Four years into a real estate bear market that has yet to show real signs of recovery, many seniors are unable to sell their homes quickly or at an acceptable price. This has left them unable to transition into the assisted-living facilities they need and placed more pressure on family members, who must provide care themselves or pay for care out of their own pockets while they wait for housing prices to rebound.
“We see people coming in much older and frailer because they’re taking a longer time to make the decision,” according to Donna Taylor, executive vice president for the nonprofit Arizona Baptist Retirement Centers in Phoenix, who was quoted in a recent Kaiser Health News article. “They don’t know how long it will take to sell their house, and in some cases they’re reluctant to sell because of the lower price.”
The squeeze on families is hurting occupancy rates at many senior housing communities. Nationally, the occupancy rate for continuing care retirement communities fell from 94.4 percent in the first quarter of 2007 to 89.5 percent in the first quarter of 2011, according to a senior housing trade group. At the same time, occupancy rates for assisted-living facilities fell from 90.6 percent to 88.4 percent, while rates for independent-living facilities dropped from 92.7 percent to 87.7 percent.
To counter the trend, some senior housing complexes have frozen their prices, offered move-in discounts, encouraged seniors to share units and even offered to buy their homes.
Taylor and her group have hosted seminars for seniors with real estate experts offering advice on how to pay for the care situations they require. One option is, of course, defaulting on a mortgage, but persuading seniors to consider this option has met with much resistance. “For my mom’s generation, a contract is a contract,” Taylor said. “It’s very difficult for them.”
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