Editor’s Note: Beginning with this issue of 50+ Housing e/Source, we will publish local regional market overviews in each issue. In these overviews, nationally recognized market researchers and industry experts will analyze markets across the country, looking at existing inventory, starts and other activity for both active adult and seniors housing. In addition, the authors will forecast the future of 50+ housing with the market. These market overviews will be housed on the 50+ Housing Channel (www.nahb.org/50pluschannel). Members who feel they can offer this service, or who might be able to work with others who can, should pass that information along to Jeff Jenkins, who is coordinating and scheduling this ongoing feature.

South Florida Overview

by: Janis R. Ehlers, President, The Ehlers Group, Inc.

While tropical breezes, swaying palms, international flavors and warm temperatures continue to be the allure of South Florida, its future as a pre-retirement and retirement destination may be a nirvana for the next few years. 

“One can only imagine that if a 401-K is beaten up, the person who was planning his or her retirement may continue working for a few more years instead of retiring this year as they’d planned to do. On the flip side, getting inside someone’s head to understand how they feel about their investments is impossible," says Brad Hunter,  chief economist and national director of consulting for Metrostudy, a housing market research firm. “If they stayed conservative during the last few years and they are liquid, they might be in a position to buy stocks on the cheap and they may also have the cash to put into a nice retirement home,” he noted.  “On the positive side, demographics may be in favor of demand as more and more baby boomers reach 55 and 60.”

“The 'retirement ‘pie’ may get sliced into more pieces with competition from North Carolina, Georgia, Texas, Arizona, Nevada and the Caribbean,” Hunter added, “but the ‘pie’ is going to be so much larger over the next five to 10 years that the overall flow coming to Florida should still increase.” 

New or recent jobs:

Hunter doesn’t see many new South Florida communities in the planning stages.  Supply outweighs demand and there are many with developed lots and homes that need to be absorbed over the next couple of years.

These statistics cover the six county areas, including Miami-Dade, Broward, Palm Beach, Martin, St. Lucie and Indian River.

Within communities that are not age-restricted but attracting 50+ buyers (single-family detached and townhomes only):

• 63 homes were started in the first quarter of 2009 (down from 85 in the first quarter of 2008);
• There are 343 homes in inventory (either finished or under construction);
• There is a 10.2 month supply of inventory (7 to 8 would be normal);
• Absorption (move-ins) is running higher than production. There were 97 move-ins in the first quarter (down from 115 a year ago);
• There are only 888 vacant developed lots, down from 1,149 in the first quarter of 2008, and far below the peak of 1,496 in the second quarter of 2007.

A similar situation exists on the senior housing sector, according to Bruce Gibson, senior managing director of Senior Housing Investment Advisors. A number of development sites in Palm Beach County are moving through the approval process, but these are for assisted living and dementia care. New developments, expansion of existing CCRCs, and rehabs are on hold pending financing.    

Outlook:

On the active adult side, the trend will be investors buying back subdivisions either from banks or through foreclosures and repositioning and remarketing these communities.

There also is a percentage of South Floridians who want to remain, but desire new homes/communities and amenities. These empty nesters may migrate to urban areas such the downtowns or the neo-traditional communities that have been developed in neighborhoods from Miami up the coast. There is plenty of inventory of luxury condominiums and lofts, offering 50+ consumers all the bells and whistles, along with a lifestyle offering dining, shopping and entertainment.     

South Florida’s preponderance of older country club communities also will undergo a regentrification as HOAs accept that to appeal to the new 50+ buyers, there needs to be a reinvestment in their amenities and services. Renovation and replacement may be more prevalent if the community’s brand holds its allure.   

Areas like suburban Boynton Beach and St. Lucie had an explosion in the 1990s of active adult communities, based on their affordability, lower taxes and convenient location.  When speculation replaced affordability, these areas suffered.  With more affordable prices today, there are opportunities to buy in these areas.

“We’re seeing better absorption in age-targeted and age-restricted communities in Boynton Beach than in traditional communities, validating that some consumers desire the lifestyle of 55+ communities,” Hunter said.

What about 55+ multi-family condominiums and rentals?  The oversupply of condominiums will be the focus of the next four to five years as South Florida absorbs the overhang.

“The in-between areas — neither suburban nor downtown — which have been dormant have potential,” Hunter said. “These are areas where developers can find more reasonable land. These areas are close to jobs and in growth corridors, and for both families and 55+ consumers, we anticipate new development.”        

Gibson recommends “bringing an umbrella” for the next six months. “There should be a large number of senior community sales, new management companies in place and restructured loans,” Gibson said. “Most of the sales will be troubled assets or some type of forced sale. (Even if the asset isn’t troubled, the company may be).”

Author of Marketing Seniors Housing, a book published by National Association of Home Builders, Janis Ehlers is an active adult and senior housing specialist and has built a 30+ year career specializing in strategic marketing in senior housing.  She heads The Ehlers Group, an award-winning, national company with offices in Florida and Virginia.  Her corporate experience includes marketing positions with two major developers of active adult communities:  Levitt & Sons and Cenvill Corp.  A Certified Active Adult Specialist in Housing (CAASH), Janis is active in national and regional associations related to senior housing, and currently serves as a member of the NAHB 50+ Housing Council's Board of Trustees.  She has an MBA in real estate from Nova Southeastern University. [Return to top]