The housing slump has caused woes in more than just the mortgage industry. Senior housing operators have experienced diminishing occupancy rates as more seniors opt to remain at home longer. In some cases, a move to senior living, such as assisted living or even independent living, would make more sense, but seniors are reluctant to put their homes on the market in the tumultuous real estate climate, as Senior Housing News reports.
Whether they're afraid their home simply won't sell, leaving them without the means to pay for senior housing, or if they're not willing to give up their lifelong homestead at a bargain price, many seniors are fending for themselves in lieu of moving to a community setting. Still other seniors are left with a home much larger than they need, and maintenance can quickly become more than they can handle even with the help of loved ones.
Some senior living providers are taking matters into their own hands, enabling seniors to receive the care they need in the appropriate setting without worrying about whether the family home will sell. Brookdale Senior Living, for example, recently implemented a program allowing seniors to move into a facility with a down payment (in lieu of a full entrance fee), using an unsold home as a promissory note. If the home sells, Brookdale obtains the funds to recoup the entrance fee. If the home doesn't sell, however, Brookdale purchases the home at a previously agreed-on price (usually from a third-party appraisal).
Brookdale reintroduced this program in 2008, although company representatives say it's actually not a common practice. Only 12% of Brookdale Senior Living Communities have an entrance fee; the remainder are monthly rentals. Still, the program is increasingly used: In 2008, just 15% of residents entering facilities offering the housing program participated. This rose to 25% in 2009, and in 2010, nearly 40% of eligible residents made use of the program.
It seems to be money well-spent. According to Chris Bird, Divisional Vice President of Operations for Brookdale Senior Living, move-ins have increased by 31% since implementation of the housing program. This can't be attributed solely to Brookdale's housing program, as overall trends point to high demand and low supply across the senior housing industry. However, it's a valuable asset to seniors who need communal living, whether to reduce isolation or for assistance with activities of daily living, who otherwise might not be able to make a move before selling their family homes.
When the real estate market booms yet again, these programs won't be needed. In the meantime, it's peace of mind for many families who can rely on programs like Brookdale's to purchase the family home if it doesn't sell after a period on the market.
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