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.
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
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
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.”