[April 2017] Thanks to retiring baby boomers, the RV market is better than ever. In 2016, the industry experienced its highest number of total annual shipments in 40 years, according to the Recreational Vehicle Industry Association (RVIA). Currently, there are about 9 million RVs on the road in the US, and an estimated 8% to 9% of all US households now own an RV.
This is a good signal for health of the American consumer, given the most important factor in determining the demand for recreational vehicles is real per capita net worth, according to Wells Fargo senior economist Eugenio J. Alemán.
“As Baby Boomers continue to retire en masse, the demand for RVs is expected to continue to increase, especially if real per capita net worth continues to improve and the prices of homes, which seem to be helping households buy RVs since the end of the Great Recession, continue to appreciate,” Alemán writes.
Hot opportunity for real estate developers
Real estate developers and homebuilders are catering to the needs of RV owners. In hot retirement markets across states like Nevada, Arizona and Florida, developers are seizing the opportunity to accommodate the increasingly mainstream audience of RV aficionados.
Take, for example, Valencia Lakes, a Tampa community for “active adults” where at least 80% of the community must be over the age of 55. The community, developed by GL homes, has built a 48-space parking lot on its property to cater to RV owners.
Marisa Lufkin, a project manager for Valencia Lakes, said her team revisited its original building masterplan after recognizing a close competitor offered communal storage for boats and RVs. Instead of building two recreational centers, as it had originally planned, GL Homes used the second, smaller space to develop a softball field, a veterans’ circle of honor and an RV parking lot. There are only 48 spaces for roughly 1,631 homes and there’s currently a waiting list to reserve a space, which leases for $65 per month.
Lufkin says members of Valencia Lakes originally hail from all parts of the US and are seeking a mobile lifestyle. “Our residents are choosing to be on the road a couple months out of the year but aren’t sacrificing having a home,” she said.
Heritage at Cadence, an adult community in Henderson, Nevada, offers homes that include an RV garage, which is at least 15% bigger than the standard. There is about a $25,000 premium for a home with an RV garage plan.
Baby boomers are retiring
If few people need RVs, then why are so many people suddenly buying them? One possible explanation for increased appetite in owning an RV is the changing way people are retiring, according to Pete Reeb, principal at California-based John Burns Real Estate Consulting.
“With the rise of house and apartment rental websites like Airbnb and VRBO, suddenly baby boomers have access to way more vacation properties than you’ve ever had in the past. Instead of buying a second home somewhere and being locked in, you have the option of being mobile,” he says.
With the discretionary income that might have been used to save up for a second home, retirees may be opting for RVs instead.
The demand for RVs is expected to continue to increase as real per capita net worth improves and the prices of homes keeps appreciating.
Read the entire article at Yahoo Finance.