In An Uncertain Housing Market—

Some Homeowners Are Finding It’s The Right Time For Right Sizing

By Nancy K. Crevier

Call it downsizing or right sizing, it is a trend among the 55-plus age group, say local realtors and marketing agents for active lifestyle communities.

Coldwell Banker Residential Brokerage recently conducted an online survey with responses from 150 Coldwell Banker brokers nationally that showed that 66 percent of them reported an increase in home purchases from the empty nester demographic over the last three years.

More than half of those brokers cited the desire to downsize as the reason for empty nesters selling. “There is a clear spike from boomers downsizing or changing homes once children are out of the house and we expect this trend to grow over the next few years,” said Kate Rossi, president and COO, Coldwell Banker Residential Brokerage in Connecticut and Westchester County. The survey also found that 49 percent of the empty nesters are looking for condos or townhouses and select homes based on proximity to services such as recreation, cultural activities, and golf.

The Woods at Newtown, Regency at Newtown, and Walnut Tree Hill Village are three such communities located in Sandy Hook and Newtown.

“Right now we are on that leading edge of ‘baby boomers,’ those people who are approaching 60 years of age,” said Barbara Kleger, president of 55+ Consulting and a consultant for The Woods at Newtown, one of several communities in Newtown geared toward the over 55 age group.

“There is a trend throughout the whole country of people who are thinking, ‘This is a whole new segment of my life.’ These are the new middle years when people are deciding they don’t want the burdens of home maintenance anymore, that they want to be able to pick up and go anytime, and active lifestyle communities appeal to them,” she said.

Greg Kamedulski is the division president of Toll Brothers for Connecticut, the developer for Regency off of Route 34, another active lifestyle community. “We are seeing a mix of people, some of them from Newtown, who don’t want the big house anymore,” said Mr Kamedulski. “We are also seeing a number of people in their 30s and 40s who are buying units for their parents in order to have them nearby — that’s an interesting phenomenon,” he said. The third group of buyers at Regency are the over 55 people from out of state who are buying to be near their children in Fairfield County, mainly from the tri-state area, he added.

Active lifestyle communities usually offer more than just a roof over the head. Clubhouses on the grounds of many communities offer amenities such as gyms, indoor pools, concierges, and gathering spots. Nature trails, bicycle paths, and fishing ponds on the grounds appeal to those who love the outdoors and appreciate the convenience of having it right outside their doors. Easy access to highways and proximity to city offerings attract other buyers, and communities in Newtown provide both. Communities also monitor the entrances to the buildings, providing a sense of security. Worries about shingles blown off by a windstorm or siding damaged by storms belong to the management company. Only the interior maintenance and decorating are left to concern the buyer, and they are thrilled to have all new surroundings, said Ms Kleger.

Convenience And Comfort At A Cost

But right sizing does not come cheap. Current listings in Newtown show prices for 55+ housing between $350,000 and $550,000. Residents also pay a monthly fee that covers common costs, such as snow plowing, lawn care, and other routine maintenance, as well as the use of common amenities. Many would-be buyers currently live in a home they have owned for more than 30 years and must sell that property in order to buy into an active lifestyle community. However, the median price of single-family homes fell in January by the largest percentage since April 1995, rivaling the plunge in sales of the 1980s, according to the publisher of The Commercial Record. So is the current market discouraging potential buyers from “right sizing”?

Joann Carroll is an independent consultant to The Woods at Newtown, and she agrees that across the state there is a build-up of housing inventory. However, said Ms Carroll, “What is off-putting in Connecticut is that we are lumped together as a national whole. Connecticut has very little inventory compared to other states.” By and large, The Woods clientele does not seem concerned about selling their single-family homes, she said. “The Woods is in a unique situation. Construction has not yet begun on the first building, so our buyers tend to feel that by the time their unit is ready within the next year, that they will have been able to sell their home.”

Diane Gagliano, director of sales for The Woods, pointed out that people who have lived in a home for 30 or 40 years have a great amount of equity built up. “The appreciation is tremendous, as most of these people no longer have a mortgage on the home they want to sell. I’m also seeing that people who are ready to make the change are very realistic about the market time to sell, they have been around long enough to see the ups and downs of the real estate market. Most are anxious to simplify their lives,” she said.

Units for The Woods at Newtown, which will ultimately consist of 170 townhouses and clubhouse condominiums,  have only been offered since October of 2007, said Ms Gagliano, and she is pleased that as of March 1, 20 of the homes have already sold.

