October 2014 Newsletter

Jeff Fleming headshot 2012

Wow!  How good was Memphis?  If you missed the annual conference, you missed a fantastic time of food, fellowship and learning.  Great speakers, great topics.  Ribs at Rendezvous, the Peabody ducks, Elvis and the Rock ‘n Soul museum.

We learned about authenticity and selling a lifestyle, not just a piece of real estate.  If you sell authenticity, then you’ll attract loyal buyers who will be content with their decision.  If your selling points are embellished, then you’ll generate buyers who question their decision and share their dissatisfaction.  Some buyers like beaches, others like lakes, and others like hiking, and still others like.  Whatever you are, be the best!

We also announced our Seal of Approval award winners.  If you don’t know about the Seal of Approval, you owe it to yourself to check out the website here.

Sincerely,

Jeff Fleming Chair, The AARC



AARC Annual Conference Wrap Up – Memphis 2014

Members & Attendees – View 2014 Conference Resources for Videos and Power Point Presentations from our 2014 Speakers – Click to View

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 Retiree attraction leaders met in Memphis to set the pace for a strong 2015. Attendees learned that each retiring household brings 4, high paying, entitlement free, medical and financial services jobs. These do not demand more infrastructure like new schools or commuter roads. Chair Jeff Fleming, shared the average tax incentive cost for each smokestack industry job recruited, exceeds $150,000, often negating any financial benefit to the community for decades.

DSC_0052David Twiggs, Hot Springs Village, shared how creative, micro branding of existing infrastructure can spark revitalization in older communities to spur new growth. This helps maintain values and can yield an exit strategy for aging residents who need to sell their homes.

Harvard & AARP predicted that more than 60% of American homes will be functionally obsolete because two thirds of the population will be over 65 by 2040. Its no surprise that so many savvy planners are focused on managing the explosive retiree growth trend.

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Mississippi Seal of Approval Recipients
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Tennessee Seal of Approval Recipients

AARC Presents their 2014 Seal of Approval
Awards to recipients during the Annual Conference.

 

 

Members & Attendees – View 2014 Conference Resources for Videos and Power Point Presentations from our 2014 Speakers – Click to View



50+ Resort & Retiree Housing Sector tops 40%

By Dave Robertson,                                                                                                                                                                               Ideal Living / RPI Media

idealliving1Demand for 50+ resort & retirement housing, for the first time, in 2015 is expected to be the largest housing sector at 40%. Historically, the 50+ sector has been about 20%. Relo, first time & move up home buyer markets, averaging 80% of the market until 2012, are flat due to lackluster job creation. Simultaneously aging Baby Boomers are aggressively buying both vacation and retirement homes.

The industry, especially builders, are grappling with how to drive urgency to purchase. Unlike a young couple with a new baby in a studio apartment or the family relocating to a new city for work, who both must have a new home by a specific date, retirees’ timetables are tied to the fact that they are aging which does not present the same tight time deadline.

Creating buyer relationships, regular engagement and destination marketing are as important as securing the best locations and the construction process.  Because they can wait (and often do), buying at their own pace, maintaining contact, and utilizing traditional media like print, not just digital is essential to earn their business.


Home Sales Reach 12 Month High

Reuters                                                                                                                                                                                                    October 21, 2014

sale pending

WASHINGTON — Sales of existing homes climbed to a one-year high in September, the latest indication the housing market recovery is gradually getting back on track.

The National Association of Realtors said existing-home sales increased 2.4 percent to an annual rate of 5.17 million units, the strongest reading since September of last year.

That was above economists’ expectations for a rise to a 5.1 million unit pace and more than reversed August’s decline, which pushed down the annual rate of sales to 5.05 million units. Still, sales were 1.7 percent below those for September of last year.

“The housing recovery continues to move along sluggishly, as consumers are stuck between tight credit standards and limited wage growth,” said Sophia Kearney-Lederman, an economist at FTN Financial.

