NAHB Finds Seniors Housing Developers More Keen on Apartments than Condos

Washington, D.C.–The National Association of Home Builders (NAHB) has released its 55+ Housing Market Indices for the second quarter, and the verdict is in: builders of seniors housing feel far more warm and fuzzy about development and demand in the multifamily rental market than sales in the multifamily condominium market.

As per the study, builders’ year-over year expectations for condo sales within the upcoming six-month period remained flat, scoring 10 on the index. The apartment sector is a different story; the numbers indicate a glaring distinction between builders’ view of the condo market and their sentiment toward the rental market. Their expectations for demand for apartments within the upcoming six months jumped from 30 in the second quarter of 2010 to 44 in the second quarter of 2011.

“There is always a motivation for 55+ apartment properties,” Paul Emrath, vice president of survey and housing policy research with NAHB, tells MHN. “The carefree-ness and maintenance-free lifestyle always pops up at the top of the list; it drives a lot of what goes on in the 55+ market.”

Many of the factors that have put a damper on the general population’s interest in condo purchases are the same factors that have held a significant percentage of seniors back from buying. Tepid confidence in the economy, low appraisals when selling existing homes and strict mortgage lending criteria all conspire to diminish activity in the market.

“Baby boomers are more likely to be impacting the single-family and condo markets, if they behave the way they typically have,” Emrath says. “The homeownership rate traditionally has been very high for people in that age bracket. However, things are changing now that the home ownership rate is lower overall and these people have trouble selling existing homes. But I don’t know that that impacts the 55+ segment much [more] than any other homebuyer looking to change residences.”

Regardless, the study’s statistics for both condos and apartments are low. “These are indices that go from 0 to 100,” he notes. Numbers at 50 and above indicate that more builders view conditions as good rather than poor. The multifamily housing market has a long way to go.