December 2015 Newsletter

December 2015 Newsletter

Jeff Fleming headshot 2012

My time as chair of the AARC has come to an end.  When I first became involved with AARC, I was in my 40s and thought all retirees were octogenarians.  My perception of ‘retirement communities’ usually meant a master-planned, gated development surrounding a golf course and other private amenities.  Today’s boomer retirees are looking for something different.  They’re often attracted to small, affordable cities with a vibrant downtown. They enjoy loft-living, unique retail/restaurants, biking/walking, swimming, and an active lifestyle.  Sounds like many of our communities.

Now, I realize that retirees are people like me – in their 50s and 60s who want to be part of a greater community.  They want the same basic things we all want – to be able to relax with others, to be intellectually stimulated, to tap into their lifetime of accrued talents, to make a meaningful contribution, and to feel fulfilled.  For the first time, the two largest generations (boomer retirees and millennials) are looking for similar traits in a community.  We have an opportunity to capitalize on these trends for the next 20 years.  It’s gratifying to look back and see places like Charleston, Kingsport, Beaufort and Wilmington 20 years ago and look at them today.

I’m optimistic for a future that is inclusive of all generations. Thank you for the opportunity to serve.

Sincerely,

Jeff Fleming Chair, The AARC



The Five Real Estate Trends that will Shape 2016

Jonathan Smoke/REALTOR.com – December 16, 2015

It’s almost the new year. Get ready to break out the Cristal: We had a great 2015—the best year for housing since 2007. And our forecast here at REALTOR.com projects an even better year in 2016.

real-estate-2013-trends-to-watch-home-prices-inventoryHow so? Well, with economic growth chugging along, employment will continue to increase, meaning that people will have more money coming in and they’ll be able to buy their first home or upgrade to a new one.

Here’s a closer look at the trends that will have the greatest impact on the housing market in 2016.

1. We’ll return to normal (Anyone remember normal?)

The year ahead will see healthy growth in home sales and prices, but at a slower pace than in 2015. This slowdown is not an indication of a problem—it’s just a return to normalcy. We’ve lived through 15 years of truly abnormal trends, and after working off the devastating effects of the housing bust, we’re finally seeing signs of more normal conditions. Distress sales will no longer be playing an outsized role, new construction is returning to more traditional levels, and prices rise at more normal rates consistent with a more balanced market.

2. Generational shuffle will make 2016 the best year to sell in the near future

Millennials emerged as a dominant force in 2015, representing almost 2 million sales, which is more than one-third of the total. This pattern will continue in 2016 as their large numbers combined with improving personal financial conditions will enable enough buyers between ages 25 and 34 to move the market—again. The majority of those buyers will be first-timers, but that will require other generations to also play larger roles.

Two other generations will also affect the market in 2016: financially recovering Gen Xers and older boomers thinking about or entering retirement. Since most of these people are already homeowners, they’ll play a double role, boosting the market as both sellers and buyers. Gen Xers are in their prime earning years and thus able to relocate to better neighborhoods for their families. Older boomers are approaching (or already in) retirement and seeking to downsize and lock in a lower cost of living. Together, these two generations will provide much of the suburban inventory that millennials desire to start their own families.

Assuming that most of these households will both sell and buy, it is important to recognize that 2016 is shaping up to be the best year in recent memory to sell. Supply remains very tight, so inventory is moving faster. Given the forecast that price appreciation will slow in 2016 to a more normal rate of growth, delaying will not produce substantially higher values, and will also see higher mortgage rates on any new purchase.

3. Builders will focus on more affordable price points

One aspect of housing that has not recovered yet has been single-family construction. Facing higher land costs, limited labor, and worries about depth of demand in the entry-level market, builders have shifted to producing more higher-priced housing units for a reliable pool of customers. That focus caused new-home prices to rise much faster than existing-home prices. Builders were able to be profitable and grow by following this move-up and luxury strategy, but their growth potential was limited by avoiding the entry level. That should begin to change in 2016.

We are already seeing a decline in new-home prices for new contracts signed this fall. In addition, credit access is improving enough to make the first-time buyer segment more attractive to builders. We’re looking for the strong growth in new-home sales and single-family construction as builders offer more affordable product in the year ahead. Consumers of all types should consider new homes, but availability will be highly dependent on location.

4. Higher mortgage rates will affect high-cost markets the most

We told you mortgage rates would go up in 2015, and they did—but they also went back down. We expect similar volatility in 2016, but the move by the Federal Reserve to guide interest rates higher should result in a more reliable upward trend in mortgage rates.

Thirty-year fixed rates will likely end 2016 about 60 basis points higher than they are today. That level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase. However, higher rates will drive monthly payments higher, and, along with that, debt-to-income ratios will also go higher. Markets with the highest prices will see that higher rates will result in fewer sales; however, across the U.S., the effect will be minimal as the move to higher rates will spur more existing homeowners to sell and buy before rates go even higher.

5. Already unaffordable rents will go up more than home prices

House sold sign

The housing crisis that politicians are ignoring is that the cost of rental housing has become crushing in most of the country. More than 85% of U.S. markets have rents that exceed 30% of the income of renting households. Furthermore, rents are accelerating at a more rapid pace than home prices, which are moderating. We’ve been seeing asking rents on vacant units increase at a double-digit pace in the second half of this year.

Because of this, it is more affordable to buy in more than three-quarters of the U.S. However, for the majority of renting households, buying is not a near-term option due to poor household credit scores, limited savings, and lack of documentable stable income of the kind necessary to qualify for a mortgage today.

