When iconic and overextended post-World War II homebuilder Levitt & Sons filed for bankruptcy in 2007 after the bubble burst, unfinished projects were left in the dust.
One of them was the Seasons, a 1,200-home development for active adults in Port St. Lucie, Fla. When construction was halted, only 180 homes had been finished.
Now the community is moving forward again under a new owner, AV Homes (AVHI), and a new name, Vitalia at Tradition.
"We think it's the right time," said Ken Plonski, a senior vice president at AV Homes.
At Vitalia's grand opening last month, about 1,000 visitors showed up to check out the place, proof that the market "is primed for the active adult," Plonski said.
As the housing market starts to recover, builders are dusting off stalled plans and launching new projects for the so-called "active adult" cohort, viewed as those 55 and older. Builders' eyes are fixed on the 78 million baby boomers born between 1946 and 1964. Many have started to retire or are making plans to do so.
In the last month alone, PulteGroup (PHM), the largest builder of active adult communities through its Del Webb brand, broke ground on a 1,275-home community in Durham, N.C., and also announced plans to build a new adult project in Tucson, Ariz.
Del Webb sales started rebounding last year, with signed contracts in 2012 up 19% over 2011, to 4,922 homes. That was after virtually no growth in 2010 and 2011.
High-End Builder Jumps In In early March, luxury builder Toll Bros. (TOL) said it would launch its first active-adult community in the West, at Anthem Ranch near Denver.
The project was started by Del Webb, which built more than 800 homes there before parent Pulte sold remaining land to Wheelock Street Capital and partner Oread Capital in December 2011.
"Well-located land is rising (in value) fairly quickly because demand by builders is finally back," said Oread Capital's president, Jeff Handlin. "Those that made it through the downturn are in growth mode.
Rising land costs aren't yet a road block, he says. "Most of the builders we deal with are nationally traded and have access to immense amounts of capital in the public debt and equity markets.
AV Homes, which lost money the last few years, has restructured to focus more on active-adult housing. It recently hired a new CEO, Roger Cregg, former chief financial officer at Pulte.
Toll's move into Colorado with nearly 400 acquired lots is the start of its active-adult push into the West and South. Its current active-adult communities are in the Northeast, Mid-Atlantic and Midwest.
"Given our focus on the baby boom generation and move-up housing, it is a natural extension to follow that generation to its next stage of life in the luxury segment," said Kira Sterling, chief marketing officer at Toll.
While demographics play into the cards, so does timing. As existing-home prices rise, many would-be older buyers who had held off selling their homes until the market improved are now feeling more eager to proceed, observers say.
Sale prices for existing homes rose 11.6% in February from a year ago to a median $173,600, the National Association of Realtors said Thursday. It was the strongest gain since November 2005.
Homeowners 62 and older have more equity in their homes now than at any time since mid-2009, according to data this week from the National Reverse Mortgage Lenders Association (see chart).
The group said that the home equity accumulated by these owners rose by $117 billion, or 3.8%, over the last year while their home values grew by $97 billion, or 2.3%.
"Active-adult buyers are very patient buyers," said John Burns, chief executive of John Burns Real Estate Consulting. "Now that prices have started to rise they fear they may have missed the bottom, so we're seeing a surge in active-adult home buying.
Central Florida's immense retirement community, The Villages, is still going strong after 30 years — and with resale prices heading upward from the bust — 2,800 new homes were sold last year by the private developer.
Demographics Are The Draw Other builders active in the older-adult market are New Jersey-based Hovnanian (HOV), with its Four Seasons brand, Arizona-based Meritage Homes (MTH) and privately held Shea Homes and Robson Resort Communities.
"New construction is very strong in active-adult communities in Florida, Arizona and the Carolinas," said Brad Hunter, chief economist with research firm MetroStudy.
"Obviously it's the demographics as more people reach their 60s. But shorter term it's the economy, consumer confidence and the stock market that plays into it," he said. "Retirees are feeling flush again. They're confident that prices are moving up instead of down. They'd rather buy into a rising market.
As active as the adult market is, active-adult housing makes up a relatively small slice of the overall housing market. Of the more than 20% of new-home buyers 55 and older, less than 5% choose communities targeted to adults 55 and older, according to the National Association of Home Builders.
Many active-adult communities are no longer "age restricted" as they were in the past, but "age targeted" to 55 and older adults in marketing campaigns, Hunter says.
"Modern retirees are more open to living in a mixed community," he said.
Newer retirees prefer new construction with grand entrances and smart interior finishes and architectural details, Hunter says.
Even so, today's buyers aren't looking for the palatial, over-the-top features and square footage more common during the housing bull market of 2000 to 2005, he adds.
"The trend today is something a little more affordable but nicer than in the 1970s and 1980s," Hunter said.
Prices of Vitalia homes in Port St. Lucie run from $160,000 to $250,000. Even Toll's homes at Anthem Ranch are in the $300,000s to mid-$400,000s, relatively moderate for luxury product.
Must-haves in the active-adult market are plenty of trails and paths for walking and bicycling and a clubhouse and recreational center for social activities, working out and taking classes.
Anthem Ranch has 48 miles of trails, a 90-acre park, a huge lodge and 75 special-interest clubs.
Also key: being close to jobs and cultural events because many buyers still work at least part-time and don't relish playing golf all day.
"Some of the active adult communities that struggled during the downturn were located in the middle of nowhere, away from airports, shopping, dining and cultural activities," said Handlin of Oread Capital. "We don't subscribe to that. We believe location matters."