Seniors Hardest Hit By Housing Bust By Laurence Harmon At Isnare.com Ezine Articles

"We are 71 and 75 years of age. Both of us have major health issues that could render us unable to help ourselves as we are able to do now, so it would be wise to move with that in mind. We think we should be considering finding an assisted living place. Or maybe we could live in a small house that is close to a doctor's offices and services. But the problem is going to be selling our home in today's market. We have a lovely brick home sitting on five acres in Northern Arkansas. It is actually prime property, but how can we sell it in this awful market? This is our predicament. We need to relocate right away while we're still able to move ourselves out. Can you help us, please?"

The continuing downturn in the U. S. housing market has impacted many of us, but it's perhaps been the most painful for those who are least able to wait for an upswing: some of the nation's seniors, whose health and personal circumstances have made them desperate to make a near-term lifestyle change.

The current housing market has especially hit seniors like Arnie and Sarah. They're looking for help, and they need it right away. These two really need to move into a senior facility, but they realize they'll need to sell their current home and use the sales proceeds to be able to do so. They also realize that, as seniors, they'll have to personally pay for most of their housing needs: federal programs, such as Medicare, are unavailable for these purposes, and Medicaid is an option only when the applicant's personal assets have been exhausted.

Arnie and Sarah, however, are most likely unaware that the costs of many retirement communities—even those with few frills--can be staggering. For example, a recent study found that the average monthly cost of a nursing home stay is nearly $5,000! This means that, for most aging and disabled seniors, their ability to move will be contingent upon the sale of a single-family home at prices that are unavailable in the current market.

Facing what is perhaps the worst housing market since the Great Depression, most seniors will find it almost impossible to find buyers for their outdated homes. And, with the current glut of unsold houses in many markets, even reducing the asking price may not solve the problem.

The clogged housing market, coupled with the over-building of seniors'-oriented housing in many metropolitan areas, has resulted in rising vacancies in these facilities—particularly in those markets where the single-family housing market is most distressed. Tampa, Florida, to cite only one example, is experiencing a 12 percent vacancy in senior housing units, up dramatically from four percent from the previous year.

Some savvy retirement-home marketers who are trying to do business in these over-built areas have turned to real estate agents to help their prospective residents to sell their existing homes. The problem with this strategy, of course, is that elders' homes are frequently antiquated or need substantial repairs and renovations in order to make them marketable. Outdated wallpaper, old appliances and poor maintenance, all characteristic of these houses, often deter buyers. In other words, these homes, which their owners logically considered would be their guarantee of worry-free living virtually indefinitely, are literally unmarketable as-is.

"The idea is that a senior has built up equity in [a] house, and this assures that they can have care for the rest of their lives," says Larry Minix, of the American Association of Homes and Services for the Aging.

A 2008 survey by the American Seniors Housing Association found that nearly a quarter of seniors haven't made any home improvements during at least the last decade, and nearly one-half reported that they won't spend money to enhance the value of their property in order to attract a buyer.

Even worse, for many seniors, just as the real estate bust has depreciated the value of their primary asset--their homes--the value of their retirement accounts has recently plummeted as well.

What about Arnie and Sarah? They're just two more victims of the disastrous sub-prime mortgage mess that has devastated the entire American economy.

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