First consider how tough times might affect your decision
With a scary economy and a stagnant real estate market, it seems like an odd time to talk about selling a home and buying a new one. But that doesn't mean that the dream is over for those who have looked forward to the day when the kids are on their own and they can move to a place where there's a brand new kitchen, sidewalks which someone else shovels and garages that you never have to paint again.
Experts in the over-55 housing industry in New England will be the first to admit things are not the same as five, six years ago, when not only could you sell your existing home in a flash, but make a killer profit, too. They are also here to say that all is not bleak and that dream of a pre- or retirement home is still within reach.
Kevin Slattery is the owner of Etchstone Properties in his hometown of Nashua. Etchstone has been around for 25 years, building homes primarily in southern New Hampshire, including eight or more over-55 and over-62 communities, some of which include rentals in addition to purchased homes and apartments.
"The biggest impediment people have when thinking about moving to one of these communities is that they would like to get more money for their existing homes," says Slattery. "They know friends that made a lot of money but those friends sold their homes before 2005. Those days are gone now. That was the height in market values. And now they're down. You have to be open minded and sensitive to getting what your home is worth and judge what you can buy - something brand new in a new community with little maintenance and other people in your position," he notes.
"As they're sitting waiting for the housing market to come back to the levels they once were, which may never happen or take a long, long time, you could forfeit a tremendous increase in lifestyle quality - a care-free environment that you love as you grow older."
Slattery says, while there are all types of communities for pre-retired and retired people, he points out that, according to federal law, over-55 communities have to have at least one resident who is 55 or older and no one under the age of 19 living there, and over-62 communities require every resident of the household to be 62 or older.
But while the federal law mandates those restrictions, individual towns and cities can add other criteria for living and buying into these communities. For example they can say that no one over the age of 21 can live with residents of the 55-plus community.
Slattery says the other terms for 55-plus and 62-plus communities are legal terms defined by the government. But when you're thinking about making this kind of move you're likely to hear the following terms builders and others use for over-55 housing:
Active Adult Community: The term is used to describe a wide range of 55-plus communities where residents live in their own homes in an attached building or an unattached unit or, in more limited cases, units that can be rented. There's usually a monthly condo-like fee for the upkeep of the exterior of the home as well as landscaping, snow removal and in some cases a clubhouse, fitness area, golf courses and common land.
Supportive Retirement Communities: Long-term health care units or nursing homes with 24-hour medical and personal needs assistance.
Continuing Care Retirement Community: This is a large complex that provides a continuum of care, from apartments to assisted living units to skilled nursing care. CCRCs typically require a long-term contract and can provide a range of services that meet the elder's changing needs.
Assisted Living Retirement Community: This is a community that offers help with activities of daily living, which can include help with giving medication. This kind of community is for people who can not live totally alone but don't need round-the-clock care.
Jane O'Connor - former chairwoman and current member of the 50-Plus New England Housing Council for the National Association of Home Builders and owner of 55 Plus, which produces Mature Living Choices, a guide to Active Adult and Lifestyle Communities, and Senior Living Choices, a publication geared toward the care component of assisted living - is quite familiar with this subject.
O'Connor points out that by 2005 the housing market took all it could bear and then there was a downward spiral, and then the sub-prime mortgage rate debacle, all of which contributed to an erosion in consumer confidence. "And when that confidence is eroded," she says, "consumers tend to do nothing. People saw the resale value of their existing home going down and no one has a crystal ball. No one knows how far or how long it will take to rebound. People over 55 who want to make this move and know that the market is probably not coming back any time soon still have to make a decision. Experts are saying it may take five or more years. So people have to do a reality check. They need to look at their portfolio and they need to ask 'What is my home worth now? Can I afford to make this move I planned? I may not be retiring as early as I wanted to but can I still make this move?'"
And just because you might not be able to sell a home now for what it would have sold for 10 years ago doesn't mean a plan to move into an active adult or other over-55 community has to be forfeited.
"The truth is that people who had been in their home prior to 2000 and had their home for 20 or 30 years have equity, even though the market is down," O'Connor says.
"They have to get a reality check of what the house is really worth, and even though they won't make the profit they did in the 14 years when we had unprecedented growth in the housing industry, they will make a profit and they can move into an adult active community" (or other over-55 housing).
Slattery suggests that those wishing to make this move, "need to assess where their interest in a community as a whole is. You shouldn't change your outlook on purchases. It should still meet all your important needs - proximity to family and friends, services and culture. You should know what quality of building you want. Follow your heart."
Jane O'Connor's pointers for people considering a move to an over-55 community.
1. Use an appraiser, not an real estate agent. This is important to ensure no conflict of interest. An independent appraiser is best to use if you're pricing your existing house for resale. They have no agenda and they will tell you what the real value of your home is on the housing market.
2. Do your homework. You should have a total comfort level with the builder and their homes. We've heard the horror stories about people buying a home and ending up in a ghost town with few or no neighbors. Make sure the builders are solid and will have a continuing presence in the community.
3. Shop around. Go see homes in a wide enough area to see the diversity of product line - single-family homes, attached homes.
4. Look at the home you are purchasing as a home that will gain equity over time. You're not going to buy a home and think 'I'll be there two years.' You need to think longer term if looking for an investment toward future also.
5. Ask the builders if they can guarantee the prices you're paying today. Builders of over-55 housing out there recognize that the economy is unstable and some will guarantee today that if you buy your home at $300,000 and you have to sell the house in two years for, let's say, health reasons, they won't lose their investment even if the selling price goes down to $200,000. They will compensate you for the difference.
6. Find a flexible builder and make sure the community feels like the perfect fit for you and your lifestyle. Make sure you buy from someone who is concerned with your needs and offers choices, like different colors, lighting, flooring or appliance packages.
7. It's important to look for a home which will allow you to age in place. It should have details like wider hallways, better lighting and comfortable height of counters. What's in your master bathroom? Bathrooms are not just the place to wash up anymore. They're also retreats for a lot of people. In many cases people in adult communities want a steam shower with no curbs for the master bathroom and a soaking tub for one of the other bedrooms. You don't want to have a home with barriers - not necessarily for you, but often for your aging parents who might be visiting in a wheelchair. NH
This article appears in the December 2009 issue of New Hampshire Magazine