55+ Community resale values

[harley]

DW and I are considering buying a place in a 55+ community in Northern VA. We're actually much more interested in the home than in the community. I guess that's in keeping with my comments in the Perfect Home/Perfect Neighborhood thread. So the fact that it's 55+ isn't the draw. We just really like the house.

But the 55+ aspect isn't a major turn off for us either. It's a small community so the rules and such aren't too odious. The HOA fee is in keeping (slightly higher) than our current home. No real amenities, but close to anything you could possibly want.

So we're still in the consideration phase. But one thing we are curious about it the resale aspect. If we were to ever sell, it would have to be to someone 55 or older. So I guess that would shrink the possible customer base. But would it be significant? In other words, do home prices in 55+ communities pretty much keep up with other homes in their area? Or do they lose or even gain value vs the non-55+ homes? Has anyone seen any comparisons or statistics?

[Souschef]

We live in a +55 mobile home park, but I think the experience is transferable. We have very few homes for sale, because they are snapped up rather quickly.
My other thought is if you are going toretire there, why worry abut the resale value?

[audreyh1]

We seem to have pretty easy turnover in our neighborhood. Plenty of 55+ folks buying homes and looking for active retirement communities.

Sales are overwhelmingly due to folks moving to be closer to family.

[jazz4cash]

I live in suburban MD and I used to feel the same as you (e.g. age restriction reduces potential market). I feel differently now that I know many folks that would prefer to remain in the area and downsize but the availability of moderately sized homes in nice communities is tight. I think demand for 55+ will increase around here in coming years but builders prefer apartment/condo format.

[Scrapr]

We lived for 20+ years next to 2 55+ communities. What we saw (anectodally) was that the homes in the communities were consistantly lower priced than across the street in our neighborhood. But....many of them were 2+2. And built in the 60's 70's so many needed updating. I think the turnover is more. There seemed to be a good supply most of the time. (and if there wasn't wait a few weeks and watch the obits!)

Overall I'd say they were cheaper to buy but they did not appreciate like those outside the community

[4legsgood]

I'm interested in this topic too. You could look on zillow for changes in the zestimates in the the community. I'm sure some communities are better positioned for increase in value.

Trulia reports this, for the very large 55+ community of Sun City AZ:

"Real Estate Data for Sun City
Sun City market trends indicate an increase of $14,000 (9%) in median home sales over the past year. The average price per square foot for this same period rose to $121, up from $107."

I don't know if that's a long term trend, and might be due to new construction, but my sister's place there has definitely gone up in value probably 25% over the last 4 years (cumulative).

[Jerry1]

Being born at the end of the baby boom, the main caution I would have is to understand where you are in the bubble. Being at the end, I’ve found most of my life that I’ve just missed out. In this case, I’m guessing that buy the time I want to sell, the part of the bubble that increased the prices and demand will be through the system and I’ll get stuck for a loss, or at least less of a gain. I’m not positive, but I think right now, the percentage of people turning 65 each day is increasing. At some point it will be decreasing. That’s when these communities will take a hit financially. Of course that may be way past your time horizon which would be good.

[Scuba]

I think a good analysis would be to compare the 55+ community’s price per sq foot to a nearby neighborhood. I know that in Southern CA, 55+ communities’ prices are consistently lower than surrounding nearby neighborhoods because of the limited resale market. The price to buy in is cheaper too though, so ROI may or may not be that different.

[RunningBum]

Quote:

Originally Posted by Jerry1 Being born at the end of the baby boom, the main caution I would have is to understand where you are in the bubble. Being at the end, I’ve found most of my life that I’ve just missed out. In this case, I’m guessing that buy the time I want to sell, the part of the bubble that increased the prices and demand will be through the system and I’ll get stuck for a loss, or at least less of a gain. I’m not positive, but I think right now, the percentage of people turning 65 each day is increasing. At some point it will be decreasing. That’s when these communities will take a hit financially. Of course that may be way past your time horizon which would be good.

