Open a paper, turn on the TV, or while you're surfing the internet you'll see an article about real estate. Everyone has a prediction about when the real estate market will turn around and no one seems to agree. Let me introduce you to my simple math: In areas of Minneapolis and St. Paul we have about 11 months of inventory on the market. I suspect it will take at least 8 months before we start to see home prices begin normal appreciation (3-7% per year) again.
This conversation bores me. It's like hearing the same song on the radio over and over again. It's much more interesting to talk about what will happen to the housing inventory with the demand baby boomers will place on the market. Perhaps I think this conversation is so much more interesting because there isn't really anyone talking about it. It's a good thing I don't mind talking to myself!
The real estate market today is the result of a number of historical events that developed into the perfect storm. I'm starting to wonder if there is something parallel happening with the senior housing industry. There is a widening gap between what my baby boomer clients say they want, and what is available on the market.
Disclaimer: My observations about baby boomers are in no way meant to apply to the entire baby boomer cohort. These are my observations of working with elder clients and their adult children with their housing needs. Perhaps the clients I work with are the exception (they are exceptional) to the large scale, expensive market research studies the senior housing industry has conducted. Whether my clients are the exception or representative of a larger segment of boomers there is a segment of boomers clamering for something "different" than what the senior housing builders are providing.
Nursing Homes-We don't want you, but we need you
We all dream of a day nursing homes disappear. The paradoxical truth will remain that as medicine advances and keeps us alive longer, we will outlive the capabilities of our bodies, and many of us will need 24 hour nursing care. While it may look much less institutional than today, they will still exist in one form or another.
I don't want to live with old people
Baby boomers are saying they aren't too keen on age-segregated housing. Yet, I look around at the new construction of the large senior housing companies and they are flooding the market with 55+ housing and assisted living communities with more amenities that a gold crown resort.
I don't want to be put out to pasture
Baby boomers want to stay viable and active in their communities. They have a second half of life filled with new opportunities that won't center around shuffle-board. If baby boomers continue to live full active busy lives, will they have time to use the indoor putting green, wave pool and party room in the age segregated housing they don't want to live in?
I want to live in "MY" community
If builders can figure out a way to package and sell a community instead of a brick and mortar senior housing structure bloated with amentities boomers won't use, they'll make a mint!
We are already seeing the first grass-root efforts to define age friendly communities. In Minnesota, St. Louis Park has the Naturally Occurring Retirement Communities (NORCs), and Monterey is the first co-housing community in the Twin Cities and there are others underway.
I'm just a real estate agent who specializes in helping elders with senior housing options. I'm not an economist. But I'd like to know...what will happen with all of the new assisted living structures that are being built, if boomers don't want to live in them?
Other Articles:
Real Estate Investors, Give Those Baby Boomers What They Want
5 Pitfalls of Looking for Elder Care and Senior Housing on the Internet
Senior Condominium vs. Senior Cooperative, What's the Difference?
Great piece. This is the kind of information everyone needs. If you actually talk to people, you find out exactly what you need to know.
Posted by: Rhea | January 30, 2008 at 08:40 AM