This trend does not bode well for the health of the housing market in the future. It will only improve if we see more construction of affordable rental housing as well as more of a pathway for renters to become homeowners.


The Rush:  How Baby Boomers Approach Home Buying

Amanda Riggs/National Association of Realtors – September 14, 2015

BoomerWe often receive questions to NAR’s Research Department regarding housing for the Baby Boomer generation. People want to know, why isn’t there specific housing built for them? How can REALTORS® cater to the needs of this group? The answers to those questions are contained in our research reports, but are often overlooked.

The Baby Boomer generation, first of all, is defined in two categories in our 2015 Home Buyer and Seller Generational Trends Report; people born from 1955-1964 are called Younger Boomers and those born from 1946-1954 are Older Boomers. We will refer to the general group as “Baby Boomers” unless distinct research indicates differences for the two subcategories.

Gen Graph

Combined, Baby Boomers account for 31 percent of the home buying population. This category gets overshadowed as a home buying demographic because they do not stand out as first-time buyers, as the Millennials do – which are a hot topic in the media and largely are first-time home buyers, and they are often not seen as buying large family homes with children under the age of 18 like Generation X. As a demographic, statistically speaking, their relative importance compared to Millennials appears to be less substantial because they are broken down into two categories.

Notably, Younger Boomers purchased more multi-generational homes in 2014 than any other age group at 21 percent. Baby Boomers in general have a strong purchasing power. Older Boomers have the same median income as Millennials approximately $76,000 for each and Younger Boomers have a higher purchasing power with a median income of $96,600.

Arrow - Senior

NAR’s Generational Trends Report also shows that Baby Boomers are buying detached single-family homes more than any other home type. Eighty-one percent of Younger Boomers bought single-family homes as did 72 percent for Older Boomers. Baby Boomers are selling their larger homes and downsizing for smaller places predominantly in the suburbs or small towns. Younger Boomers cited that the primary reason for purchasing a home was a job-related relocation (16 percent) followed by the desire for a smaller home (13 percent).  For Older Boomers, they bought homes first for retirement (15 percent) and second to be closer to friends and family (nine percent).

Screen Shot 2015-12-22 at 8.32.42 AMAdditionally, there are senior-related housing communities that cater specif
ically to the Baby Boomer and the Silent Generation. For all buyers over the age of 49 who purchased in senior related housing, their housing preferences are delineated in the chart:

Compared to other home buyers, Baby Boomers combined are 31 percent of the home buying population just after Millennials at 32 percent. Younger Boomers has the largest population of single females purchasing homes at 23 percent followed by Older Boomers at 21 percent. Single female Millennials are just half that pool of Baby Boomers at 12 percent. Single female Baby Boomers also purchased homes priced $100,000-150,000 more than any other price range.

Types of Homes Purchased by Baby Boomers

Older Boomers’ top reason for buying a new home more than any other age group (29 percent) was to enjoy the amenities of new home construction communities, to avoid renovations or problems with plumbing or electricity (28 percent), followed by the desire to customize the design features (25 percent). Factors that influenced Older Boomers were largely quality of the neighborhood, convenience to friends and family, shopping, and health facilities. Younger Boomers also prioritized the quality of the neighborhood but wanted convenience to jobs, schools, and shopping. Predominantly, Baby Boomers purchased homes ranging from $200,000-300,000 with three rooms and two bathrooms. About one-quarter of Baby Boomers bought homes that were built between 1960 and 1986 that are 1,501-2,500 square feet.

Heating and cooling costs were more important to Baby Boomers than other generations. Gen Y and Millennials were most concerned with commuting costs. Baby Boomers were more likely than other generations to report that they made no compromises on the home they purchased, whereas Millennials noted they compromised on price and size. Younger Boomers foresee that moving could be caused by life changes such as relocation for work whereas Older Boomers viewed their purchased as permanent and their ‘forever home.’

The Home Search Process for Baby Boomers

For Baby Boomers, they were twice as likely to contact a real estate agent first when starting the home search process compared to Millennials. All buyers looked online at 43 percent and Older Boomers drove by homes in various neighborhoods. Baby Boomers in general were half as likely as Millennials to use a mobile device to search for information about homes and utilized online video sites and newspaper ads more than other generations. Almost all generations equally visited 10 homes before they purchased.

Millennials found their homes on the internet 51 percent of the time compared to Older Boomers that found their homes first with a real estate agent 39 percent of the time and only 34 percent on the internet. Thirty-two percent of Older Boomers looked at foreclosures whereas 59 percent of Millennials considered it. All generations noted that the most difficult part of the home buying process was finding the right property. Millennials noted that understanding the process was difficult 27 percent of the time whereas Baby Boomers only cited this as an impediment seven percent of the time. Most notably, Baby Boomers used virtual tours 25 percent more frequently than Millennials. The Silent Generation reported they were the most satisfied with the home buying process above all other generations at 68 percent compared to 52 percent of Millennials.

 


Housing Starts Down in October, Permits Up

National Association of Home Builders – November 18, 2015

1310069946_img0

Led by a steep drop in multifamily production, nationwide housing starts fell 11% to a seasonally adjusted annual rate of 1.06 million units in October, according to newly released data from the HUD and the Commerce Department. Multifamily starts declined 25.1% to a seasonally adjusted annual rate of 338,000 units while single-family production edged down 2.4% to 722,000 units. Both sectors posted permit gains.

