Trouble in the age-restricted market?

From the Record:

Condos for seniors could be sold

. Hovnanian Homes, the largest home builder in New Jersey, may sell its Concierge Club, a Teaneck condominium complex catering to those 60 years old and up, the company said this week.

The division of Red Bank-based Hovnanian Enterprises Inc. is talking to several potential buyers “with special expertise in independent living,” said Randy Brosseau, area president.

Hovnanian said it has not made a final decision, but is “reevaluating” its role in the independent-living market. The move comes as the condo market continues to soften amid a broader real-estate slump. The slowdown led to a loss for Hovnanian in its latest quarter, its first decline in almost a decade.

When it opened in March 2005 at the Glenpointe development, the 142-unit Concierge Club was marketed as a new concept in senior living — offering some of the services that seniors can find in other complexes, such as a dining room, social activities and housekeeping. But most senior housing is rental, while the Concierge Club offers condos.

The units are priced from the upper $200,000s to the high $300,000s. Residents also pay monthly fees starting at $1,600 for a one-bedroom.

At the time Concierge Club was opened, Hovnanian cited market research showing that many seniors want to own, not rent. They said seniors who bought the units would amass equity that they could pass on to their heirs.

But sales in the complex apparently did not meet Hovnanian’s expectations, although the company did not disclose how many units have been sold.

After a rapid run-up from 2003 to 2005, the median price for a condo dropped 0.3 percent to $225,800 in the second quarter of 2006 from a year ago, the first decline on record, according to data from the National Association of Realtors. The condo market has been hard hit in part because many units were bought by investors hoping to resell quickly at a profit, but many investors have retreated from the market, according to real estate analysts.

But Hovnanian has been affected by the real-estate slowdown. It has had to lower prices in some communities, and many would-be buyers canceled their contracts, in part because they could not sell their own houses.

Hovnanian has also dropped plans for a number of projects in the face of the housing decline. The company walked away from $141 million in land deposits in its fiscal fourth quarter, concluding that it made no economic sense to proceed.

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4 Responses to Trouble in the age-restricted market?

  1. pesche22 says:

    These over 55 joints are all the same.
    It’s like stacking. and Wait until all
    the Associations problems start to come out
    of the woodwork.

    The Mainteance Charges are another problem.

  2. James Bednar says:

    Sorry, I just don’t buy into the no-impact scenario.

    I don’t believe a significant number of seniors are moving to New Jersey to retire. Thus, the bulk of these people are simply relocating from the surrounding communities into age-restricted housing. Why? Downsize, less maintenance, lower taxes, etc. It makes sense.

    However, who buys the 3/4 bedroom home they just sold?

    jb

  3. Andra says:

    As someone who has been taking care of her 86 year old mother (dementia caused by “mini-strokes”) for 3 years, the question I have is what kind of services do you get for $1600/month charges and how that relates to being old? Is it just groundskeeping and having a clubhouse? Its not hard at all to set up a lawn service at your own home; thats not much of a service to worry about when you are old and can’t mow the lawn. Other than that, what? I’m almost 60 and I can’t imagine myself getting involved with other people at a clubhouse; the best thing about my home is that I hardly ever see the neighbors, i.e., privacy.

    If you have dementia and can’t take care of yourself, you really can’t take care of yourself. Its a whole different set of services like grocery shopping; cooking meals; cleaning; transportation to the doctor and to an adult day center; help with bathing and washing your hair and getting dressed; etc. I don’t get the point of these expensive senior communities when you really won’t be able to stay there if you need care. Then you have to sell it.

  4. SG says:

    I was looking into one Adult community in development in Bridgewater. I was really surprised looking at recent transactions. There were at least 3 transactions in last 3 months for price of $500K+. Now these are townhouses, the biggest being 3BR ones. I can’t understand why someone is paying such a high prices.

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