Retirement Community
Home Prices

For new home development sales prices, the retirement community prices are already set by the developer and you only need compare that retirement community home prices with other retirement communities in the surrounding area yourself or with a Realtor's help to see that you are getting a good deal. Remember, include any special incentives of the community in your assessment. These incentives are abundant in the current market.

In a resale home within a regular community or a retirement community, a real estate appraiser determines what the market value of your home is if you need to apply for a home loan and mortgage.

A real estate appraiser determines your market value when you apply for a mortgage in a retirement community. If you are purchasing a resale home in a retirement community, you need to be aware that the real estate appraiser will choose comparables from within the retirement community or other retirement communities in the area.

A real estate appraiser's market value will help you decide a fair price but the appraiser isn't usually used until the sale is made so you must determine if your price is favorable before the purchase with the help of your Realtor. Be sure to compare only with retirement community sales.

Comparables are sales of homes that compare with the one you want to buy and in this case you want to make sure you compare with homes inside the retirement community or homes inside other retirement communities in the immediate surrounding area. You can go to regular communities for comparison if there are no homes for comparison in the retirement community to compare with, which is unlikely.

The point is usually sales prices of homes in a retirement community are priced differently from homes in the regular marketplace, due to different factors involved, and these are the comparables you need.

The real estate appraiser will be necessary if you are purchasing a resale property and are getting a loan. In this case he does the same thing as he would do to appraise the regular community home but in a retirement community home, the difference would be, as we have already stated and need to emphasize, he needs to compare your retirement community home with either a) homes within that retirement community are preferable or b) like homes in other retirement communities in the same area as yours. He would only compare with homes outside the community if he had no comparables within the community itself and then he would make adjustments.

You may be surprised that comparatively, the retirement community home prices seem lower than outside the community. Although this may be changing (or it may not). At the start of the baby boomers reaching age 55, retirement community home prices were extremely reasonable due to low demand.

Now that baby boomers have turned 60, there is more demand and so they have pushed retirement community home prices up. However, more recenty, due to the real estate subprime crises, values are lower in many places so prices have fallen off in many places. It depends on your local market for how much prices have fallen off.

In the current market, it is even more important to know what has actually sold more than what homes are listed for and very important to know how fast homes are selling. Some homes in some areas may actually be depreciating every month rather than appreciating. But it depends on your local market as they vary substantially. Homes in Florida or California may be depreciating faster than homes in Texas or Tennessee for instance. Please check with local Realtors and other professionals.

Retirement Communities Are Higher Priced in Cities Where Land is Scarce

There are more communities being planned to be built now but most in the urban or rural areas. Many of the earlier communities are sold out. However, the builders are having a hard time finding the land necessary to build communities. The demand within cities is high but the available land is scarce. Therefore, communities within cities are getting harder to find and more expensive to purchase. Boomers who want or need to continue working in cities may have a hard time. Boomers may also be frustrated because they cannot find retirement community homes in a lower price range within cities. Builders may consider mini-retirement communities within cities that cannot offer the luxury amenities that boomers want but due to scarce land may be more expensive to purchase.

However, in the current market, some condominium communities have been over-built in some city areas which has depressed prices even more than the single-family home market. Generally, whenever single-family home prices are depressed, it hurts the condo market more since more people have become able to buy a single-family home. So this may be a good time to look at the condo market. Please make your own decisions after consulting your advisers and professionals. As I always say, check the local market as conditions vary depending on the location in the current market even moreso.

Another problem is that there are now more luxury homes with four and five bedrooms being built in retirement communities. These large homes do not meet the need of the middle or low-income senior. Therefore, hopefully, builders and planners will be able to provide these types of properties for low income seniors in the future and conscientious efforts are being made in this direction by city planners and organizations. Read about some in our article about Long Island

Since there is available land there, communities are being built in suburbs or rural areas around major cities. City planners have to consider the impact on the environment in these rural areas. Some developers of communities are more environmentally aware than others. Generally, great efforts are being made by environmental groups, developers and planners to preserve and protect our most precious asset--the land. The amount of available land in an area affects prices asked for the homes as well as how much demand there is. It is in the developer's best interests to preserve the quality of the land because that is what helps to create the demand in the first place.

Precious Land..

Retirees do not necessarily want to move away from families so these communities will continue to be built in the highly populated midwest and eastern U.S. regions. Planning departments of cities like retirement communities because the seniors usually have a lot of money to spend and do not demand many things from the area such as schools. Therefore, these areas give builders incentives to build retirement communities there, and, due to this reason, we will see more being built. However, in some areas these communities have been over-built for the current market conditions.

Back to pricing--If you could buy when you wanted to buy as most seniors do, and without the "horserace" mentality, then you would wait until you got the price you wanted. That is what happens in a retirement community. When seniors still own their home, there is no rush to buy. This alone can account for lower retirement community home prices of resales. In the current market, many seniors are renting instead of purchasing, waiting to see if prices drop further. Also, senior buyers often put all cash down (see your financial consultant), and, therefore, again can make a faster purchase for the homeowner who may make concessions.

Look for Incentives When Purchasing

We are in a real estate market now where incentives are very popular. It's important to know what type of real estate market you are in -- a buyer's market or a seller's market. Today, depending, of course, on your area, it is a very strong buyer's market--one of the best in a very long time for buyers. Some are predicting that it may even become even better for buyers but only time will tell since no one knows the future. You must make your own decisions based on your personal circumstances. However, if you are ready to buy, look for incentives and below-market pricing in retirement community home prices because they are often out there depending on the area.

Arriving in my mail every day are incentives from retirement and other types of communities. A community was offering a free sunroom, another offered a price reduction and on and on. These incentives come out most strongly at the end of the year when communities want to show a strong sales record. Other times may be important as well for getting incentives such as model home closeouts. These are great so ask the community you are interested in about incentives.

Retirement Community Home Prices

In summary, only compare your retirement community home prices with other retirement community home prices because there will be a difference.

The real estate market is like the stock market in that no one knows the future so the above on Retirement Community Home Prices is informational only and not advice or opinion. Please consult with your local Realtors, certified financial planners, or other qualified professionals for making decisions about your money and retirement.

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