Recently I read two different views on how the economic down turn may affect senior’s choices about moving to continuing care retirement communities (CCRCs).

From SeniorNews.net , a story by Jean Van Ryzin: Upside to a Down Economy: Prospects are Ready.

This article is a rosy look at how the troubled economy may actually be an opportunity for the CCRC industry. The article is an interview with Cathy Martin, President of Hamlyn Senior Marketing, a consulting firm working with CCRCs around the country. She suggests moving into a CCRC might be more financially sound than keeping money in the stock market for some older adults.

Martin states that seniors who can afford considering CCRCs with a $250,000—300,000 entry fee (90% refundable) are starting to view their money as safer there than in the market. She says;
“Throw in the life care and why wouldn’t you do it? If you’re sacred about your money, what better, safer way is there to protect it?”

“There’s a lot of hand-holding involved, but salespeople who have a good relationship with their prospects are selling like crazy.”
-Cathy Martin

Martin often uses a financial service expert to give prospects a presentation outlining the economic advantages of moving to a CCRC. The financial expert asks people, ‘how many of you want to stay in your own home … how many of you want to see your assets depleted by a nursing home?’ Then explains that with life care, you have your own home, you stay there until the end of your life and the healthcare is right there.

According to Martin, many agree with the logic and are ready to move, but there is still the challenge of selling their family home in a rough real estate market. CCRCs are finding they have to offer substantially more help to retirees who need to sell.
Incentives might include:
Competitive market analysis
Appraisal of prospect’s home
Drop the entrance fee by the same percentage that housing prices have dropped in the area
De-cluttering the home for a ready sale
Staging and packing

As part of some senior-living community’s move-in incentive packages, services such as those offered by businesses like Byron Home are provided. They do everything including; finding the right realtor, staging a house for sale, downsizing, moving, setting up, and organizing the senior’s new living quarters.

The two themes of the article seemed to be:
1) CCRCs can be a safe alternative for assets that would otherwise be in the stock market during risky economic times
2) The economic down turn is an opportunity to take advantage of incentives now offered to buy into CCRCs

————

From the Metropolitan News-Enterprise an opinion piece by Ted Ruhig: Aging in Place is Becoming More Poplar.

The opening two lines suggest a different perspective: The current recession is having a severe impact on the goals of many seniors. In particular, the goal of retiring to a “retirement village” is being sorely tested as seniors are hit especially hard by rising prices and the stock market plunge.

Ruhig reports that about 1.1 million households last year could be found in active adult settings for seniors. He notes the number is down from the 1.8 million more than 5 years ago, but it still represents a large number of older adults.

He also says the number of seniors living in such communities is predicted to shrink considerably more. The reasons he gives are; 1) employers cutting back on or eliminating the retirement bonuses that pre-retirees planned on to help invest in senior community living, 2) shrinking home equities decreases the pool of asset money to make down payments or monthly service charges when they settle into retirement communities.

In the article Ruhig notes the Dallas Morning News reported that senior-housing experts don’t have hard numbers on the retirees remaining in their homes because of the depressed economy, but retirement community executives agree that it is becoming a “regular predicament.”

As we see on the news condos from Florida to Arizona sit idle as potential buyers are “stuck” and unable to sell their homes and relocate. He notes that especially susceptible are the CCRCs to the housing slump and financial crisis because they often require new residents to make refundable entrance deposits of hundreds of thousands of dollars.

A side effect is that “age-desegregation” (allowing those under age 55) is going to be an economic necessity and pose challenges like more crime and increased taxes for schools to support kids. This is a threat to some and welcomed by others.

In addition, views of retirement communities are shifting for Americans and are yet another challenge to CCRCs. A recent survey by AARP, reported in the Wall Street Journal, found nearly 9 in 10 respondents said they don’t want to move, and prefer aging in place. Ruhig ends his article with a statistic of 60 percent of all home remodels involve some kind of age-related modification—and that aging-in-place renovation was one of the bright spots in residential construction for 2009.

He closes with a thought about how aging in place may help “put the brakes on aging” and cites The Los Angeles Times report about seniors living on their own and having a better quality of life. “Aging in place may very well be the chosen way in the future.”

Two views from different perspectives with points on each side to consider. I will admit my bias is for aging-in-place in the community. And to Mr. Ruhig, I say, the future is here.

 

See

 (photo guardian.co.uk)

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