A privately held homebuilder bullish on retiring baby boomers is planning to add to its Florida portfolio of 55-and-over developments.
GL Homes wants to build its latest project of 481 homes in suburban Boynton Beach in southwestern Palm Beach County, about 35 miles north of Fort Lauderdale. The local zoning board gave initial approval this month, and county commissioners are expected to consider the proposal this month.
This would be GL's 12th "active-adult" development in the Sunshine State since 1996. The site is near another 55-and-over community, Valencia Grand, that GL is constructing. That 659-home development is more than 95% sold, according to GL.
"Active adults are at a stage in their lives that they have the time and desire to stay fit, be incredibly sociable and live their best lives," Marcie DePlaza, GL's chief operating officer, said in an email.
Demand for housing for people 55 and older is growing as the U.S. population ages, and that is affecting the real estate industry. "There is a demand surge on the horizon as the Baby Boomers become the largest generation in history to enter retirement, bringing with them a whole new set of market expectations and lifestyle desires," design firm Gensler said this year in its Defining Active Adult: A Promising Housing Model for an Active Aging Future report.
The company's 55-and-over projects, all marketed under the Valencia brand, come with large clubhouses, pools, pickleball courts, golf simulators, nail salons and other features. Full-time social directors organize activity schedules that include clubs, games and live performances.
Cash buyers
Across Florida, GL is planning a Valencia development in Pasco County, north of Tampa. It also has active developments in Naples, south of Tampa, and in St. Lucie County, north of Palm Beach. Prices in Valencia developments statewide range from $400,000 to more than $1 million.
Only about 30% of GL's Valencia buyers obtain mortgages, according to DePlaza. But, she said, the Federal Reserve's decision last month to lower interest rates by half a percentage point is still an important factor for baby boomer buyers.
"Lower rates positively impact our sales because the Valencia buyers typically sell their previous homes to young families who are affected by the lower interest rates," DePlaza said.
GL, based in Sunrise, Florida, has sold tens of thousands of single-family residences since its founding in 1976. The family-owned business builds exclusively in Florida, closing on 2,062 houses last year, making it the nation's 22nd-largest private builder, according to Builder magazine.
To counter elevated mortgage rates in recent months, some large, publicly held builders increased demand through mortgage rate buy-downs, using profits from sales to lower buyers' interest rates. The move helped overcome the elevated borrowing costs that have dissuaded house shoppers and left some sellers holding onto properties.
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But GL President Misha Ezratti said in July that his company hasn't had to offer mortgage rate buy-downs because GL markets primarily to luxury buyers and retiring Baby Boomers. Those customer groups, Ezratti said, typically don't need incentives because they already have personal wealth and substantial equity in their existing homes.
Right niche
"This is a great niche for them to be in," said Brad Hunter of Hunter Housing Economics in West Palm Beach, Florida, in an interview.
Another factor in GL's success is its reputation among competitors and buyers, Hunter said.
In recent weeks, Florida has been hit by hurricanes Helene and Milton, causing severe flooding and damage to homes and other properties. Some residents have wondered whether the risk of living in such a hurricane-prone state is worth it. But industry observers point out that storms don't threaten Florida every year, and when they do, the state is equipped to deal with it.
After Category 5 Hurricane Andrew devastated southern Miami-Dade County in 1992, lawmakers created a statewide building code to fortify structures against severe weather. That uniform building code is why many people prefer new homes, according to DePlaza.
"I think the pros of living in Florida still outweigh the cons, and buyers recognize that," she said.