“The fact that permits are rising is consistent with our builders’ continued optimism in the housing market,” said NAHB Chairman Tom Woods. “Even though starts dropped in October, they have stayed above the one million mark for seven straight months — the longest streak in almost seven years.”

Combined single- and multifamily starts rose in the Northeast and Midwest, with respective gains of 10.2% and 15%. Meanwhile the South fell 18.6% and the West dropped 16.2%.

Overall permit issuance rose 4.1% to 1.15 million units in October. Multifamily permits rose 6.8% to a rate of 439,000 while single-family permits increased 2.4% to 711,000.

“This month’s decline can be attributable to the volatile multifamily sector adjusting to trend after an unusually high September, as well as the storms and flooding affecting single-family production in the South,” said NAHB Chief Economist David Crowe. “However, with permits ticking upward, we expect to see the housing market continue to grow at a modest pace.”

Regionally, the Northeast, Midwest and South posted respective permit gains of 5.9%, 2.4% and 7.5%. The West fell 2.6%


November 2015 Newsletter

November 2015 Newsletter

Jeff Fleming headshot 2012

This year’s annual conference in Charleston, South Carolina was fantastic!  The topic was, “A Year of Change, Renewal and Re-Imagination”.  Charleston was dealt a seemingly insurmountable economic blow when the Naval Shipyard’s impending closure was announced in 1993.  The Shipyard employed 8,000 at its peak.  Mayor Joe Riley used this ‘date with the hangman’ to successfully focus on the city’s uniqueness and authenticity.  In the process he became revered for his service and unwavering commitment by the U.S. Conference of Mayors.

Today, Charleston is ranked as a top 5 U.S. destination city by international travelers alongside New York, Chicago, Las Vegas and Seattle. Back in my community of Kingsport, Tennessee, we sought inspiration from Mayor Riley.  When we faced manufacturing downsizing in the mid-1990s, we used retiree attraction as one of several non-traditional economic development strategies – and it paid off.
The annual conference attracted an interdisciplinary group made up of government officials, chambers of commerce, tourism, real estate developers, economic developers, attorneys, economists and marketing specialists.  It’s the best place to get relevant data, demographics, and trends that impact us all.  If you didn’t make it this year, please mark your calendar for next – or sign up for our webinars throughout the year!Sincerely,Jeff Fleming Chair, The AARC



AARC’s Annual Conference Was a HIT!  

Change, Renwal and Re-Imagination…

DSC_0009Charleston served us well as one of the best conference locations in years. The history, charm and warmth of this classic Southern city welcomed us with open arms providing the perfect backdrop, opportunities for exciting activities and tons of Southern Hospitality. Coupled with this unique setting, our conference speakers brought the same level of interest and enthusiasm. Our 2015 speakers offered  unique insight on today’s ever changing marketplace and cutting edge trends and research.  If you missed the conference you missed a tremendous opportunity to learn from those making gains in retiree recruitment and share best practices with your DSC_0030
peers.  Look for the upcoming announcement of our 2016 conference location!

We have posted all of the PowerPoint presentations and videos from the conference as well as numerous photos during the conference, awards and Welcome Reception. These PowerPoint presentations, photos and videos can be found online in our Member’s Only Section.

2015 Conference Resources, Members Only – Click Here

It is also important that we thank our Sponsors again, without these supporters the conference could not have been a success; Blue Ridge Printing, Center for Carolina Living, Circumference Design Group, Focus3, Hometown Mississippi Living, Mississippi Gulf Coast Retiree Partnership, RetireNC, Retire Tennessee and ideal-LIVING.


The AARC Board of Directors Report


aarcThe Board of Directors and Executive Board thank the membership for their participation in our 2016 Election of Officers. We would like to thank Marcia Crawford for her years of contributions, as she will be rotating off the board at the end of the year. We are excited to welcome the reelection of Frank Carmel (DC), Daniel Keir (NC) and Mike Notartomaso (SC) in addition we welcome Rosie Vassallo (MS) as our newest member of the Board of Directors.

The 2016/2017 Executive Board will be led by Andre´ Nabors as Chairperson, Rachel Baker as Vice-Chairperson, Kristy Peters as Secretary and Daniel Keir as Treasurer. Your entire board is excited for 2016 and we thank you for your continued support.

DSC_0107We would also like to thank Jeff Fleming for his contributions as our 2014/2015 Chairperson. Jeff’s passion for economic development and leadership of the Board of the Directors of the American Association of Retirement Communities will be truly missed. He will continue to serve on the Board of Directors.

 


Home Prices Accelerate in September, Says S&P/Case-Shiller


Lauren Ginsler, FORBES – November 24, 2015

Home prices gained steam across the country in September, according to data released Tuesday by S&P/Case-Shiller, fueling concerns about affordability for buyers.

960x0On a national basis, single-family home prices rose 4.9%, according to the S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions. This compares to a 4.6% increase in August.

An index measuring 20 cities shows that home prices rose an annual 5.5% in September, compared to 5.1% the month before. A separate index measuring 10 major cities shows that home prices gained 5%, up from 4.7% the month before.

The cities with the highest year-over-year gains were San Francisco (11.2%), Denver (10.9%) and Portland (10.1%).

Home prices have continued to rise at more than double the rate of inflation, causing some concern about whether it’s getting increasingly difficult for those looking to buy a home. Rising rents and soft wage growth add to the challenge, starting with saving for a down payment.

