Adult Communities Beg for Buyers

The moribund housing market, collapsed stock prices and a reeling economy have produced yet more fallout: stranded seniors unable to move into the retirement home of their dreams -- and lots of others who wish they hadn't.

"It's a disaster across multiple dimensions," says John Rother, executive vice-president for policy and strategy at AARP. "People who can't sell their home can't move into more-appropriate housing. And people whose portfolios have fallen in value, or who have lost their jobs prematurely, don't have the money to move."

Meanwhile, some folks who bought into amenity-rich active-adult communities are finding that their unfinished developments bear little resemblance to the Shangri-La they were promised. No one tracks the number of stalled projects, but "it's big," says Joanne Theunissen, chairwoman of the National Association of Home Builders' 50+ Housing Council. "I've never heard so many builders talking about possibly going out of business."

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On the flip side, now is a good time to be in the market for adult housing. You may get help selling your home or swinging the new one. You (or your parents or grandparents) may wind up with a great deal.

Del Webb, a unit of Pulte Homes known for its Sun City developments, is adding "affordable" units in California and other strapped markets. In other communities, bridge loans, which finance a new mortgage until the old place sells, are back in fashion, as are rent-to-own deals. Starting this year, seniors 62 and older can use a reverse mortgage to purchase a home.

If you already live in an active-adult development that's struggling, it behooves you to help attract others to move to the community. Some developers are paying residents for referrals, typically with goodies such as a new TV or a golf cart.

Demand for housing in continuing-care communities -- where residents can live independently until they need care later -- or in assisted-living facilities depends more on the health of the purchaser than on the economy. Still, occupancy rates are down and administrators are going all out to help seniors sell the family home so that they can afford to move. Such assistance is crucial in the campus-like continuing-care setting, where deposits are often tied to median home prices, mounting to hundreds of thousands of dollars.

Erickson Retirement Communities, with 22 continuing-care developments nationwide, established a service to help seniors stage their homes for sale, cutting average sales times by 26%. Ginger Cove, in Annapolis, Md., will rebate $3,500 in moving expenses, and it gives buyers of two-bedroom units $10,000 toward monthly fees or apartment upgrades. Emeritus Corp., which runs 302 assisted-living centers, will waive its move-in fee of one-month's rent, or $3,500 on average.

There's no need to panic that some operators are facing hard times. Accredited facilities must withstand a rigorous review, and state licensing affords some protections. Other stakeholders in a property have an interest in maintaining smooth operations. Most struggling facilities are acquired without any interruption in care.