I think that's a really good point. The trend now for 55+ won't be the same as the baby boomers start dying off, so it depends on where you are in the spectrum. If you figure on selling in the next 10 years, you might still be fine, as the tail enders will still be buying. 20 years...not so sure.

[joeea]

Quote:

Originally Posted by harley But one thing we are curious about it the resale aspect. If we were to ever sell, it would have to be to someone 55 or older. So I guess that would shrink the possible customer base. But would it be significant? In other words, do home prices in 55+ communities pretty much keep up with other homes in their area? Or do they lose or even gain value vs the non-55+ homes? Has anyone seen any comparisons or statistics?

As is always true with real estate, it depends.

Real Estate values are hyperlocal. What is true in one part of the country may not be true in another. And what is true at one point in time may not be true at another.

I own a home in a 55+ community. It's in a beach town and we use it on weekends and vacations. When my wife retires next year, we'll sell our primary residence and move there full time.

Right now, the values of the homes in this community are going up at a rate higher than the surrounding town. While it's true that a buyer must be 55 or over, there is no shortage of such buyers wishing to purchase here. Every home that has turned over in the six years we have been here has been on the market for a very short period of time.

Your locale might be different. But here there appears to be no problem at all selling homes in a 55+ community. It may even be advantageous to the seller. A good local realtor could help you. Or you could research the sales history of homes in your area and compare those inside a 55+ community to those outside.

[karen1972]

Like all things location, ammenities, etc will play into it. I've been looking at a 55+ community even though I'm only 46 and annoyed I can't buy in.


The major reason is the homes are designed WAY WAY different and would be ideal for a couple with no kids that love to entertain and cook, but I guess those only exist if your 55+ according to builders.

Also the amenities are just amazing, its just a massive resort with everything one could want and more.

However, like all things, its the amenities that scares me too, will they keep it up, how costly will it become, if they don't keep it up how badly would that hurt property values.

The only two things I think that would hurt this community is 1. the cost of HOA and 2. if they started building identical homes elsewhere so you didn't have to buy into the community... but talking to builders that isn't happening anytime soon.

[Midpack]

Quote:

Originally Posted by harley DW and I are considering buying a place in a 55+ community in Northern VA. We're actually much more interested in the home than in the community. I guess that's in keeping with my comments in the Perfect Home/Perfect Neighborhood thread. So the fact that it's 55+ isn't the draw. We just really like the house.

Quote:

Originally Posted by karen1972 The major reason is the homes are designed WAY WAY different and would be ideal for a couple with no kids that love to entertain and cook, but I guess those only exist if your 55+ according to builders.

You might want to keep looking. We much preferred the ranch floor plans in 55+ communities, but we’d much prefer a mixed generation neighborhood. We used to think 55+ communities were the only places we could find new construction open concept ranch plans - not true everywhere.

We’re finding many production builders are now offering neighborhoods with a mix of two stories and ranch models (very similar to 55+ floorplans) and marketing them as active adult communities with NO age restrictions. There are lots of new ranch homes in mixed gen developments in major cities - check the websites of CalAtlantic/Lennar, Pulte, Bonterra, Toll Bros, David Weekley, Ryan, Meritage, MI Homes, etc.

[Another Reader]

Quote:

Originally Posted by karen1972 Like all things location, ammenities, etc will play into it. I've been looking at a 55+ community even though I'm only 46 and annoyed I can't buy in.

Many of these communities allow some percentage of people 45 and older. Check with the specific community's management to see if that is possible there.

[zinger1457]

Quote:

Originally Posted by 4legsgood I'm interested in this topic too. You could look on zillow for changes in the zestimates in the the community. I'm sure some communities are better positioned for increase in value. Trulia reports this, for the very large 55+ community of Sun City AZ: "Real Estate Data for Sun City Sun City market trends indicate an increase of $14,000 (9%) in median home sales over the past year. The average price per square foot for this same period rose to $121, up from $107." I don't know if that's a long term trend, and might be due to new construction, but my sister's place there has definitely gone up in value probably 25% over the last 4 years (cumulative).