“Sellers may be singing the praises of the season, but buyers could be left grumbling ‘Bah Humbug’ because the market is acting more Grinch-like for renters and others looking to buy a home right now,” said Zillow chief economist Svenja Gudell.

Eyes are also on the Fed, which could raise interest rates at its December policy meeting and impact the cost of taking out a mortgage. A first rate hike isn’t likely to push the 30-year mortgage rate above 4%, though, says David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Seasonally adjusted, the national index rose 0.8% in September from the month before, while the 20-city index and 10-city index both rose 0.6% month-over-month.


Why the Housing Rebound Hasn’t Lifted the U.S. Economy Much

Joe White, The Wall Street Journal – November 24, 2015

American homeowners are finally digging out of the hole created by the housing crisis. But their housing housing600wealth is playing a much smaller role in the overall economy than it did before the downturn.

Home equity has roughly doubled to $12.1 trillion since house prices hit bottom in 2011, according to the Federal Reserve. As a result, a key gauge of housing wealth—homeowners’ equity as a share of real-estate values—is nearing the point seen a decade ago, before the downturn.

Such a level once would have offered a double-barreled boost to the economy by providing owners with more money to tap and making them feel more flush and likely to spend. But today, that newfound wealth has had little effect on behavior. While the traditional ways Americans tap their home equity—home-equity loans, lines of credit and cash-out refinances—are higher than last year, they are still depressed.

In the first half of the year, owners borrowed $43.5 billion against their homes with home-equity loans and lines of credit, according to trade publication Inside Mortgage Finance. That was 45% higher than in the first half of 2014, but scarcely a quarter of the amount seen when equity was last as high in 2007.

Meanwhile, cash-out refinances, which let homeowners take out a new mortgage and tap some of the home’s value at the same time, were up 48% in the three months ended in August from the year-earlier period, according to Black Knight Financial Services.  But they remain below the level seen in the summer of 2013. The average cash-out refinance in the three months ended in August left the borrower with mortgage debt of about 68% of the home’s value—not a risky level by any stretch.

Home equity’s effect on consumer spending is at its lowest ebb since the early 1990s, according to Moody’s Analytics. The research firm estimates that every $1 rise in home equity in the fourth quarter of 2014 would translate to about two cents of extra consumer spending over the next 1 to 1½ years. That was a third of the impact home equity had before the bust, Moody’s said.

Wall Street Journal GraphThe impact is more muted now despite the fact that home equity per homeowner has roughly doubled. At the end of the second quarter, the figure was about $156,700, up from $81,100 in the second quarter of 2011, according to Moody’s Analytics chief economist Mark Zandi. Though the homeownership rate has fallen, the total number of households has increased, meaning the number of households that own hasn’t changed much since the housing bubble burst in 2006, Mr. Zandi said.

Why aren’t homeowners feeling flush again? For one thing, since rising home prices over the past few years largely have made up for ground lost during the recession, many owners might not even realize they have equity to tap.

The percentage of homeowners who were underwater, or owing more on their mortgage than the home’s value, dropped to 8.7% by mid-2015 from 21% at the end of 2011, according to CoreLogic. Yet the percentage of homeowners who thought they were underwater fell by merely one percentage point to 27%, according to housing-finance company Fannie Mae.

The bust looms large and home equity is seen as more fleeting than it used to be, said Fannie Mae chief economist Doug Duncan.

“Consumers are definitely more conservative financially than they were 10 years ago. They’ve seen that house prices can be volatile,” Mr. Duncan said.

Mortgage lenders also aren’t giving owners access to as much equity as they used to. While it was common during the boom to see loans that took out 100% or even more of a home’s value, now few will let an owner take out more than 80%.

Finally, other kinds of loans are cheaper, removing one incentive to tap home equity.

Six years ago, for example, the average five-year new-car loan had an interest rate of 6.83%, versus 5.56% for a $30,000 home-equity credit line. But in the week ended Nov. 11, the average interest rate for a five-year new-car loan was 4.3%, according to Bankrate.com, versus 4.74% for the HELOC.

Home equity as a share of real-estate values at the end of the second quarter was 56%, according to the Federal Reserve, not quite back to the level of 60% seen in the boom. That means Americans’ mortgage debt is still elevated relative to home values, which could be another factor affecting the decision of whether or not to cash out equity.

Could home equity start to flex its muscle sometime soon?

Some economists think it might. One reason: In many metro areas, home prices have overtaken or are about to overtake their boom-era peak.

About 38% of metro areas had prices above their pre-2009 peak at the end of the third quarter, up from a 30% level last year, according to Moody’s Analytics and CoreLogic. A further 13% of metros are within 5% of their prebust peak.

That’s important, because it means new home equity is being created rather than merely making up for lost ground. It also means fewer homeowners are underwater, freeing them up for a home sale and potential move-up purchase while also making home improvements and renovations seem less like throwing good money after bad.

“We’re at an inflection point,” Mr. Zandi said. “Since the crash, it’s all been about repairing homeowners’ equity but now that house prices are returning to prerecession levels, we will see homeowners’ equity driving consumer spending, home improvements and economic activity.”


October 2015 Newsletter

October 2015 Newsletter

Jeff Fleming headshot 2012

Our annual conference is just around the corner! Don’t miss an opportunity to network with like-minded communities and peers!  This is also a great opportunity to bring those who may want to learn more about retiree demographics, trends, and economic potential.  Click Here to learn more about the 2015 Conference.

Does your community recognize the potential of retiree recruitment as a non-traditional economic development strategy?  For those who do, their economies have been improved without huge investments in infrastructure, tax abatements, “clawback” agreements, and industrial parks.