Housing activity stalled in the second half of 2013 after a run-up in mortgage rates. While it continues to be hobbled by sluggish wage growth, a recent decline in mortgage rates should help support sales.

The 30-year mortgage rate fell to an average of 3.97 percent last week from 4.12 percent in the week ended Oct. 9, according to data from the mortgage-finance giant Freddie Mac. The decline reflected a sharp drop in Treasury debt yields as traders pushed back their expected timing of the first interest rate increase by the Federal Reserve against a backdrop of troubling economic news from overseas and a sell-off in global stock markets.

While home sales picked up last month, first-time buyers, critical for a sustainable recovery, remained on the sidelines. They accounted for 29 percent of sales for a third straight month, below the 40 to 45 percent that is considered ideal by economists and real estate agents.

“We need to see more first-time buyers both willing and able to buy, without the support of excessively easy credit, if we really want to see a healthier and more sustained recovery in housing,” said Diane Swonk, chief economist at Mesirow Financial.

Investors, who had supported the market, have been withdrawing. They accounted for only 14 percent of transactions last month, down from 19 percent in September of last year.

The inventory of unsold homes on the market increased 6 percent from a year earlier, to 2.30 million. At September’s sales pace, it would take 5.3 months to clear houses from the market, down from 5.5 months in August. A six-month supply is viewed as a healthy balance between supply and demand.

With supply improving, house price gains continue to be moderate. The median home price nationwide rose 5.6 percent in September from a year earlier, to $209,700, but that increase was down from the double-digit growth seen for much of 2013.



Rethinking the Traditional Retirement Community

By Stanley Luxenberg, NY Times

stock-footage-active-retired-couple-enjoying-a-leisure-day-out-cycling-by-the-waterWhen Rikki Selby began shopping for a retirement home, the 66-year-old sought a community where she could make friends with people her own age. But Ms. Selby had no interest in the kind of sprawling Sun Belt development that offers thousands of houses to older people. “In those places, everybody is old, and you don’t see young faces in the supermarket,” said Ms. Selby, who recently retired as a financial planner.

To enjoy more diversity, Ms. Selby moved to Rancho Mission Viejo, a development near San Juan Capistrano, Calif., that caters to a variety of age groups. She purchased a single-family home in a section reserved for homeowners 55 and over. But a few blocks away are houses designed for families with children. In another nearby area, apartment projects seek to draw single 20-somethings. Everyone can mingle in common recreation areas.

The California project is one of many efforts by developers to think more creatively about housing options for a demanding generation that has begun to reach retirement age. Instead of focusing on traditional Sun Belt retirement communities, builders are seeking to lure older people who want to remain active or continue to work. Pleasing retirement-age customers is crucial for developers. At a time when many housing markets remain stagnant, projects catering to older people rank as one of the hottest fields. In 2013, there were 21,000 starts of age-restricted homes, up from 13,000 in 2012, according to the National Association of Home Builders.

retirementcoupleLike other home buyers, many older consumers postponed purchases during the financial crisis, said Steven Bomberger, president of Benchmark Builders in Wilmington, Del. But people over 55 have been among the first to return to the markets, said Mr. Bomberger, whose firm sold 42 age-restricted houses in 2013, up from 22 the year before. “Seniors can move now because they have equity in their longtime homes, and they are ready to sell and get on with their lives,” Mr. Bomberger said.

Demand for age-restricted communities will continue growing rapidly during the next decade because of demographics, said Gregg Logan, managing director of RCLCO, a real estate consulting firm in Orlando, Fla. Mr. Logan said that the number of people aged 60 to 75 would increase to 56 million in 2025, from 46 million now. People in their late 60s are particularly likely to buy a home in an age-restricted community.

