(The following blog was written by Terence O’Malley, a senior living presenter, elder law attorney and certified aging services professional with decades of experience, and is used here with permission from GlynnDevins.) Between the years 2010 and 2030, 77% of all housing demand will be for people age 65-plus (See Housing and Demographic Trends are Changing: How Our Cities Will Develop by Maria Saporta quoting Chris Nelson, director of the Metropolitan Research Center at the University of Utah.)
In many areas of the country, there will be a shortfall of senior living residences as older Americans trade down to a smaller home or begin renting, according to Nelson. “The net new demand will be for rental housing,” Nelson says. “We are not going to build apartments fast enough to meet demand.”
In a study of 1,300 Coldwell Banker real estate agents cited by CBS, 80% of agents observed that homeowners at the upper end of the Boomer age spectrum would like to trade down for a smaller home, preferring condos or townhomes with less maintenance and upkeep requirements.
That could potentially result in a glut of used single-family homes on the market. Nelson calls it the “Great Senior Sell-off,” when 59% of those seniors who sell their homes become renters.
If the Great Senior Sell-off actually occurs, it obviously would have a measurable impact on house values, as single-family home prices would in theory decline, while apartment or community living would increase, i.e., become more desirable and thus more valuable.
“Housing is directly tied to a person’s physical or psychological well-being, which is why having a living situation that fits one’s current level of physical and cognitive ability and anticipated future needs is essential,” according to the Profiles in Aging report by Legg Mason, a financial services company.
I’ve met a lot of seniors who several years ago made the move from a house to a condo or townhouse, simply because there is less maintenance. Many of those same people are now confronting having to move yet again, because they want to situate themselves where they can continue to thrive, yet have the services available to meet their needs as they grow older. Their desire to move is accompanied by the lament of having to go through the moving process all over again.
CCRCs offer the economic efficiency of having all services in one location
A (Senior) Housing Options Service Comparison Overview chart provided by Legg Mason really drives home an important point: The only senior housing that provides all levels of senior living is a continuing care retirement community.
So, if you are a senior considering downsizing from a house, you have to challenge the wisdom of moving into a condo or townhouse only to have to make yet another move.
Without doubt, physical limitations increase with age; some 41% of Medicare enrollees at age 65 or older report a functional limitation of some sort. (Federal Interagency Forum on Aging Related Statistics: Older Americans 2012: Key Indicators for Well-being, p. 32.)
Rather than move somewhere from which you’ll likely have to move again, why not move into a community that provides all facets of a healthy and enriched lifestyle designed to maximize the positive elements of aging?
Monthly costs of housing favor CCRCs when it comes to assisted living and skilled nursing
Another instructive chart provided by Legg Mason is its Cost Comparison of Senior Housing Options, which takes a look at average monthly costs at different community types nationwide.
First, recognize the relatively small difference between the average monthly cost of living at an independent senior living community and living independently at a CCRC.
There typically is no medical component built into the pricing of communities where there is independent living only. So while you may save a little bit early on, you’ll pay more if you require additional levels of care.
Look next at the difference between assisted living at a non-CCRC community versus a CCRC. It’s actually less expensive to have assisted living provided to you at a CCRC than it is elsewhere. The potential care needs are built into your contract pricing when you first move into the CCRC.
Lastly, compare the cost of skilled nursing at a CCRC versus the cost of skilled nursing somewhere else. It’s nearly 13% less expensive to receive skilled nursing at a CCRC than it is at some other facility (using semiprivate room rates).
Therefore, it becomes quite obvious to those searching for senior living options that there’s a noticeable savings on assisted living and skilled nursing at a CCRC versus the cost they might pay for those services somewhere else.