So what are you waiting for?  Learn more about the Annual Conference and market yourself to this crucial piece of the economic pie.

Sincerely,

Jeff Fleming Chair, The AARC



Change, Renewal and Re-Imagination

AARC’s Annual Conference, November 11th – 13th

Charleston_1

The Annual Conference of the American Association of Retirement Communities is a key spot on the calendar for decision-makers in the business of retiree attraction. Economic development, marketing and research leaders have convened at the AARC’s annual event for 2 decades, and the theme and venue for 2015 are sure to make this year’s conference a must.

Change, Renewal and Re-Imagination, the theme of the 2015 AARC Annual Conference, is well reflected in our host city of Charleston, South Carolina. Named the #1 City In North America in the most recent Conde Nast Traveler Readers’ Poll, Charleston offers serenity, beauty and fun – as well as a great example of how a community evolves into something truly great.

The AARC’s board of directors has put together a strong line-up of formal and informal educational sessions, research presentations, and symposia by industry leaders. They’ve also saved room for a little fun – and Charleston is a superior venue for that, too!

The American Association of Retirement Communities is a 20 year old not-for-profit professional association that assist communities interested in targeting and attracting retiree buyers – and the AARC’s Annual Conference is the largest retiree research, training and networking event of its kind.

Don’t miss the opportunity to share with your peers the valuable techniques and best practices to attract retirees to your destination or development. In addition to general sessions this conference also offers two breakout tracks – one for communities and one for developers – to provide you and your team with the latest trends in retiree attraction.

2015 Speakers Include

  • Chris Fair
  • Pat Mason
  • David Twiggs
  • Jeff Fleming
  • Jessica Stollings
  • Jeff Humphries
  • Daniel Keir
  • Eric Porper
  • Ed McMullen, Sr

Click Here To Sign Up or Learn More

See you in Charleston!


U.S. existing home sales rise more than expected, inventory tighter

CNBC/REUTERS – October 22, 2015

Mature Couple Toasting Champagne Flutes In New House U.S. home resales rose more than expected in September to the second highest monthly sales pace since February 2007, suggesting the housing market continues to show strength compared to the rest of the economy.

The National Association of Realtors said on Thursday existing home sales increased 4.7 percent to an annual rate of 5.55 million units.

August’s sales pace was revised slightly lower to 5.30 million units from the previously reported 5.31 million units.

Economists polled by Reuters had forecast home resales rising to a 5.38 million-unit pace last month. Sales were up 8.8 percent from a year ago.

Sales increased in all four regions of the United States and inventory continued to tighten. Unsold inventory was down to a 4.8-month supply at the current sales pace, down from 5.1 months in August and 5.4 months a year ago.

“As we enter more softer demand months, we may not really feel the squeeze of tight inventory, but come spring of next year … we could be facing a very tight inventory situation,” said Lawrence Yun, the NAR’s chief economist.House owner/real estate agent giving away the keys - house out of focus

Nationwide, the medium home price fell to $221,900. That was still an increase of 6.1 percent from one year ago.

The stable pace of home resales in September follows Tuesday’s strong housing starts data, which was buoyed by increased demand for rental apartments.

Housing has steadily improved relative to the rest of the U.S. economy, which has been buffeted by soft global demand, a strong dollar, and weak capital spending in the energy sector.

 


Housing Trends for Baby Boomers

Anne Baker/National Association of Home Builders

New Features Keep Pace with this Active Generation

1310069946_img0Baby boomers, who were the largest American generation until the Millennials took over, are either retired or quickly nearing retirement age. Boomers, born between 1946 and 1964 and who count more than 76 million, may be getting older, but they are definitely not ready to head to the retirement home!

The boomer generation is more active than generations past, has a more sophisticated style and wants options and choices in their homes. Whether they are selling the homes where they raised their children and heading to sunnier pastures, or staying put and redesigning to accommodate their retired lifestyle, boomers are making an impact on housing trends.

Some features that home builders and remodelers are seeing as they begin to cater to the boomers include:

Home Offices: Some boomers are choosing to work past the age of 65. As they transition from a traditional 9-to-5 job, however, they want home offices for flexibility. A second career or part-time employment often eliminates the hassle of commuting while keeping them active and bringing in supplementary income.

Tech/Media Centers: The tech-savvy boomer generation wants top-of-the-line amenities for their homes such as a media room with surround sound and central control systems, which manage all media sources in one location. The house may include a wireless home network, remote control lighting and security features.

Wider Doors and Hallways: As a person ages, there is a likelihood that use of a wheelchair might become a necessity. Designing a home that is livable now but can transition and be functional as the occupant ages is important in ensuring that the home will be a good long-term investment. Wider doors and hallways are useful for moving larger furniture today, and will also be wheelchair accessible tomorrow.

Better Lighting/Bigger Windows: The need for more lighting usually increases as we grow older. To accommodate this, builders are adding more windows and making them larger to let in more natural light. They are also adding more light fixtures in areas including under cabinets and in stairwells. Multiple switches to reduce the number of trips and dimmer controls to eliminate glare are other options.

First-Floor Bedrooms and Bathrooms: More than 40% of new homes have master suites downstairs, a 15% increase over a decade ago. Boomers not wishing to go up and down stairs with bad knees and aching backs have helped fuel this trend. The bedrooms also are also larger, with more spacious walk-in closets and bathrooms that have a separate tub and shower and dual sinks.

