PHILADELPHIA — Baby boomers and active-adult housing once seemed made for each other. Smaller, maintenance-free homes, with high-end decorative touches and recreation opportunities galore, were ideal for the still young-at-heart.

Then the economy went south. Many boomers found they couldn’t sell the houses they owned – at least not for the prices they wanted – in order to downsize, and some U.S. builders were left awash in active-adult lots.

In the Philadelphia area, “the fact that about 31 percent of available new homes are 55-plus does show an imbalance between supply and demand, but nowhere near what we see in some other areas, like central Jersey, where over 64 percent of the new units are age-restricted,” said Wayne Norris, regional sales manager for Hanley Wood Market Intelligence, which tracks new-home sales.

Still, from January to July, active-adult accounted for 17 percent of the region’s new-home sales, Norris said, down only slightly from 21 percent in the same period in 2005 to 2008. That shows the market “is still holding strong, considering that the bulk (of real estate sales) has been entry-level buyers.”

Many communities “are small jobs, with just six to 12 houses looking for buyers,” said active-adult market consultant William Becker of Teaneck, N.J. To boost sales, he said, some builders are telling buyers, “Here’s what we can do for you.”

Others are turning to active-adult rentals, Becker said. When one of his San Francisco-area clients, saddled with hundreds of unsold units, began renting them, “the move brought in sales as well,” he said.

In the case of builder Bruce E. Toll, who breaks ground this afternoon on Dublin Terrace, a 13-building, 192-unit active-adult rental community in Dresher, Pa., the decision was dictated by two other factors: local zoning and an agreement with his brother, Toll Bros. CEO Robert I. Toll, not to venture into the for-sale residential market.

Over more than a decade, Bruce Toll’s BET Investments in Horsham, Pa., has built almost 6 million square feet of office and industrial space, as well as rental apartments, nationwide. (Toll is chairman of the board of Philadelphia Media Holdings, owner of The Inquirer, the Philadelphia Daily News and Philly.com.)

Dublin Terrace’s 19-acre tract was purchased five years ago from NVR Homes, which planned condos there. BET wanted to build apartments, but Upper Dublin Township didn’t want to increase the school system’s rolls. So, Toll said, he decided on age-restricted rentals.

Units will range from 1,400 to 1,900 square feet. Monthly rents will be $2,000 to $2,600; garage spaces underneath will cost $100 a month more. A clubhouse building will house a fitness center, a pool, and a community room.

Toll said he already has fielded more than 200 inquiries about the units, all of which will have terraces.

Becker said Dublin Terrace will likely fare well, “especially if (Toll) offers the amenities that the for-sale market provides, such as convenience, elevators, and on-site recreation.”

Currently, there isn’t much competition in the high-end-rentals niche. Peter Angelides, vice president of Econsult in Philadelphia, said rentals at Dublin Terrace “would more likely be for middle-income households, or for people who are transitioning between the larger child-raising house and their retirement house, but want to spend some time on the homeownership sidelines.”

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By ALAN J. HEAVENS
The Philadelphia Inquirer

Source: Miami Herald – United States