Slow Real Estate Market Leaving Elderly In A Bind

Sylvia Merlin, 93, tells her story of wishing to move to a retirement home,

but finding it impossible to sell her Florida condo.

From The New York Times
November 21, 2008
http://www.nytimes.com/2008/11/22/us/22home.html

The current real estate crisis is putting many retirees in a real bind, making it nearly impossible for them to move into assisted living centers which require as much money up front as most condos cost nowadays. As they get weaker, or too sick to remain alone, there doesn't seem to be a solution.

Many have to sell their homes or condos to buy into retirement homes, and many have been on waiting lists for months. Without being able to sell, they have to remove their names from the list and stay alone in homes that may be too large, or impossible to maintain.

“It is part of the hidden problem of the recession,” said Larry Minnix, president of the American Association of Homes and Services for the Aging. “Every neighborhood, every family’s got them.”

The bind is also creating too many vacancies in the retirement homes, prompting them to bring in real estate agents to help train the elderly, would-be sellers how to market, stage, and promote their homes to sell. Sometimes they are lowering the price of the facility or apartment to help bridge the money gap until it sells. According to the NY Times, they are even providing low interest loans to help. Personally I find that a dangerous temptation, especially when the elderly often don't understand what they are signing and agreeing to.

Many retirees have moved to places like Florida or bought real estate in Myrtle Beach as a couple, and have now lost a spouse, required hip surgery, outlasted their friends, and are virtually abandoned far from their families. The government had better find a way to alleviate this problem quickly.

In some states the elderly are allowed government funded medical and assisted help in their homes, which is actually less expensive than paying for a nursing home. But even this can be a problem if they own property. When you go into a nursing home under Medicare, you are only allowed to keep enough for light spending money...I think in North Carolina it's less than $500 a month. NC and SC haven't set up a program for in-home care as of yet.


Myrtle Beach Manor

One retirement facility in Wisconsin has decided to let the new residents pay month-to-month until they can find a buyer for their home. But many retirees couldn't afford to do that either.
Some condos in cities like Delray Beach, Florida are so unsellable that the retirees are saying they are unable to find a real estate broker to list it. Thankfully, the Myrtle Beach condos market is nowhere near that point of bottoming out.

The Times says there are no statistics to track how many older Americans are in this situation. Mr. Minnix, from the Association of Homes and Services for the Aging was quoted as saying it could be a short-term stress or a crisis, at this point nobody is certain.

On average, the occupancy rates for retirement and assisted living homes have fallen around 2 percent this year, but in the worst areas of Florida and other states, it has dropped as much as 20 percent. One retirement village in southern Ohio, Bristol Village, reports that 65 percent of the elderly who have visited the facility cannot move in without selling their homes first.

According to a MetLife study, these retirement homes charge fees that range from several hundred to as much as $5000 a month. The average cost of assisted living is around $36,000 a year.

Mr. Williams of the Assisted Living Federation says that families are turning to adult day care services in the meantime. He says this is a dangerous thing if they are not able to get around by themselves.

“When they’re coming in at 85, they’re coming in very frail and needing services,” he said. “They can’t wait this out. They need the care when they need the care. That’s the scary part. You have people putting it off when they need care right now.”

Adding to the problem is the falling stock market and dwindling retirement savings of many of the elderly. Some barely make ends meet now, finding it hard to pay the taxes and insurance to keep their homes and maintain a good lifestyle.

For Mrs. Merlin in the audio interview above, 93 is a bad time to find herself in such a position. She's on oxygen now, and finds it hard to get around her condo. She needs day to day care, such as an assisted-living facility provides.

“I’m going to be 94, and I need help,” she said. “Making the bed is difficult. I need a little help taking a shower. Those things are difficult. I was a great cook, but I really don’t cook anymore. I bought the TV dinners, and they’re pretty lousy.”

No one has made an offer on her condominium, and Ms. Merlin said the retirement home had refunded the $1,000 deposit on the $130,000 unit she hoped to buy. Now, instead of moving, she said she had decided to stay.

“I just couldn’t go anywhere until I sold my apartment,” she said. “I and a lot of other oldsters are stuck.”

Read more about this in the full New York Times Article linked in the beginning of this posting.

If you are interested in retirement homes or assisted living communities in the Grand Strand, contact us through our website. We can help with that or any other Myrtle Beach real estate information you may need.

You may also want to think about the excellent retirement communities in Greenville, South Carolina. Flower Mound Texas retirement communities are a good choice for those out west.