Condo Market Roiling Under Bad News Assault

August 28 — If you have been thinking about buying a retirement condo a recent news item in the Wall Street Journal might give you some pause. It seems that the condo market is now experiencing troubles as speculators default on their mortgages or fail to execute their purchase contracts. As banks and developers are forced to unload properties in a distressed market prices are falling, causing underwriters to lower appraisals and make loans harder to get. Feeding the fire is a rapid growth in newly built units – construction of new condos increased 145% in 2006, the highest level since 1985. It appears that new condo projects and condo/hotel conversions are the properties experiencing the most difficulty. Obviously most of these properties are not being built as retirement condos or in retirement communities – but the bad news in general markets is not without an effect on the active adult retirement market either.

Just a few years ago speculators in hot markets like Miami, California, and Washington, D.C. were lining up for the right to purchase an apartment in the future. Many bought more than one in the hope of flipping them for a big profit. Others took out adjustable mortgages with artificially low interest rates. Now, just as the bottom is falling out of the market these loans are coming due at either un-affordable rates, or unavailable at any price.

The result are defaults and pain -and not just for individual buyers and their banks. The builders of some of these condominium projects are defaulting on their loans too. Typically when a new project is built the construction loans must be paid off. But if too many buyers back out of their contracts the developer is put into a squeeze, forcing the entire building into foreclosure. That in turn causes major problems for the apartment owners who did honor their purchase commitments.

A related New York Times article (August 25) highlighted the case of a luxury Miami condo conversion that appears to be entering foreclosure – the Savoy Hotel on Miami Ocean Drive. The project was selling apartments at prices from $700,000 to $7 million. Meanwhile the National Association of Realtors announced yesterday that the total inventory of homes at the end of June climbed to a 9.6 months supply – more bad news for the distressed housing market.

Cooperatives Help Aging at Home Movement Grow

August 25 – More than 9 out of 10 people over 65 would prefer to stay in their own homes as they grow older, according to a survey by the AARP. The desire to live where they feel comfortable amidst familiar surroundings is powerful and understandable. Unfortunately, as medical needs increase and life skills like driving decline, it often becomes more and more difficult to continue living independently. Aging adults face more than their own frailties as well, because their adult children often pressure them to move to a retirement community or Continuing Care Retirement Center (CCRC).

More and more people, according to a recent New York Times article, are starting to (more…)

10 Most Popular Retirement Towns Announced

Madison CT — August 15 — Topretirements has been curious to see which towns and cities its visitors are most interested in learning more about. The results offer significant insight into what active adults think are the best towns to retire to. The top profile is generally: small town or city, Sunbelt location, vital downtown, usually with a college or university in town.

Asheville North Carolina Scenery

Here are the top 10 most popular retirement towns as tallied by Topretirements.com:

1. Asheville, NC
2. Paris, TN
3. Old Saybrook, CT
4. Oxford, OH
5. Sarasota, FL
6. Halifax, Nova Scotia
7. Prescott, AZ
8. Green Valley, AZ
9. Athens, GA
10. Winston-Salem, NC

North Carolina and Arizona each had 2 towns in the Top 10. The only 2 communities not in the Sunbelt were Old Saybrook, CT and Halifax, Nova Scotia (Canada). Arizona is the only state west of the Mississippi to be represented on the current list. Visits were tallied between January 1 and August 1, 2007.

To a certain extent this survey is more about people’s pre-conceptions about where they would like to retire than where they actually might put down their roots. Certain towns and cities (like Paris, TN or Athens, GA) have good word of mouth about their retirement desirability. While other towns are probably just as attractive because of their amenities, cost of living, and climate (e.g.; Leesville, LA or Las Cruces, NM) – without a strong marketing buzz they have to fight harder to get a share of the lucrative retirement market.

Links:
Topretirements news about the best active adult retirement communities
100 Best Places to Retire
Certified Retirement Communities
CNN Money Magazine Best Places to Retire

At Last – A List of Certified Retirement Communities

Updated June, 2012 — So far 7 U.S. states have embarked on programs to identify certified retirement communities as part of their economic development plans. This article will provide a list of the certified retirement communities in those states.These states are all in the south – Mississippi, Louisiana, North Carolina, Texas, Kentucky, Tennessee, and West Virginia. In total over 85 communities have been certified (in West Virginia they are called “designated”, in Tennessee the communities are selected (more…)

Cash Rules – Active Adult Community Buyers Paying Cash Dominate

August 7 — For most people hoping to buy a home these days the “bad news that’s really good news” just got worse. What we mean by that is that the reeling real estate market, which is experiencing lower prices and increased inventories favorable for buyers, is also now under a credit siege. Dozens of mortgage companies have gone out of business so far and the market for even the highest quality mortgages is slowing to a standstill. There might be plenty of homes for sale, but if you need a mortgage you either might have trouble getting it, or you might have to pay more for your loan.

Enter the buyer of a retirement community or active adult development who is over 50. Many of these folks are well armed with cash as they get ready to retire. Because they don’t need to be credit qualified, they are being highly welcomed as home buyers. It’s been a bad real estate market for sellers lately, just got tighter for borrowing buyers, but things haven’t been this rosy for cash buyers in a long time. No one can say when the best time to buy a retirement home will be, but we can say this with some certainty – there is more inventory and lower prices right now than any time in the last two years.

The problem with the credit markets is now not just confined to the home financing sector. The New York Times today reported on the “virtual seizing of nearly the entire spectrum of the credit markets – from mortgage-related securities to high-yield bonds and even European corporate debt”.

Links:
Should You Purchase Your Retirement Home at Auction?
Types of Retirement Communities

Seriously – Nintendo is Latest Rage in Retirement Communities

August 3, 2007 – It couldn’t be more ironic for those of us in the baby boomer generation that spent the last 20 years berating our kids to “get off the darn game console and go play outside” (like we used to!). Our kids might smirk to learn that Nintendo’s latest marketing coup is paying off – selling its new Wii games to baby boomers and retirement communities. A frequent marketing venue: AARP conventions!

By way of background we had better explain Wii. It is basically a device from Nintendo that you wear that allows a virtual experience on your TV – without the equipment and place to play it. So you can bowl a perfect game without a bowling alley, smash Tiger Woods-type 300 yard drives without a course – do just about anything. You also don’t have to have the strength that is traditionally required for these games. All you need is to be able to simulate the motion and you can experience the “thrill of victory and the agony of defeat”. Advocates are claiming that the activity, while not as physically as challenging as the real thing, does have health and conditioning benefits.

Nintendo is actively marketing one game in particular to older people, a target that is obviously concerned with hanging on to their existing brain power. Big Brain Academy: Wii Degree is designed to give players’ brains exercise in games of knowledge, recognition, and memory. Several players can play and compete each other. George Harrison, Nintendo of America’s senior VP says that “With Big Brain Academy: Wii Degree, users can come together socially while challenging themselves mentally”.

So if you have been checking out a retirement community, add one more amenity to investigate!

Links:
Official Nintendo site http://wii.nintendo.com/
Wikipedia entry on Wii
Chicago Tribune article on bowling in retirement community
Help, my husband is retiring
More helpful articles about retirement