Introduction
Since the first Baby Boomer turned 30 in 1976 and bought his/her first home in the Woodbridge community in Irvine, Orange County has been a national trend setter for Baby Boomer housing. Today, that same buyer is 57 years old and can buy his/her retirement home in the Turtle Ridge community in Irvine, complete with universal design features (see http://www.irvineranch.com/universal).

Over the next decade, the award-winning Orange County architects, land planners and home builders will set the pace nationally for creative, profitable land use and home design for retirees. Just as has occurred over the last twenty years, we expect the nation to follow the trends in Orange County.

One of the most exciting opportunities will be at Rancho Mission Viejo, where the current developers of Ladera Ranch have submitted plans for 6,000 age-restricted homes plus another 8,000 homes that will certainly include elements desirable to retirees. The trend-setting development company is likely to establish an extremely segmented land plan that will appeal to most of the major retirement household psychographic profiles in Orange, Los Angeles and San Diego counties.

Market Opportunity
The Orange County Area has more than:

The County currently loses 1.5% more retirees than the national average because of the lack of senior-oriented housing. Much of the demand goes to neighboring Riverside County, which is home to a number of retirement communities by Del Webb, U.S. Home, Shea and others.

With the introduction of Talega Gallery in San Clemente, several age-targeted projects in the central part of the county, and a number of new senior apartment projects, Orange County’s senior retention rate should be much better this decade.

America’s 100 Best Places to Retire named San Juan Capistrano on their list, although we believe they are including adjacent San Clemente in the rankings. San Clemente, in particular, has been catering to retirees for decades, with much of the infrastructure and social scene necessary to remain a popular retirement destination for many years to come. A thorough analysis of Pre-Boomer and Early Boomer traits and home buying patterns is included in Sections 3 through 5 of this report.

Retirees are expected to buy more than 39,900 homes in the Orange County Area this decade, which is summarized as follows:

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THE TABLE OF CONTENTS IS AS FOLLOWS:

