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Experts say now is the time to move to a senior community

Demand will soon outstrip current housing supply

Created date

April 27th, 2009

' Anyone considering a move to a retirement community in the next few years needs to pay close attention, says Michael Hargrave, the vice president of the National Investment Center for Senior Housing. Hargrave, who is in charge of research for the organization, says that now may be the perfect time to move to a 65-plus community before a looming inventory shortage could leave millions scrambling for housing alternatives. "My advice for anyone considering moving to one of these communities in the next few years is to start looking right now," he says. "Now is the time to find a deal. You are much more likely to get flexibility on financing, discounts, and a willingness by companies to negotiate.

Fast Fact: The U.S. Census Bureau estimates that 7,918 people turn 60 every day. That amounts to 330 people each hour.

"With the coming shortage, if you wait a year or two to move, inventory selection will be slim, prices could go up, and you could be at a serious disadvantage," he adds. Looming shortage According to the U.S. Census Bureau, there are more than 37.9 million Americans currently eligible to move into these communities. "With this industry, because of simple demographics there is a natural excess of demand, so even in tough times the industry does well," Hargrave says. But he also points out that a recent credit crunch has slowed construction for just about every company in the industry, which could spell trouble for the consumer. "No one s really building right now," Hargrave says. "New construction is down 90% to 95%. When you play that out with the current demand, it s a recipe for under-supply." Jill Gilbert, president of Gilbert Guides, a San Francisco-based publisher of guidebooks on a variety of senior topics, says interest in retirement community campuses remains huge among those age 62 or better, and the variety of amenities offered at communities helps to drive sales. "The desire [to move] hasn t diminished one bit," she says. "Many people are drawn to the security, convenience, health benefits, and social life that these communities provide." Strike while the iron is hot "Now is the time to go shopping," Hargrave says. "There is a little excess inventory now but that might not be around next year." Jim Kelly, vice president of sales for Erickson Retirement Communities, a company that builds and operates communities throughout the nation, says that demand never seems to go away. "We have a huge list of people who want to move to our communities, and we ve really just been waiting for them to sell their homes and move in," he says. "Now with the real estate market on the upswing and having recently introduced a number of incentives and offers to make moving easier, our sales have picked up significantly." Kelly estimates that at the current reservation rate, some of Erickson s communities could be sold out by October. "If you want to move in the next few years, your best bet is to get in now or you may face an even longer wait because, even when the credit markets unthaw, it could take a couple of years before new inventory is built and ready."

Real estate market looking up

For the first time in months, the real estate market showed positive trends and growing buyer confidence. According to the National Association of Realtors (NAR), with mortgage rates at historic lows and the economic stimulus incentives in place, more first-time buyers have entered the market looking for reasonably priced homes. According to the NAR s most recent report, existing home sales in February jumped 5.1% from the previous month. "The number of buyers looking for homes rose 5% in February and also was 5% above a year ago," says NAR President Charles McMillan, a broker with Coldwell Banker Residential. It appears most of the increase in buyer traffic occurred after the $8,000 first-time buyer tax credit was put in place. "At the same time, mortgage purchase applications have risen, so we expect to see sales picking up," he adds. ' '