Tiday Waves
Immediate outlook grim, but as boomers age and retire, housing boom should follow

by Courtney McLaughlin

What actions you’ve taken in light of the present economy depends on how many candles you blew out on your birthday cake this year, says an AARP survey.

Those 65 and over are less likely than those between the ages of 45 and 64 to have taken more serious steps to cope with the slowing economy, reported the May 2008 survey. While some of those in their mid-60s may be no better off financially than the younger set, they are more likely to be on fixed incomes and forced to make budget conscious decisions prior to the downturn.

Twenty-four percent of respondents 45 to 54 years old said they had postponed plans to retire, compared to 19 percent of those 55 to 64. Only five percent of respondents 65 and older included delaying retirement in response to the slowdown. At 81 percent, most respondents agreed the economy is in fairly bad or very bad condition, with 75 percent saying it is getting worse.

While the immediate numbers are dismal, boomers will continue to retire in record numbers. Many of 55+ boomers/ retirees have the assets to weather the storm, which most financial experts predict will ease by the third or fourth quarter of 2009. These relocating could offer a boost to local economies, say experts. The communities most prepared to welcome them will ultimately enjoy the biggest benefit.

Dream On Hold
Hilton Head Island is 20 miles north of Savannah, Ga. and 95 miles south of Charleston, S.C. With 12 miles of beachfront along the Atlantic Ocean, the island is popular with retires and vacation homeowners.

“We haven’t seen a lessening in the demand or desire to move to Hilton Head Island for retirement,” says Charlie Clark, vice president of communications for the Hilton Head Island-Bluffton Chamber of Commerce. “Many retirees and those getting ready [to retire] purchased their homes long ago with the intention of retiring here. What we have seen are folks having difficulty selling their properties elsewhere.”

Re/Max Island Realty Realtor Kat Gardner agrees. A couple she’s working with from upstate New York had long planed to move to the area, but the price they could have fetched for their current home several years ago has decreased. So now, like many others, they are waiting it out. “For many retirees, two mortgages are out of the question and many do not want a mortgage payment at all,” says Gardner. “Hopes and dreams for these people are on hold until the housing market recovers and homes begin selling again.”

Others are simply making adjustments without delaying retirement by purchasing less expensive homes or exploring different mortgage options.

Making Do
Charmed by its quaint, small town feel and close proximity to the University of Mississippi, Lynne and Trammell Wells moved to Oxford from Memphis in 2000. “They started talking about Y2K computer problems, and I said ‘I can solve mine’,” laughs Trammell, age 66. Despite economic concerns, they are enjoying every moment of retired life. “I’m as happy as a pig in slop. We are living a dream.

They attend Ole Miss athletic events, are active in the Oxford Newcomers Club, go on travel “quests” with friends, serve on boards and committees and are riding out the economic storm like everyone else. “You plan for your retirement and do everything you can to make it as safe as you can, then you look at your portfolio and it’s not like it was,” says Lynne, age 61. “We are here and we’ll make do with what we have.”

After living in Atlanta for 27 years, Dan and Carol Jackson became permanent residents of Sea Pines in Hilton Head Island, S.C. in 2002. “We knew we didn’t want to be in Atlanta driving in that traffic and we had a strong preference to be in this part of the country,” says Dan, 70, a former consultant.

Both Dan and wife Carol, 69, grew up in Philadelphia with fond memories of visiting family in the South Carolina Lowcountry and nearby Savannah, Ga. After a family vacation in 1969, both Dan and Carol’s parents purchased property on the island. The couple now lives in the home Carol’s mother built in 1970.

Their idyllic location means lots of family visits, including Carol’s 95-year old mother who resides at The Cypress During his ‘retirement,’ Trammell dabbled in politics running for County Supervisor, District 4 in 2007. He was an unknown, but received a fair amount of votes. Kat Gardner of Re/Max Island Realty Retirement L 18 ifestyles™ | February/March 2009 community on the island. This past Thanksgiving they had 22 at the table, including their three children and nine grandchildren. There was much to be thankful for. “There’s not a retired person living on this island who has not had a jolt in finances in the past three months,” says Dan. “With some of the bumps in the road in the past six to eight months, it has everyone looking closely at what they’re doing and how they are doing it.”

Seizing An Opportunity
Christy Knapp, vice president of the Oxford-Lafayette County Economic Development Foundation, Inc. and director of Oxford’s Retiree Attraction Program, recently spoke with a retired couple in Minnesota. “We have to get somewhere warmer,” they told Knapp. After learning about Oxford - its climate, attractions and incentives for retirees - the couple is planning a visit this spring.

That story is typical of what Knapp hears in her role as Retiree Attraction Program director. “We’ve relocated over 600 households here in the last few years of our program,” she says. Those move-ins have equaled close to $200 million in assets for the community. That big dollar impact did not happen by chance. Oxford’s Retiree Attraction Program began in 1992 and works in tandem with the statewide initiative highlighting 21 Mississippi cities selected as great places for retirees to live.

Knapp feels most retirees are sitting tight given the current economic situation, she also feels that many are taking stock of their current financial situations and researching the possibility of relocating to less expensive areas in order to preserve more of their retirement nest egg.

The state offers plenty of incentives for buyers to make the move to the Hospitality State. With no state income tax on retirement income and a break in property taxes for those with primary residence there, it’s easy to see why almost 20 percent of Oxford’s population is 55 and over. “We felt like Oxford was a place we could promote and get people to move here and it has been one of the best decisions we’ve ever made,” says Knapp.

When the Dam Breaks
Gene Warren is spreading a little sunshine around about the economic situation. President of Thomas, Warren + Associates with 33 years as a professional economist, Warren says the upcoming tidal wave of retirees could spark the next housing boom. The oldest of the baby boomers will start turning 65 in 2011,with the last of them celebrating their 65th birthday in 2029. In the next 20 years, more than 15 million baby boomers will move to a new state. “Even if you take the most pessimistic number, housing units are going to double in the next 20 years,” said Warren.

While some retirees will set up camp in more traditional retirement Mecca’s like Florida and Arizona, others will stay close to home and, in doing so, boost sagging economies. “It’s going to be a housing boom not just in the South and West, but also in the Northeast and Northwest,” he continues.

The word of the day is opportunity, encourages Warren. Cities and towns prepared for the influx of retirees stand to benefit in spades. In other words, ready or not, here they come. “One of these days, this dam is going to break loose and all this pent up demand for housing is going to start. People are going to have a hard time building fast enough.”

Sticks and Bricks
Builders and developers of 55+ communities are heeding the call and trying to get the word out that this is still a great time to buy.

“So far we’ve weathered the economic storm and have experienced little or no change in the number of new homebuyers or the number of resident sales in the past 24 months,” says Avatar’s Richard M. Woodley, vice president and general manger of Solivita, an active adult community builder.

Mark O’Brien, vice president of sales for Pulte Homes and Del Webb, says lower mortgage rates and renewed interest in reverse mortgages are encouraging buyers to make a move. “Like all builders we are scaling back the level of inventory we are putting on the ground during these more challenging times,” he says. “We are seeing fewer shoppers in the market. However the visitors we are seeing are very serious buyers that are taking advantage of record low interest rates and pricing at 2004/2005 levels. Bottom line: It’s a great time to buy your retirement home even if you have wait to move in to it.”