While many older residents prefer restricted neighborhoods for privacy and quiet, developers have been forced to offer features that are suitable for increasingly active customers who want more variety. “Today people do not want a geezer ghetto,” said Margaret Wylde, president of ProMatura Group, a market research firm in Oxford, Miss., that specializes in older consumers. “Buyers want an active environment with walking trails and easy access to amenities outside the community.”

Del Webb, a construction company, has long been a leader in developing new forms of retirement communities. In 1960, the company opened Sun City near Phoenix, which offered an 850-square-foot home for $8,500. The company’s founder, Del E. Webb, sought to build an entire community for retirees that would provide shopping along with shuffleboard. The project was a smashing success. According to the company, 100,000 visitors toured the development on its opening weekend, and the project sold 1,300 homes the first year. Sun City eventually grew to 46,000 residents.

Over the years, Del Webb — which is now a unit of PulteGroup — built a series of Sun Belt retirement communities, constantly adding features, including indoor walking tracks and the latest exercise equipment. But by the late 1990s, the developer began to notice that many customers preferred retiring within driving distance of their hometowns where they could see relatives or enjoy cultural opportunities. As a result, developers began building communities outside the Sun Belt. In recent years, Del Webb has built age-restricted projects near Chicago, Detroit, Cleveland and Boston. “Our residents want to be close to their doctors and family members,” said Valerie Dolenga, a Del Webb spokeswoman “About 50 percent continue to work at least part time.”

Roger Waller, 57, recently sold his 4,000-square-foot home to move to a nearby 1,670-square-foot condo in Potomac Green, a Del Webb project in Ashburn, Va., about 30 miles from Washington. Condo prices in the development range from about $189,000 to more than $356,000. Mr. Waller, a dispatcher for the Arlington County 911 system, plans to stay in his apartment when he retires. He pays about $300 a month to the development’s homeowners association, which takes care of lawn mowing and other maintenance. “When I owned a house, I did yard work and remodeling,” Mr. Waller said. “Now I will be able to retire and not worry about chores.”

Mr. Bomberger said that about half the residents in Benchmark’s Delaware communities work. Some commute to Wilmington or Philadelphia. Others left longtime jobs and now work from home as consultants. To serve them, Benchmark installs home offices in many of its projects. “We see bankers and Dupont engineers who decide to open their own shops,” Mr. Bomberger said.

When Donna Shenk, 66, retired from her job teaching elementary school, she wanted to downsize and remain near State College, Pa. She and her husband, Roger, a 68-year-old retired engineering manager, decided to buy a home in Traditions of America at Liberty Hill, a local age-restricted community where houses are typically priced from $290,000 to $349,000. The Shenks soon decided that what they liked most about the development was the social life. Residents organize parties and exercise classes at the community’s clubhouse. Groups play tennis and form clubs. The Shenks have taken classes with their neighbors at the nearby campus of Penn State. “We are a group of empty nesters, and we do lots of things together,” Ms. Shenk said.

The multigenerational community of Rancho Mission Viejo in California is designed to offer a range of outdoor activities. Older residents can choose to swim laps at a pool that is limited to ages 55 and over. They can also take grandchildren to a nearby pool that is open to people of all ages. Hiking trails go through the community and run over nearby mountains, and beaches a few miles away draw surfers of all ages. Residents use the Internet to organize activities, inviting neighbors to poker games or camping trips. Homes are priced from around $500,000 to more than $1 million. The developers hope to attract extended families. Recently a couple bought a house in an age-restricted section, while their daughter moved nearby to a street that is open to people of all ages.

Even when projects cater to active adults, some developers offer features that are designed for an aging population. Many houses have only one floor so residents will not have to climb steps. In two-story houses, the master bedrooms are on the first floor.

Odette Haight, 67, is still working part time as an office administrator, and she can run up stairs. But she opted for a master bedroom on the first floor when she decided to buy a home at the Village of Long Creek near Newark, Del. Her grandchildren can use a loft bedroom on the second floor. “If I want to spend the rest of my life in the house, then I need to think ahead,” she said.

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