Seniors Thinking About Seniors Housing Again?

Dees Stribling, Contributing Editor

Atlanta–Independent living seniors housing properties saw a mild uptick in occupancies between 2Q09 and 3Q09, from an average of 88.4 percent to 88.5 percent, according to the National Investment Center for the Seniors Housing & Care Industry. The question now for independent living, the segment of the industry that generally serves more active seniors, is where does the market go from there?

Opinion in the seniors housing business is mixed. Some see glimmers of improvement. Others are less enthusiastic about 2010, noting that while it might not be as bad as 2009–a year that saw seniors put off their interest in seniors housing–there won’t be much improvement just yet.

Coming off five closings in November and December, Evan Cramer, development manager for Active Lifestyles Communities, is optimistic about the prospects for his company’s Soleil Laurel Canyon, a 55-plus active adult, resort-style community near Canton, Ga. “As the weather warms up and people start planning visits to North Georgia this spring, we anticipate the prospect traffic increasing as well,” he says.

The company feels optimistic enough, in fact, to begin construction on three new spec homes to be completed in May. “What I hear from buyers and prospects is that it boils down to being able to sell their existing home,” notes Mike Kinsey, New Home Consultant for Soleil. As housing markets recover, that will help propel interest in seniors housing.

Pulte Homes, which caters to active seniors through its Del Webb brand, see stable interest in its product, but not an immediate upsurge. “Traffic has remained relatively consistent,” a spokeswoman for the company told MHN. “We don’t provide guidance on our sales expectations, but I can tell you buyers remain interested in Del Webb and the segment continues to hold up a little better than the traditional market regarding cancellations.”

During Pulte’s most recent conference call, COO Steve Petruska focused on the stability of demand–all together a good thing, considering what residential real estate has been through in recent years. “We’re probably seeing a little bit slower absorption base in our Del Webb brand, although our traffic and visitor rates to communities continue to be fairly stable,” he says.

“Seniors housing activity in 2010 will be relatively flat,” Richard Donohue, managing director with Jones Lang LaSalle, tells MHN. “As with the overall residential market, it will be driven largely by the economy.”

In the longer run, Donohue is optimistic that the demand for seniors housing, including the active seniors segment, will make a strong comeback. “We see significant pent-up demand for seniors housing among those elderly who are healthy enough to make a lifestyle choice,” he says. “When the housing crisis eases, the seniors market will come roaring back.”