A difficult transition to retirement living

More Americans are postponing the day when they exchange big houses filled with memories for smaller retirement homes - waiting into their 70s and sometimes their 80s to make the move, housing-industry officials and senior-living consultants say.

There are plenty of reasons why, said Sharon Taylor of MoveAbility in Malvern, who helps older buyers prepare to change addresses: "The belief that they can manage on their own; not wanting to be around 'old' people; deep attachment to home and friends. . . . "

But, for some, there's a new bump on the road to downsizing: apprehension that their old houses won't sell.

Ernie Wortmann of Wayne admits the economy is giving him pause right now.

"Duh!" exclaimed Wortmann, 74, a retired systems engineer. After all, he hasn't sold a house in four decades.

He and his wife, Dot, 70, are rushing to get theirs ready for the market, hoping to have it sold by the time their carriage house at Freedom Village, a continuing-care retirement community (CCRC) in West Brandywine, is ready in June.

"The house is in turmoil. We started sorting through things in late November, and there is a second storage container in the driveway," Wortmann said. "We are taking up the carpeting to expose the hardwood floors and getting the house ready for staging. We are in the process of freshening up the place."

They had hoped to move by now, he said, "and still want to just trade the equity we've built in this house for the entry fee at Freedom Village," which ranges from $90,000 to $373,300, according to the state Insurance Department.

But just to get to this point, they've had to tap into what they live on, their investment income, and "now both" - the equity and the investments - "seem to be taking a hit," Wortmann said.

Still, they're in better shape than many because they have owned their four-bedroom, 3,000-plus-square-foot Wayne split-level free and clear for years. They paid $28,500 for it in 1966; the average sale price at the end of 2007 in Wayne was $486,000, up almost $100,000 from the end of 2006, data from Weichert Realtors' local office show.

Though others are not quite as well-positioned, housing economists say they don't expect the current downturn to derail the long-term movement to retirement living. The 2001 recession had only a short-term effect on this segment of the market nationwide, they said, and sales rebounded quickly.

As the housing boom was reverberating in 2003 and 2004, data from the National Association of Home Builders' 50-Plus Council show, more than 400,000 new or existing houses in the United States were bought by families in which the head of the household was 65 and older. Of those homes, 156,670 were bought by families with heads of household 75 and older, according to the data, the most recent available. It's a trend that's continuing, anecdotal evidence indicates.

And there continue to be long waiting lists of people 62 and older for the Philadelphia region's 76 continuing-care retirement communities (most of them in the suburbs), where people "buy the right to a lifetime of care and cannot be forced to move," said Susan B. Brecht, a senior-living consultant at Brecht Associates in Philadelphia.

When W. Harley Funk and wife Oredelle Mae (known as "Petey"), both now 83, moved to Ware Presbyterian Village in Oxford from Delaware in November 2006, it was a new experience. "This was the first time we'd ever bought or sold a house," said Funk, an architect, who designed and built their Wilmington home in 1961 at a cost, including land, of about $45,000.

"I retired in 1990, and we did talk about [moving] for a lot of time," he said. "We spent three or four years looking for something we liked."

The layout attracted them to Ware, where the entry fee ranges from $93,000 to $408,000, not including monthly costs of up to $2,196.

But the Funks moved there six months before they sold their house, acquiring the condo at Ware using their assets and a "fair amount of cash."

They didn't suffer, he said. "We have been fortunate. Not affluent, but fortunate."

Younger retirees remain the mainstay of the active-adult (over-55) housing segment, which has done better nationwide as the overall market has stalled. "These are real estate products, so the unit is bought and sold," Brecht said, as opposed to CCRCs, in which, she said, ownership cannot be passed on.

Active-adult communities are increasing in number, and sales and median prices appear to be holding, even rising, despite the possibility of a recession.

In the first 11 months of 2006, there were 36 active-adult communities in the seven counties surrounding Philadelphia, with net sales (after cancellations) of 1,613 units and an average price of $295,407, said Joseph Wadsworth of Hanley Wood Market Intelligence, an independent firm that tracks new-home sales nationwide.

In first 11 months of 2007, net sales in the seven counties had fallen to 1,418 units, Wadsworth said; there were 49 communities, and the average price was $310,831. (Hanley Wood did not begin monitoring Philadelphia home sales until August.)

Some over-70 buyers do opt for homes in active-adult communities - like Robert E. Sampson, 78, who retired as vice president of Arm & Hammer Corp. in 1983, but has worked as a consultant since.

In June 2006, Sampson and his wife, Joan, sold the four-bedroom house they had occupied for 26 years in Basking Ridge, in North Jersey, and bought a unit at Foxfield, an over-55 McKee Builders community in Garnet Valley.

"My wife was looking to eliminate all the work involved in caring for a house," he said. "We don't consider ourselves old. . . . There's a sign at the entrance to Foxfield that reads '55+ is not a speed limit, it's a lifestyle,' and we certainly agree," Sampson said.

Harriet Stark and her husband, Russell, now both 77, bought in Hershey's Mill, an active-adult community in West Chester, when they were much younger, in 1989. Now, they hope to sell the townhouse and move to a CCRC "because we're not as active as we once were."

When they purchased their townhouse, comparable units were selling for about $250,000. Now, local real estate agents say, they are listed for $350,000 and up.

Stark has little doubt that the house will sell quickly. They've remodeled the kitchen to help ensure that it does, she said, and while "the market isn't too good, it is not as bad as it has been."

Still, though Hershey's Mill is a good location, she said, "my husband says that more and more people are having trouble getting rid of their houses.

"If it doesn't work out, we'll just stay here.