Easy to Maintain Exteriors/Landscaping: Yard work, painting, and other landscaping chores may no longer be enjoyable to aging home owners. People who move to a new home when they retire may opt for a maintenance-free community. Those that choose to stay in their homes might make improvements to exterior surfaces such as installing stucco, brick or low-maintenance siding. Lawns are being replaced with living patios, decorative landscaping, or flower beds which can be a hobby for gardening enthusiasts.

Flex Space: Flex space has become more prevalent in both new homes and remodeling. Flex spaces are rooms that take on the purpose of the present home owner’s needs but can adjust with changes as they occur. What may have once started out as a guest bedroom can be redecorated to serve as a hobby room or library. This allows home owners to stay in their homes longer as it continues to serve their needs throughout life’s stages.


September 2015 Newsletter

September 2015 Newsletter

 

Jeff Fleming headshot 2012

Our annual conference is just around the corner! Don’t miss an opportunity to network with like-minded communities and peers!  This is also a great opportunity to bring those who may want to learn more about retiree demographics, trends, and economic potential.  Click Here to learn more about the 2015 Conference.  Early Bird Sign Up Ends October 15, 2015

Does your community recognize the potential of retiree recruitment as a non-traditional economic development strategy?  For those who do, their economies have been improved without huge investments in infrastructure, tax abatements, “clawback” agreements, and industrial parks.

This population group will grow to 92 million by 2060.  Many of these retirees are going to be looking for a home to purchase and a community to spend their lifetime of accrued earnings.  Will it be yours?

So what are you waiting for?  Learn more about the Annual Conference and market yourself to this crucial piece of the economic pie.

Sincerely,

Jeff Fleming Chair, The AARC



Change, Renewal and Re-Imagination

AARC’s Annual Conference, November 11th – 13th

Charleston_1

The Annual Conference of the American Association of Retirement Communities is a key spot on the calendar for decision-makers in the business of retiree attraction. Economic development, marketing and research leaders have convened at the AARC’s annual event for 2 decades, and the theme and venue for 2015 are sure to make this year’s conference a must.

Change, Renewal and Re-Imagination, the theme of the 2015 AARC Annual Conference, is well reflected in our host city of Charleston, South Carolina. Named the #1 City In North America in the most recent Conde Nast Traveler Readers’ Poll, Charleston offers serenity, beauty and fun – as well as a great example of how a community evolves into something truly great.

The AARC’s board of directors has put together a strong line-up of formal and informal educational sessions, research presentations, and symposia by industry leaders. They’ve also saved room for a little fun – and Charleston is a superior venue for that, too!

The American Association of Retirement Communities is a 20 year old not-for-profit professional association that assist communities interested in targeting and attracting retiree buyers – and the AARC’s Annual Conference is the largest retiree research, training and networking event of its kind.

Don’t miss the opportunity to share with your peers the valuable techniques and best practices to attract retirees to your destination or development. In addition to general sessions this conference also offers two breakout tracks – one for communities and one for developers – to provide you and your team with the latest trends in retiree attraction.

2015 Speakers Include

  • Chris Fair
  • Pat Mason
  • David Twiggs
  • Jeff Fleming
  • Jessica Stollings
  • Jeff Humphries
  • Daniel Keir
  • Eric Porper
  • Ed McMullen, Sr

Click Here To Sign Up or Learn More

See you in Charleston!


New Home Sales Highest since 2008

Patrick Gillespie/CNN Money – September 24, 2015

Americans went shopping for homes in August.

150107143529-home-sales-1024x576New home sales for single families totaled 552,000 homes last month. That’s the best monthly figure since February 2008 and an encouraging sign of the housing market’s momentum.

It was nearly a 6% increase from July, which was also revised up, according to the Census Bureau.

Still, the figure is a far cry from the historic average: the average monthly number of new home sales over the last 30 years is 706,000 according to Peter Boockvar, chief market strategist at the Lindsey Group.

“Today’s figure is encouraging but we’ve got a LONG way to go,” Boockvar wrote in a note to clients.

Some economists believe there could be an uptick in home buying as prospective home owners try to lock in a low mortgage rate before the Federal Reserve raises interest rates.

The average rate on a 30-year fixed mortgage in August was 3.9%, very low on a historical basis. A decade ago the rate was about 5.8% and 20 years ago it was 7.8%. When the Fed raises rates, the expectation is that rates on mortgages will gradually move up too.

The central bank is now expected to raise rates in either October or December.


No Liftoff:  Federal Reserve leaves rates near 0%

Patrick Gillespie & Heather Long/CNN Money – September 17, 2015

The Federal Reserve is still waiting for the right moment.

In a decision that could have gone either way, the Fed decided not to raise its key interest rate in September. America’s central bank hasn’t raised rates in almost a decade and rates have been stuck near zero since the depths of the financial crisis in December 2008.

Concerns about a global economic slowdown, low inflation in the U.S. and volatile stock markets lowered the chances of a September rate hike.

“The situation abroad bears close watching,” Fed chair Janet Yellen said at a press conference Thursday. “Heightened concerns about growth in China and other emerging market economies have led to notable volatility in financial markets.”

The stock market surged after the decision with the Dow rising over 150 points, but then it feel back to flat as it appeared to sink in to investors that a rate increase is likely coming.

Although they didn’t raise rates now, the majority of Fed committee members believe there will be a rate hike in 2015, according to its economic projections. The committee has two remaining meetings this year — in October and December.

