either by design or because they are trapped by the drop in the value of their homes. Keep in mind, however, that the classic American suburb was designed in the 1950s as a place for young families to raise kids, not for older adults to age in after the kids have left. A growing number of suburban boomers, especially those with more education, have been and will continue to leave the suburbs with their car- and kid-centric lifestyle. The “blue collar” suburbs, on the other hand, are likely to be more stable and face the challenge of finding ways to support a growing population of aging seniors.

In short, the combination of greater energy and better health, the expectation of a longer life, freedom from kids and a previous job, and new financial constraints is a volatile mix. There are those who will stay in the suburbs or move from one suburb to the next. Others will move to an urban location, be it the central city or a suburban town center. Some undoubtedly will move to the Sunbelt—perhaps grabbing a cheap house in one of the regions with a high foreclosure rate—but probably not in the same numbers as in the past.

As for traditional housing for seniors, there will be a strong market, but not among the boomers. The target market for this type of housing is more likely to be those age 80 or older—a group that will grow by 2.4 million, or 21 percent, over the next ten years. It is unlikely that the boomers will be looking for traditional retirement housing for at least ten to 15 years.

When they do, expect them to want a very different style and organization of seniors’ housing. In fact, it might be possible to catch the boomer market early if a new style of urban life care community were developed—one with cachet, flexibility, and a sense of style that does not speak of the home grandmother lived in during her final days.

The rapidly growing U.S. senior population is, in fact, a rich market, which is good news for the beleaguered housing industry. However, it will be a market unlike any seniors’ housing market in history. This market will constitute a serious challenge to those who rely on past trends to plan for the future. On the other hand, it will provide great opportunities for those who can look forward and anticipate the new markets that will emerge in the decade ahead.