Are We Overbuilding Senior Housing?

This article in the Wall Street Journal (GO HERE) got me thinking about a number of things senior related. While housing is the most important – where, how much, equity, etc. – a number of other issues also come into mind, such as health, mobility, travel, and family. The focus on the WSJ article was on the businesses building housing for the older and more challenged seniors – most of whom are NOT baby boomers.

Senior assisted living properties coming on to the market today serve residents that are at least 75 years old and older. The first Boomers are now 69ish and even though maybe 10,000 of us do turn 65 each day is the magic number is age 66. I know there’s Medicare but it’s the SS check that really counts. And THAT is the problem: managing assets, health, properties, time, bucket lists, and family. So the issue of senior assisted living for most Boomers is irrelevant – and too soon. Now the businesses that are building these facilities need to be careful, true; but they will be ready (and if they survive) for the real press and need in about fifteen years.

The issue that I see confronting most of us in the over 65 crowd (and those soon to join us) is time, health, and equity. There are hundreds of experts out there willing to share their opinions on how to stretch your savings until your last breath—pleasant thought, eh? Nevertheless, it’s true, many of us have been successful in life, done right by ourselves and for their families and want, while still healthy, to climb to the top of the Duomo in Florence, see Antarctica, do a photo shoot in Africa or Alaska. And most want to see their grandkids get married – something that today is a far greater chance than ever. We are healthier, richer, and often, wiser.

The senior housing (assisted, resort, second home) market is incredibly diverse. By far the majority of Boomers will age in place. Their home is literally their castle. They will stay until they can’t or won’t take care of it. That will be a wrenching moment, we have all been there, or will be, with our own parents when they/we are forced to find other housing. The difficulty of planning for that day is hard. Too many variables, too much emotion, and too much history. But we get through it and more often than not, end up better in the end.

The most critical issue is the equity in our properties—how do you cash it out and use it to live. Sure Social Security is there, but hardly enough to travel on and maintain the life you’ve grown accustomed to. So we look to our savings (equities, bonds, and assets) and how to meter their returns and their decline. Should we sell the home? And when? Should we reverse mortgage (and how do you really do that?)? What are our renting options? And where? Too many options—and so much time.

Stay tuned . . . . . . .

Noodling October – A Week Late

Way too much going on, Giants in the World Series and the parade, the sad disaster of the New York and New Jersey region we had just visited less than two weeks ago, the election (and all that is holds for the future), and a new book of mine on the cusp of release. As I said, way, way, too much.

But in the tradition of the last year I do have a few Noodlings to throw out, so let’s see what we can catch.

California’s High-Speed Rail:

Tuesday’s California election will be just not a referendum on the state’s economic future but the probable future of the ill-advised high-speed rail system. While all the polls show slacking, if not lack luster support, for the tax increase measures on the ballot for the “schools,” the citizens seem to know better. More money means more spending, and eventually we will do it again. Californians may now just say stop. This may be the only way to force a smaller government, one that supports growth and expansion of the private sector - not the government. We will see. But one casualty, I believe, will be the high-speed rail system – its scope will be severely reduced. Another Opinion

Home Prices Increase

In the pre-Sandy world, home prices rose in more than 20 cities across the country. In the post-Sandy residential environment, it remains to be seen what the total impact may be. Obviously the region directly impacted and damaged was relatively small, but may have left a rippling effect. Such are things in the New York region; when Wall Street coughs, everyone’s temperature rises. But here are a couple of articles that point out the various regions and potential impacts:

Home prices in 20 cities increase by the most in two years.

S&P/Case-Shiller Home Price Indices

Storm Sandy could have affect on housing market

Jimmy Buffett Reflects Our Own Changes

Senior Living

If there is one demographic that will continue expanding with new members it is the over 65 crowd, everyday thousands join the party. Decisions then need to be made: retirement, housing, grandchildren issues, health issues, and even travel. It’s the days of wine and roses, hopefully, and that hip doesn’t give out. Seniors are still relocating (Check Here), and they are trying to find affordable housing (The "should have saved more," lament), (HERE).  

 

We are in for a massive adjustment in housing over the next ten years, with seniors relocating their primary residence, with their demands for better medical treatment, and with their significant saving backing up their demands, some very interesting things will happen. Congregate care facilities will grow, assisted living facilities will expand, and continued growth in middle to high-end vacation areas. And Jimmy Buffet’s restaurants will expand under the banner of nostalgia (already seen in casinos near you), I can’t wait for the Rolling Stone’s Enhanced Mobility Tour.

Coming to an Area Near You!

Stay Tuned . . . . .