TABLE OF CONTENTS
AUTHOR'S NOTE
1. ORANGE COUNTY AREA FORECAST AND ANALYSIS			1
	Market Opportunity		1
	Forecasted Sales by Year Through 2010		2
	Entitlement Opportunities		3
	Projected Population Growth by Age		4
	Local Purchasing Patterns		5
	Equity in Existing Homes		6
	Competing with the Resale Market		9
	Current and Historical Construction Levels		9
	Conclusions		11
2. FORECAST METHODOLOGY			12
	Segmenting Demand		12
	Forecasting Sales Volume		12
	New Home Sales vs. Existing Home Sales		12
	Site-Specific Issues		14
	Retirement Designation		15
	Cyclicality Issues		17
	Positive Effect of the 1997 Tax Act		17
	Other Information		17
3. SELLING MORE HOMES			21
	Overview		21
	Common Retirement Buyer Traits		21
	Differences Between Past and Future Retirement Buyers		23
	Customer Service Requirements		23
	Increasingly Active Lifestyle		24
	Buying Lifestyle versus Buying a Home		24
	Buyer Survey Results		24
	Surprising Tax Findings		25
	Advertising Strategies		27
	Sales Strategies		28
	Creating a Sense of Urgency		28
	Selling the Lifestyle		28
	Conducting Successful Local Market Research		28
	Choosing Your Sales Force		28
4. GENERATIONAL EXPERIENCES			29
	Overview		29
	Their Shared Experiences		29
	Defining Pre-Boomer Home Buyers		30
	Defining Early Boomer Home Buyers		31
	The Experiences They Bring to the Home Buying Process		32
	1940s: Pre-Boomers Become The First Kids Raised		33
		in a Suburban Home
	1950s: Pre-Boomer Teens Love Elvis and Early Boomer		34
		Children Are First To Be Raised With a Television
	1960s: Pre-Boomers Go to College in Record Numbers and		35
		Early Boomers Become Competitive in Their Teens
	1970s: Pre-Boomers Flourish at Work and Early Boomers		38
		Lose Respect for Authority While in College
	1980s: Pre-Boomers Discover Credit Cards and Early Boomers		40
		Struggle to Buy Their First Home
	1990s: Pre-Boomer Workers Learn Independence the Hard		46
		Way and Early Boomers Become Wealthy in Their 40's
	2000s: Pre-Boomers Begin Buying Retirement Homes and Early		48
		Boomers Plan for a Working Retirement? Because They
		Want to Work
5. PSYCHOGRAHIC TOOLS			53
	Overview		53
	The 11 Major Psychographic Profiles of Retirement Buyers		53
	Suburban Dwellers		55
	Urban Dwellers		58
	Rural Dwellers		60
	Value Portraits®		61
	AARP Studies Reveal Boomers Will Continue Working, & More		62
	Best Places for More Research		64
6. SUCCESSFUL PRODUCT DESIGN			65
	Overview		65
	The Truth About Lifestyle Trends		65
	Competing With and Learning From the Remodeling Industry		67
	Universal Design		67
	The Universal Design Elements that Are Profitable		67
	AARP and Universal Design		68
	Warning: Expect More Universal Design Features in		69
		Building Codes
	Design Needs of the 11 Psychographic Profiles of Retirement		70
		Home Buyers
	Other Issues		71
	Safety		71
	Visit-ability		71
	Design Recommendations		72
	Marketing the Design		74
	Best Places for More Research		74
TABLE OF CHARTS
Table 1: Retirement Households and Purchase Rates, Orange County Area			2
Chart 2: Forecasted Retirement Home Sales, Orange County Area			2
Table 3: Retirement Home Purchases and Retiree Growth Rates by County, Orange County Area			3
Map 4: Retiree Designation, Orange County Area			3
Chart 5: Population by Age, Orange County Area			4
Chart 6: Retiree Growth by Age, Orange County Area			4
Chart 7: Home Purchases by Age, Orange County Area and U.S.			5
Chart 8: Propensity to Purchase by Age, Orange County Area			5
Chart 9: Homes Owned Free and Clear, Orange County Area			6
Chart 10: U.S. Homeowners Equity History			6
Chart 11: Homeownership by Age, Orange County Area and U.S.			7
Chart 12: Homeownership History, Orange County Area and U.S.*			7
Chart 13: Existing Home Price History, Orange County Area and U.S.			8
Chart 14: Household Income Levels, Orange County Area and U.S.			8
Chart 15: Age of Housing Stock, Orange County Area and U.S.			9
Chart 16: Historical and Current Construction Levels, Orange County Area			10
Chart 17: Historical and Current Construction Levels, United States			10
Chart 18: Historical New and Existing Home Sales Volume			13
Chart 19: Percentage of Households Who Bought a Home in 1999			13
Chart 20: Propensity to Buy a Home			14
Map 21: Retirement Designation by County			16
Map 22: Retirement Designation by State			16
Chart 23: U.S. Homeownership by Age			17
Chart 24: Boomers and Prior Generation Differences			23
Chart 25: Retirement Taxes by State			25
Chart 26: Generational Markers			32
Chart 27: U .S. Homeownership			33
Chart 28: Annual Real GDP Growth			34
Chart 29: Unemployment Rates			35
Chart 30: % of Those 25+ Who Had Graduated From High School			36
Chart 31: % of 25+ Year Olds With 4 Yrs of College or More			37
Chart 32: Historical Housing Construction			38
Chart 33: U.S. Employment Growth			39
Chart 34: Defined Benefit Pension Plan Participants as % of Work Force			41
Chart 35: Retirement Plan Participants as % of Workforce			41
Chart 36: Pension Plan Assets / Participant			42
Chart 37: 10-Year Inflation Rate			43
Chart 38: Mortgage Rates and Home Sales			43
Chart 39: Median New Single Family Home Size			44
Chart 40: Consumer Credit per Household			45
Chart 41: Children Born per Woman			46
Chart 42: 10-Year Dow Jones Returns			47
Chart 43: U.S. Median Home Price			49
Chart 44: Net Worth of Households Aged 55-64			50
Chart 45: Net Worth of Households Aged 45-54			50
Chart 46: Life Expectancy			51
Chart 47: Retired Workers with Social Security Benefits			51
Chart 48: Monthly Benefits per Person			52
Chart 49: Major Categories of Retirees			54
Chart 50: Pre-Retirement Location of Retirement Buyers			55
Chart 51: Expanded Target Market			68
Chart 52: Design Needs of the 11 Psychographic Profiles			71
		of Retirement Home Buyers