June 1, 2010

The Best Buying Opportunity For Senior Housing

danBy Dan Dolan
Dan Dolan Homes

Some thoughts on why this may be the best buying opportunity for senior housing to be available for a long time‚ – and what to do about it.

My building materials supplier recently told me prices are NOT dropping any further and there’s evidence of increases in the offing.

My suppliers of electrical, concrete, heating and related services have indicated they are at rock-bottom pricing.

And when last I looked, land prices are not declining. On the contrary the prices of quality, buildable lots in desirable and convenient locations are stable at best with hints of rising.

Mortgage rates? They are still at rock bottom levels and the signs are for steady increases for as long as the eye can see. Even for seniors not planning to finance their homes, buyers of their current home may be looking to finance their purchase and Quad Cities banks all say that they are open for mortgage business. For qualified buyers the climate is
certainly favorable.

The current inventory of preferred new senior-friendly homes is favorable and growing. Seniors generally gravitate to newer homes because newer homes generally incorporate the lifestyle amenities that seniors want including everything on one floor, wider doorways, stepless entry, step-in showers and yard maintenance. During the recent
economic downturn some builders held off on new construction preferring to wait for the turnaround. However, those builders who continued with construction have an array of homes at favorable prices. At Dan Dolan Homes we anticipated the turnaround months ago so we kept building. For instance, in Davenport we now have homes in the $180s to the $270s. Our additions in Muscatine, Blue Grass, Clinton and Iowa City are similarly positioned to fill the needs of senior home buyers.

At Dan Dolan Homes we’ve been promoting the Reverse Mortgage for Purchase that was approved by Congress just a year ago. For many seniors we believe that mechanism represents a viable option because it allows buyers to move in after just a one-time down payment with no further mortgage payments ever. In our view, the Reverse Mortgage for Purchase provides seniors with a fixed housing cost for as long as they remain in the home. For instance, a buyer age 76 can buy a $200,000 Dan Dolan home for an estimated down payment of $78,000 with no further mortgage payments ever. By contrast, independent living in a large high-rise facility can range from about $3,000 a month to maybe $6,000 a month. At that rate, seniors could spend $100,000 in a relatively short period and the “meter” would still be rolling!

I hear from seniors every week at my open houses that “There’s no place like home.” We believe that the 2 bedroom, 2 bath homes with 2 car garage that we offer represent the best of all worlds. With the help of a Reverse Mortgage for Purchase the cost of living is predictable and any cash proceeds from the sale of an existing home can be saved for a “rainy day” or used for travel and enjoyment.

We believe that the current cost dynamics of senior housing are very favorable. Moreover, all our homes in Davenport qualify for the Davenport Now incentive that could yield some $5,000 or more in up-front tax incentives. As usual, our Realtor staff is available weekends at our various Saturday and Sunday open houses in the area. For hours at the various locations call me at 570-1460 or call Don Gibeault at 650-8007.