“Every meeting is a live meeting,” Yellen stressed. October “remains a possibility”

Overall, the Fed does sound slightly more optimistic about the U.S. economy. It raised its expectations for economic growth this year to 2.1% from 1.9%, and it lowered its projection for the unemployment rate by the end of the year to 5%. Currently, unemployment is 5.1%.

Yellen emphasized that even though the committee is watching the jitters abroad and in U.S. markets, it has “not fundamentally altered our outlook.”

Still, it wasn’t enough to raise rates in September.

“The committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market,” and remains reasonably confident that inflation will pick up, the Fed’s committee said.

A variety of prominent voices — from chiefs of the IMF and World Bank to a Nobel Prize-winning economist — had urged the Fed not to raise rates in September. It’s unclear how much of a role those voices played, although protestors stood outside the Fed’s meeting spot this week urging them not to raise rates until more people have jobs.

Two forces are playing into the Fed rate hike debate: a good-but-not-great U.S. economy and a gloomy economic outlook outside the U.S. The Fed’s two primary goals are to help the economy achieve full employment and keep inflation from getting out of hand.

Stock market volatility plays into the Fed’s decision too, although Yellen tried to downplay the market’s impact on central bankers’ thinking.

“The Fed should not be responding to the ups and downs of the markets,” she said.


Weekly Mortgage Applications Surge 13.9% on Rate Dips

Diane Olick/CNBC – September 23, 2015

The high drama leading up to and following the Federal Reserve’s decision not to raise interest rates had mortgage borrowers and their lenders busy last week.103014192-GettyImages-489468042.530x298

Total application volume surged 13.9 percent on a seasonally adjusted basis for the week ended Sept. 18 versus the earlier week, according to the Mortgage Bankers Association (MBA). The previous week had an adjustment for the Labor Day holiday.

“We saw significant rate volatility last week surrounding the FOMC meeting, and rate declines toward the end of the week likely drove applications from both prospective homebuyers and borrowers looking to refinance,” said Mike Fratantoni, MBA’s chief economist.

Refinance applications, which are most rate-sensitive, increased 18 percent from the previous week. Purchase applications rose 9 percent to their highest level since June 2015. They are now 27 percent higher than the same week one year ago.

“The increase in purchase activity was solely driven by applications for conventional purchase loans, which reached the highest level since June 2013. That time period was the so-called taper tantrum, when mortgage rates picked up significantly following Fed communication to slow the pace of its asset purchases. Overall, the purchase market continues to show strength,” added Fratantoni.

Despite moves lower during the week, by the end the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) was unchanged at 4.09 percent, with points increasing to 0.45 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.

The increase in purchase applications is a welcome sign for the housing market, after a disappointing read on August home sales this week. Sales fell nearly 5 percent for the month after rising for three straight months, according to the National Association of Realtors. The group blames tight inventory and high prices for the weakness in home sales.

Mortgage rates moved lower Tuesday amid a selloff in the stock market; they are now at the lowest levels in four months, which could prompt even more current borrowers and potential buyers to take advantage.

July 2015 Newsletter

July 2015 Newsletter

 

Jeff Fleming headshot 2012

Summer is at it’s peak.  It’s a great time to be outdoors up north, but the time is quickly fleeting.  It’s a great time to search for a retirement destination with a longer season of warm weather. It’s time to schedule your visit to a potential retirement destination.  Have you done your research?  No need! AARC has done it for you!  AARC is your source for the best in retirement destinations.  Whether it’s a planned retirement community or just a great town that welcomes retirees, AARC’s got you covered.  I hope you’ll take to time to learn about our Seal of Approval communities here.  We hope to see you soon!

I hope you’ll take to time to learn about our upcoming annual conference in Charleston, SC November 11th – 13th – Click to learn more

Sincerely,

Jeff Fleming Chair, The AARC



AARC’s Annual Conference, November 11th – 13th

A Year of Change, Renewal and Re-Imagination – See you in Charleston, SC

Charleston_1The AARC’s Annual Conference is a not to be missed event for anyone who works in retiree attraction. The conference blends together seasoned professionals in the retirement community industry. Whether it’s your first time or you’re an AARC regular, this conference will offer you: Unparalleled networking opportunities and innovative ideas from the people driving success and change in our industry. You’ll hear from such industry insiders as Chris Fair, Jeff Humphries and many more…

The American Association of Retirement Communities is a 20 year old not-for-profit professional association that assist communities interested in targeting and attracting retiree buyers – and the AARC’s Annual Conference is the largest retiree research, training and networking event of its kind. Don’t miss the opportunity to share with your peers the valuable techniques and best practices to attract retirees to your destination or development. In addition to general sessions this conference also offers two breakout tracks – one for communities and one for developers – to provide you and your team with the latest trends in retiree attraction.

Click Here To Sign Up or Learn More

See you in Charleston!



August 20th Webinar – Boost Your Generational IQ, Boost Your Economic Impact

Baby Boomers are turning 65 at a rate of 10,000 a day according to Pew Research. Savvy communities are investing time and resources to understand how to attract this large generation (80-million strong) to retire in their area. The economic potential is profound… but could understanding other generational trends reveal an even greater opportunity to leverage?

What if some of the qualities Baby Boomers are looking for in retirement are similar to those that their kids and grandkids, the Millennials, are seeking as they launch their careers? Could some of the same development strategies that inspire Boomers to plant roots in your community attract young professionals, the lifeblood of your future, too?