Mr Kamedulski also does not see the single-family housing slump as having a negative effect on sales at Regency. Since opening the units for sale last year, more than 20 of the 54 homes slotted for the development have been purchased, and 13 buyers have moved in so far. “The month of February was fabulous at Regency at Newtown. As the months go by, we are actually seeing sales increase. The pace of activity indicates that we will sell at least 25 for the year,” he said. “Selling single-family homes is the number one issue in all of the communities Toll Brothers is developing in Connecticut. There are certainly those buyers who have a fear about being able to sell their homes, but a lot of them figure that in the six to eight months it takes to build the home at Regency, they will be able to sell,” Mr Kamedulski said.

Setting Realistic Prices

“I would venture to say this market downturn has made downsizing more difficult for couples,” said Newtown realtor Maureen Colbert. “It’s a terrific time to downsize for pricing issues, but the sellers have to set realistic selling prices for their current homes. That’s always been a key issue in selling — what a buyer will pay.”

Ms Colbert is familiar with one case in which local sellers were unwilling to price their single-family home at today’s market value. The couple wanted to move into Regency, but after a year in a market that became decidedly worse, they eventually cancelled the Regency contract and are staying in their home. “This market will make it more difficult for people to sell for any reason, but it can be done. They have to price the home correctly, stage it, make it shine in comparison to the competition, and try to put their emotional attachment to the home behind them so they can be more objective about offers,” said Ms Colbert.

Phase I of Walnut Tree Hill Village in Sandy Hook was completed nine years ago, said Hank Kessler, president of Walnut Tree Hill Condo Council, which differentiates that development from Regency or The Woods, all of which are new construction or not yet under construction. “All of our units here are resales now,” said Mr Kessler, who himself moved from a single-family home in Newtown to Walnut Tree Hill Village when it opened. The 55+ community is established now, and even Phase II is completely built, he said.

There are four Phase I units presently on the market, said Mr Kessler, and the two larger units are offered at prices much below what they would have been two or three years ago. People are pricing the units to sell, he said, and he has not heard of any sales being held off due to the buyer’s inability to sell another home. Most of the buyers at Walnut Tree Hill Village are from the tri-state area, Mr Kessler said, with very few being Newtown single homeowners downsizing.

Cesare “Eno” and Lianne Migiano are one Newtown couple who have put down a deposit on a unit in a local active lifestyle community. They have lived in their home for 35 years, but are tired of the upkeep now and ready to enjoy life. Originally they planned to uproot and retire to Albuquerque, N.M., even having gone so far as to have a house plan drawn up. “Then we started looking for a small place to come back to when we were visiting; we saw The Woods, we fell in love, and cancelled our plans to move to New Mexico,” Mrs Migiano said.

 “Our mortgage is paid off,” said Mrs Migiano, “so maybe this doesn’t seem to necessarily be the wisest move financially, because we will be paying a common monthly payment, but it will offer peace of mind. What bothers us most about staying in our home is that we are getting older and are tired of navigating an icy driveway or steps, and we just cannot do the maintenance ourselves anymore.”

The Migianos have not put their home on the market yet, and appreciate that they have time to prepare themselves for the move psychologically and physically. “I am a collector, I have lots of tschotchkes that will take a long time to sort out. It will be about a year until our unit is ready, so in the meantime I can start tag sales, donate to the center in Danbury or other organizations, and get a dumpster,” she said.

‘A Great Time To Sell’

A former realtor, Mrs Migiano is not overly concerned about selling their single-family home before the new unit is ready. “I know how important it is to stage a home right and prepare a home to sell in a sluggish market. We’ll put it on the market in the fall. If it sells right away, we will rent until our place is ready.”

Despite what appears to be a downturn in the single-family home market, local realtor Beth Caldwell is encouraging people to put their homes on the market if they are thinking about downsizing. She is not aware of any incidences in which sellers have felt their options stymied by a slow market. “It’s actually a great time to sell,” she said. While it is taking a little longer to sell than prior years, things are leveling out to a more realistic market now, said Ms Caldwell.

“We all got spoiled by the buying and selling frenzy two and three years ago. The numbers now are really being based on what has sold and that is how it should be,” she said. The average time on the market for a single-family home in Newtown is now between 90 and 120 days. That is a normal, healthy market, said the realtor, so sellers should not be overly concerned about moving a piece of property.

What is important, though, said Ms Caldwell, are the three “Ps”: Prepare, Price, and Promote. “If a seller prepares the home for sale, prices it right, and promotes it, the house will sell,” she claimed. “There will always be people out there who have to sell or who want to buy.”