What the Experts Think Lies Ahead for Your Retirement: Report from the American Association of Retirement Communities (AARC):Retirement Real Estate
November 11, 2011 – Here in Biloxi at the “Back from the Brink: Building Bridges to New Horizons” conference put on by the AARC, the mood is resilient, if not overly optimistic. Attendees at the conference were primarily developers of retirement communities and marketers from states/municipalities promoting their regions as retirement destinations. It has been a hard ride for these folks since the real estate market started its downhill ride in 2007. Construction in active communities has virtually stopped as short sales and foreclosed properties have made new properties uncompetitive. Half-finished communities have languished, gone into bankruptcy, or been sold to deeper pockets. Where once prospective buyers lined up to bid on condos sight unseen, now consumers are frozen. But the members of this Association continue to soldier on, believing that one of these days the news will get cheerier (see 2012 projections for 2012 later in this article).
What This Means for Prospective Retirees
The implications for baby boomers thinking about purchasing a home for their retirement are muddled. For one thing, the market is terrible now, and this might not change for a long time. However, millions of baby boomers will retire, someday. When it happens, and if it happens with the speed and power many predict, it will be interesting.
Here is our thinking about how to handle this muddle, assuming that you plan to retire soon and want to purchase a new home to do that:
– Keep researching the best places to retire on paper and on the Internet – but make sure you have your retirement priorities straight first
-Now is the time to be traveling to build up your knowledge of the best towns and communities for your retirement lifestyle.
– Take advantage of “Stay and Play” packages to learn more
– If you are retired, rent somewhere for either the season or part of the season. Rentals can be hard to find, but sites like VRBO.com, word of mouth, and the classifieds on the largest active community websites can be a resource.
– Rent or take an extended stay in as many different communities as you can, so you can gain even more experience. While you are staying in these communities, do your research about what it is like to live there, as well as its financial condition.
– If after your careful research you find a property that meets all of your criteria, is available at a good price, and it still checks out after all of your due diligence – think about making an offer. You run the risk of pulling the trigger too early, but on the other hand you might land a prime property that you might not otherwise be able to snag.
Top trends that emerged in this year’s AARC conference.
– Some communities have been hit harder by the real estate crash than others. Parts around Atlanta, for example, are referred to as the “Ring of Death” due to the unfinished and failed developments that abound there. Yet other areas are relatively stable.
– 19% of the U.S. population will be 65+ by 2030. If even a fraction of that total moves in retirement, that is a lot of people who might be moving.
– Communities looking to attract retirees should think of themselves as destinations. As Jack Moody said, the expression goes – “Pretty places sell, Ugly don’t”.
– Developers don’t have the money to build the huge and expensive amenities that were a feature of active communities built during the first decade of the millennium. Instead, Berkeley Young, a consultant that helps municipalities attract new residents, believes that the cities and towns are going to have do that for them.
– Communities have to be careful about building large amenities such as conference centers without studying traffic patterns such as local hotel occupancy rates. As Young states, if you build it they might not come.
– According to Jeff Fleming of the City of Kingsport, TN, retirees are looking for many things in a community – jobs, transportation, something to do, healthcare, tech infrastructure, recreation, retail, safety, intellectual stimulation, and a welcoming community.
– People retire to good places to visit
– At least one speaker, Berkeley Young, believes that the turnaround, when it comes, could arrive fast. He says developers need to be ready to cash in on the long-delayed build up demand.
Projections for 2012
Elsewhere, the chief economist for the National Association of Realtors predicts that existing home sales will increase 4% to 5% next year. New home sales, which are projected to be at an all time low this year at 320,000, are projected to rise 23% in 2012, mainly thanks to stabilizing inventories.
Note: Your Topretirements.com Editor was honored to be a guest speaker at this year’s Conference. What to you think lies ahead in the market for retirement communities? Please share your opinions below in the Comments section.
For further reference:
Top 2011 Active Adult Community Trends
2011 Retirement Trends You Should Be Thinking About