In this webinar, generational speaker and author Jessica Stollings will explore these possibilities. She will introduce you to the generations in American society and take a look at the values, perspectives, spending habits and ideals that influence their behaviors. She will also share ideas to thoughtfully engage America’s two largest generations- Baby Boomers and Millennials- in your local community, organizations, and causes.

S.Stollings

Jessica Stollings is a speaker, author, blogger, and the President of ReGenerations- an organization that helps connect generations to build a better future. Often called a “generational translator,” her passion (besides coffee) is making sure there is clear understanding and communication between the newest batch of college graduates and the generation of parents and grandparents that went before them. Management teams, pastors, policy groups and educators across the country have built solutions around her ideas. To learn more, visit www.re-generations.org.

You can also find her new book, ReGenerations: Why Connecting Generations Matters (& How To Do It), on Amazon.

Click To Learn More or Sign Up – Click Here



Single Family Home Prices Rising Slower Than Condos, But It’s All Up, Up, Up

Lisa Selin Davis / Realtor.com – July 22, 2015

up-arrow-monopoly-housesAnd you thought the numbers were high last month! Existing-home sales in June surpassed the high in 2006, and the median sale price hit an all-time high, according to data released by the National Association of Realtors on Wednesday.

“All major regions experienced sales gains in June and have now risen above year-over-year levels for six consecutive months,” the NAR said in its release.

The sales of single-family homes, townhomes, condominiums, and co-ops rose 3.2% in June, to a seasonally adjusted annual rate of 5.49 million; in May, the number was 5.32 million and last June it was 5.01 million.

Perhaps you should jump on the condo and co-op train—and quick. Their sales rose 6.6%, more than the 2.8% of single-family homes, but they were still cheaper. The median price for existing condos was $226,500 in June, 5.5% above last year, and the highest since August 2007, when it was $229,200. The median price for existing single-family homes was $237,700, a 6.6% rise from June 2014, and higher even than the peak median sale price in July 2006—$230,900.

Part of the frenzy comes from steady job growth and an uplifted economy, says NAR chief economist Lawrence Yun.  “Buyers have come back in force,” he said. Our own chief economist, Johnathan Smoke, notes another difference: the kinds of buyers.

“We’ve now surpassed the strong level of activity in 2013 that was investor-driven and composed of 90% more distressed sales than exists today,” Smoke said. “This is therefore the biggest and healthiest year for existing-home sales since 2006, when speculation was rampant.”

At $236,400, the median existing-home price in June for all housing types was 6.5% above June 2014, surpassing the high of $230,400 in July 2006. The number, NAR writes, “marks the 40thconsecutive month of year-over-year gains.” And NAR’s not the only organization reporting an uptick in numbers. The Federal Housing Finance Agency’s monthly House Price Index rose 0.4% in May.

The reason? You guessed it. Good old supply (low) and demand (high); housing inventory in June rose only 0.9%, to 2.3 million existing homes for sale. All-cash sales are down, too, from 24% in May to 22% in June.

We know what it all means for buyers in the hotter home markets, but there are plenty of affordable markets in which to search. Time to tool around in those areas, said Smoke.

“People may need to consider different markets or different areas to find affordability, or they may need to make key trade-offs,” he says.

You might have to give up your hopes of a specific size of home or its location, whether it’s old or new, attached or single-family. But, said Smoke, if you weigh your options, you might not have to give up completely on the American dream.

Regional breakdown

Northeast: 4.3% increase to the annual rate of 720,000, 12.5% above last year. The median price was $281,200, 3.9% higher than June 2014.

Midwest: 4.7% increase to the annual rate of 1.33 million in June, 12.7% above last year. The median price was $190,000, 7.2% higher than June 2014.

South: 2.3% increase to the annual rate of 2.20 million in June, 7.3% above last year. The median price was $205,000, 7.2% higher than June 2014.

West: 2.5% increase to the annual rate of 1.24 million in June, 8.8%  above last year. The median price was $328,900, 9.9% above June 2014.



Are More New Homes on The Horizon?  The Commerce Department Says Yes

Lisa Selin Davis/Realtor.com – July 17, 2015

House of paper in handWe need more inventory. That would be the easiest solution to our nation’s high-priced housing problem. So the news from the Commerce Department on Friday morning is sounding good: In June 2015, privately owned housing starts rose 9.8% above May’s numbers.

“An increasing level of new construction is the primary way that the housing market will find balance in this surging demand but tight supply environment,” says our chief economist Jonathan Smoke.

While the report covers permits, starts, and completions, we shouldn’t put too much faith in the numbers, says Smoke.

“The measures are based on a survey of local jurisdictions and have been prone to wide fluctuations month to month since the downturn began,” Smoke says. “As a result, it’s often important to compare the monthly change to the relative standard errors reported with the data. In many cases the monthly changes do not prove to be statistically significant, and that’s again the case with the June starts data in this report.”

Also: Activity in May was a mixed bag, says Smoke. Permits were up 12% but starts were down 5% from April. One reason: a very wet May. “It’s it’s hard to break ground when it’s under water,” says Smoke.

Builders should feel pretty confident about breaking ground now, with home prices and rents rising so quickly and so high.

So what’s getting built? Not what you’d necessarily expect. “Single-family decreased 1% while multifamily increased 29%,” says Smoke. “I have more faith in the totals than the breakdown of single-family and multifamily. The single-family starts numbers have been revised up this spring, and I expect that this June number will be revised as well.”

Feeling a bit confused? Not to worry. Though the bipolar numbers may be a little hard to follow, we can trust the bottom line: More housing is on the way.