Housing slump has some seniors uncertain

At 76, June Paterson is ready for the next phase of her life, one that doesn't involve caring for a five-bedroom house on a 11/2-acre lot in Concord Township.

But the sluggish housing market has left her in limbo for more than a year now, unable to raise the cash she needs to move to a nearby retirement community and tired of living in a house dressed and cleaned to sell - missing so many of the less-tidy possessions that made it feel like her home.

"It's terrible. It looks like nobody lives here to my eye," said Paterson, a gifted gardener who still has the spunk to drive alone to her son's house in Georgia - in one day.

She chafes at her real estate agent's admonition to leave her countertops bare. "I can't find half the things I know I own because they've been put away," she said.

Experiences like hers are putting a crimp on senior housing developments, many of which require upfront entry fees of hundreds of thousands of dollars that residents typically pay with the proceeds from the sale of their homes. Managers of independent-living facilities say they are delving deeper into their waiting lists to find new residents because many prospects do not want to risk selling now. Some managers report that smaller units are becoming more popular.

"We are starting to see where people are becoming content with a small two-bedroom if it's a couple and definitely a one-bedroom if it's an individual," said Lorraine DellaFranco, senior vice president of sales and marketing for Martin's Run, Media. Residents still want their Corian counters and bamboo floors.

Even people who need assisted living, which provides more medical care, are delaying the move, some industry leaders say.

Meanwhile, the credit crunch has put a stop to many expansion plans. Sunrise Senior Living, a large company that focuses on assisted living, has stopped new construction.

To get people in the door, housing companies are offering financial incentives to potential residents and their real estate agents, deferring the entry fee until the home is sold and helping with the sale. They have stepped up efforts to make the move as smooth as possible, including offering help with packing and unpacking.

Erickson Retirement Communities, which operates nearby Maris Grove, has been holding a large, two-bedroom apartment for June Paterson since June of this year. The company went nationwide this year with a new realty division that helps would-be residents find a successful real estate agent, get rid of extra stuff, stage their homes for quicker sale and map out how much furniture they will need for the new place. Erickson developed the program in Detroit, which was on the leading edge of the economic downturn.

Retirement-center officials say houses are still moving, albeit more slowly than they once did, if they're in good shape and priced properly. Sellers in this area are having much better luck than those in more depressed states.

Housing experts say the type of facility most affected by the downturn so far is the Continuing Care Retirement Community or CCRC, places like Maris Grove that combine independent living, assisted living and nursing-home care. In some cases, residents are guaranteed any kind of care for the same monthly fee - that's in addition to the entry fee - as long as they live. In pay-as-you-go models such as Maris Grove, the monthly payment rises when people need assisted living or nursing-home care.

Depending on the facility, all or some of the entry fee may be refundable when a resident leaves the community. The centers usually provide residents, who typically sign up in their late 70s, with some meals and medical care, plus a host of recreational activities.

Maris Grove is a posh community near the intersection of U.S. 1 and U.S. 322. Opened in October 2006, it already has 950 residents and is still under construction. It offers a rich, climate-controlled world complete with restaurants, a medical center, pool, bank, billiard room, 350-seat performing-arts center, even an in-house TV station.

The cost to get in is $147,000 to $500,000, and monthly fees range from $1,400 to a little over $2,200.

June Paterson, who lost her pilot husband - she met him while taking flying lessons - in 1990, still feels perfectly capable of living in her house but does not want to risk being a burden to her four children.

She put her 43-year-old house, which has a large in-law suite addition, on the market in April 2007 thinking it would sell in six months. She is on her second real estate agent now - one that Maris Grove helped her find - and her third price: $397,500. She had initially hoped for $450,000; two years ago a neighbor sold for $476,000.

"Frankly," she said, "I can't afford to drop [the price] any further because then I can't afford the apartment I'm signed up for at Maris Grove," she said.

She was offended when her first agent referred to her antique china and handblown glassware as clutter, but has dutifully spent much of the last year sending truckloads of stuff to her children, to charities, to auctions and to the landfill.

Suzanne McAllister, Maris Grove's personal moving consultant, has visited many times to assess the home's marketing. She paid to have the windows washed and has recommended people to help Paterson downsize.

"It looks great now," she said of the house. "It's a great house and I do think her house will sell."

Meanwhile, Paterson said, "I wait, and I wait, and I wait. Until they say, 'Sorry,' or until the house sells, I'm stuck."

McAllister, a former real estate agent who started working for Maris Grove in June, has made more than 100 visits already to future Maris Grove residents. Downsizing is the big worry. McAllister uses a magnetic board to show them how many of their things will fit in the new place, which gets them started. She sat with one recently widowed man while he sorted through sympathy cards. After that, he was able to throw things away by himself.

Many of her clients have beautiful hardwood floors beneath their not-so-desirable carpet, a big plus. She sometimes suggests new artwork. The seniors are partial to oil landscapes, but younger homebuyers prefer something a little less formal. Old wallpaper often has to go and dark paneling may need a coat of light paint. It pains her older clients, but she thinks family pictures are a bad idea because they make it harder for buyers to envision themselves in the house.

People who follow the advice are still selling, she said.

Larry Minnix, president and CEO of the American Association of Homes and Services for the Aging, said vacancy rates at CCRCs had dropped about 4 percentage points, to 93 to 95 percent. He says he knows of no companies that have failed and thinks the industry still has a strong future.

"There's plenty of aging out there," he said.

Some companies have even started providing home care, a way to cater to the 90 percent of seniors who do not move into retirement communities. "You're going to see a lot of innovation that comes out of this," Minnix said.

Two months ago, Kendal-Crosslands Communities in Kennett Square began allowing people to defer entry fees until their homes sold. "We find that that's actually been a very powerful incentive," said Phil DeBaun, executive director. ". . . It's really given people a boost of confidence."

ACTS Retirement-Life Communities, Inc., a Montgomery County company that operates 19 CCRCs on the East Coast, is trying everything from direct payments of $2,500 to real estate agents who sell prospects' homes to moving expense money to lower entry fees. The deals are better in Florida, where the real estate market is much slower.

David Brewer, director of sales, said ACTS has to work harder to get people on its waiting lists to commit. In the old days, when a popular three-bedroom apartment opened up, he would call several people and sell it. Now, he may have to go 15 to 25 people deep.

The company has also started a "preview to lifecare" program, allowing people to rent units for a year with an option to buy later.

Kal Ramo is proof that houses can sell, even in Florida. When he and his wife decided to move into an ACTS community last spring, they sold their Boynton Beach house in two months - without any of the incentives. The trick, Ramo said, was accepting a price that seemed a little low to his wife. "I know that just about anything can be sold as long as the price is right, and that is the way I operated," said Ramo, who added that he has neighbors who still haven't been able to sell.

Verna Karpinski's house in Flourtown, Montgomery County, sold in a week this fall, proof of the value of location but not of stagers' advice. Karpinski, 86, who moved into an ACTS community in Lower Gywnedd this month, never worried about selling. "Everybody that I had talked to recently said you would never have any trouble selling a house in Flourtown Gardens and that was true."

She ignored advice to hide family pictures. "They want to see my home as I'm living here," she reasoned, "and this is part of me."