Archive: February 2008
A recent study by the National Association of Home Builder's Paul Emrath finds that 55+ households now account for 20.9 percent of the new homes purchased in the United States. Emrath announced the findings at the recent International Builder's Show in Orlando. As the Baby Boomer population ages, the topic of active adult and retirement communities has become a major topic among builders. Part of the weeklong conference in Orlando was devoted to gaining further insight and understanding of this growing market segment. The conference featured talks from other major executives of various active adult community builders.
In a surprising twist to the battered stock market of 2008, an unlikely star has risen. Through the middle of February, shares of the S&P Homebuilders Sector Spider (XHB)(the fund that tracks publicly traded companies in the residential construction business), have already risen 7 percent this year. The gain comes as a surprise to many given the state of the housing industry along with the 7 percent decline in the S&P 500 this year.
It is a question every retiring Baby Boomer asks them self at some point. For many, the lure of retirement means escaping crowded urban living and finding a quiet place in the country or in the South. A small, but growing number of retirees are bucking that trend and moving into urban areas. The vast majority of retirees seem to settle somewhere in between. They look for a place that offers the conveniences of a city in a quieter, less-crowded active retirement community in suburban areas. A recent article at Fox Business highlights some pros and cons of each retirement lifestyle decision.
Jim and Carol Erikson chuckle at the idea of being 63-year-old fullbacks. No, they are not football players. Rather, they are part of an ever-increasing retiree trend. Fullbacks is the term used to describe people that head south or fully across the country after retirement in the hope of finding their retirement Eden, only to realize that there is no place like home and eventually move back. The people who move all the way across the country to retire, and later move halfway back are considered "halfbacks."
In an effort to calm worried buyers and generate sales, some new home builders have resorted to offering price guarantees on homes. Many buyers are reluctant to buy a new home for fear that declining prices will leave them with a home that has decreased in price between the time they contract to have the home built and the actual closing of the property. Some builders have set up new agreements that allow buyers to purchase a home with the understanding that if prices are further reduced prior to closing, they will also receive the discount. Though the deal does not extend beyond the date of closing, it gives buyers the peace of mind that they will not have to close on a home that is worth less than when they contracted to build it.
I spend countless hours every day doing research on active retirement communities around the country. In every community that I visit and every salesperson that I talk to, I always ask the same thing, "What is it that makes your community unique that no other retirement community around can offer?" Without fail, 99 percent of the time the response I hear is, "It's the lifestyle. We offer the best lifestyle of any retirement community in the area." First off, there can only be one "best" lifestyle community in the area. But what is more disturbing is that most salespeople will tell you their active retirement community offers the best lifestyle without even taking the time to understand what is most important to YOU.
Erickson Retirement Communities recently launched Erickson Moving and Realty Services. Erickson hopes that the addition will allow more people to move to their communities by helping them sell their current homes. "We are putting the pieces in place to help them attain the retirement lifestyle that they want without having to worry about finances and moving logistics," said Erickson's Senior Vice President of Sales, Tom Neubauer.
Like all shoppers, homebuyers are no different - they want a good deal. But since the home-buying process happens very infrequently for most buyers, many people are not trained on how to find the best deal when it comes to purchasing a new home. Furthermore, moving to an active retirement community and buying from a developer is probably an entirely new experience for most. Often, developers will tell you that prices are the same regardless of when you buy. But as the former sales manager for one of Del Webb's largest developments, I can tell you that is not always the case. So here is a list of tips and tricks about how and when to get the best deal when purchasing at an active retirement community:
The International Council on Active Aging (ICAA) released a report last month with predictions on eight new trends for active aging Baby Boomers in 2008. Active aging, according to Colin Milner, the CEO of the ICAA, means, "staying involved in life, and the Boomers are planning to do that. This age group is ready to take action to stay healthy and actively engaged with their friends, families and communities." Here are their predictions for 2008.
In a move that is likely to please several dozen home buyers, the South Florida bankruptcy court has ordered Levitt & Sons home builders to complete many of the homes and unfinished amenities in their Florida, Georgia and South Carolina active adult retirement communities. Levitt & Sons filed for bankruptcy back in November after listing assets of just under $1 million and debt of over $100 million. The move left many home buyers wondering what would happen with their contracts and deposit money. Recently, Wachovia Bank authorized $10 million to the company to help complete some of the homes that were already under construction.