I think much of the greater Phoenix area is still in the recovery phase after the market crashed more than 10 years ago. That area was hit very hard and many of the homes are still valued less than they were before the crash. I guess the good news is that the market, as you noted, has been doing good (prices going up) but there has been talk of another potential market bubble again, not sure if it's valid or not.

[audreyh1]

Quote:

Originally Posted by karen1972 Like all things location, ammenities, etc will play into it. I've been looking at a 55+ community even though I'm only 46 and annoyed I can't buy in. The major reason is the homes are designed WAY WAY different and would be ideal for a couple with no kids that love to entertain and cook, but I guess those only exist if your 55+ according to builders. Also the amenities are just amazing, its just a massive resort with everything one could want and more. However, like all things, its the amenities that scares me too, will they keep it up, how costly will it become, if they don't keep it up how badly would that hurt property values. The only two things I think that would hurt this community is 1. the cost of HOA and 2. if they started building identical homes elsewhere so you didn't have to buy into the community... but talking to builders that isn't happening anytime soon.

Have they told you you can’t buy in? It’s not 100% required. Maybe 95%?

[karen1972]

Quote:

Originally Posted by Midpack You might want to keep looking. We much preferred the ranch floor plans in 55+ communities, but we’d much prefer a mixed generation neighborhood. We used to think 55+ communities were the only places we could find new construction open concept ranch plans - not true everywhere. We’re finding many production builders are now offering neighborhoods with a mix of two stories and ranch models (very similar to 55+ floorplans) and marketing them as active adult communities with NO age restrictions. There are lots of new ranch homes in mixed gen developments in major cities - check the websites of CalAtlantic/Lennar, Pulte, Bonterra, Toll Bros, David Weekley, Ryan, Meritage, MI Homes, etc.

Quote:

Originally Posted by Another Reader Many of these communities allow some percentage of people 45 and older. Check with the specific community's management to see if that is possible there.

Quote:

Originally Posted by audreyh1 Have they told you you can’t buy in? It’s not 100% required. Maybe 95%?

I checked, they said you have to be 50+ to buy in and ONLY if its new construction; otherwise it is always 55+. I was surprised too they were that strict as many other places do allow more flexibility.

As for looking for other homes, yes I've looked at all new construction and been to pretty much every parade of homes location in the last 3 years. There was homes we would like but they are all out in super rural areas where we would never live (like 45 minutes away from anything). I grew up in the country, I know I hated driving 15 minutes to find a gas station... no thanks, not for me.

[imoldernu]

Seems to me that the value depends on the kind of community selected.

We'e very satisfied in our Liberty Village CCRC. We bought in 2004 and paid $140K for our 1500 s.f. home which was built in 1999. It's a regular home but part of the all services community. We have 79 villas, 60+ independent living apartments, 40 assisted living apts, a rehab center, a fitness center, a 60 bed nursing home, and a newer separate memory unit. While our town is in a lower income area, and the average housing values are lower... $131 versus $461 in Naperville Il (83 miles away)... the lower value is largely since Peru is a much older town. Median HH income is $56K vs. $116K in Naperville.
The current Zillow average selling price for our home is $180K.

Now, here's where the selection of retirement communities is important. As of now, there is only one home like ours for sale, and they're asking 190K. Usually homes turn over by word of mouth when a resident moves from a villa to the apartments.

Our community is just one of 25 communities under the same corporation. We've been to two other of these communities and find the both to be very similar to ours, though some without as many different types of housing.

For those who are new to this, you will probably find vast differences in the term 'over 55". When we lived in the over 55 community in Florida, it was just manufactured homes in a gated community... and a totally younger and much more active community. No "aging " services. For us it was not a mistake, as we were very active, but when we saw the "you're getting older" writing on the wall, we decided to opt for longer term services. We looked at similar Florida full service communities, but they were beyond our ability to pay over the long term.

FWIW... our current basic ongoing house related annual costs are $2500 taxes, $1800 for HOA exterior services and association related expenses. We are not a gated community, so the taxes and home ownership are not governed by the named community. We own the same way as any city home owner. The transfer to the other support services are determined by whatever the contract calls for, but we are guaranteed to be first in line for available services. Current advanced services are substantially lower by about 25 to 35%, than most greater Chicago costs, 90 miles away.

Am sure there are lower cost retirement communities to be found, but this offered more than the 7 or 8 communities that we researched before buying.

We have more nearby (less than 5 mile) services than we could ever use, with all shopping less than 2 miles , and just 3 minutes to the best hospital in Central Illinois. The biggest plus for us that it's a people friendly area.
.................................................. ............................

Edit to add one more thought....
We moved into our Florida over 55 community (mfg. homes) in 1991. A gated community, and the lot rental prices determined by the owner of the park. Our monthly rent then, was $168... Current monthly rental in 2018 is $675.

[athena53]

Quote:

Originally Posted by karen1972 Like all things location, amenities, etc will play into it. I've been looking at a 55+ community even though I'm only 46 and annoyed I can't buy in. The major reason is the homes are designed WAY WAY different and would be ideal for a couple with no kids that love to entertain and cook, but I guess those only exist if you're 55+ according to builders. <snip>The only two things I think that would hurt this community is 1. the cost of HOA and 2. if they started building identical homes elsewhere so you didn't have to buy into the community... but talking to builders that isn't happening anytime soon.

It's hard to project out 20 years to when you might want to sell. Interest rates, general economic conditions demographics, all play into it. What DH and and I discovered when trying to downsize was that all the new construction not in 55+ communities was ginormous for two people and totally impractical because DH was developing balance issues and stairs were becoming a problem. We were selling a place on 3 floors (including finished walk-out basement) with 4 bedrooms (only one on the main floor), 3 full baths and two half-baths plus a pool and gardens that needed constant weeding. The segment of the population now in their 40s and 50 will eventually want to downsize for the same reasons we did and 55+ communities, which typically have homes with smaller footprints, many on a single floor, and most outside maintenance included, should still be an attractive option.

[Cobra9777]

My in-laws live nearby in a 55+ community. Values there are sky-rocketing. They bought in 2011 for $200K. Identical houses are now selling for $300-325K. Most of that increase happened in the last 3-4 years. Demand is very strong with lots of new construction as well. It's a newer community with tons of amenities. They just started the 2nd golf course and are expanding many of the other facilities.

I agree with prior comments that baby-boom demographic trends are probably driving the strong demand currently. I just looked at some population distribution projections at census.gov that showed the following trend for ages 50-69 (today's baby-boomers, and my guess at the target market for 55+ communities going forward):

2012 75M
2015 79M
2025 81M
2035 79M
2045 87M
2055 93M

The growth of this age group flattens out over the next 20 years, but because of projected survival rates, it starts increasing again after that. Of course, the other variable is the market penetration in this age group and whether that is projected to grow or not. I have no idea, but my sense is that 55+ communities are becoming more popular. In any case, the overall demographics suggest that the valuation trajectory my in-laws have seen since 2011 will likely moderate... probably more in-line with overall trends for the locale, economy in general, etc.

[Midpack]

Quote:

Originally Posted by karen1972 As for looking for other homes, yes I've looked at all new construction and been to pretty much every parade of homes location in the last 3 years. There was homes we would like but they are all out in super rural areas where we would never live (like 45 minutes away from anything). I grew up in the country, I know I hated driving 15 minutes to find a gas station... no thanks, not for me.

Fair enough since we have no idea where you are. But I gave the names of 8 builders who are building new energy efficient open concept ranch homes in suburbs (not rural) in developments without age restrictions for those on this thread who think they have few choices aside from 55+ communities. A simple search on any of the builders websites I named will show where they are, what models and what price points. We were surprised when we looked a little harder. We almost bought in a 55+ community - thank goodness we didn’t. YMMV