Active Adult Communities

Active Adult Communities

Consider for a moment the vast population of retires who have owned and lived in their home for many years. The equity in those houses has grown as their mortgages have been paid down and as price appreciation has compounded year after year representing a lifetime of loving nurturing of family and of the house. Now many years later with the children gone this valuable asset has become too large and increasingly difficult to maintain. You would think that the couple would be in an excellent position to benefit financially by scaling back and moving to something smaller,

Enter the home builders and developers. Recognizing a glaringly obvious need and therefore an opportunity, they build Active Adult Community's, complexes of homes and frequently recreational facilities like golf or swimming pools for people 55 and over. Most of the homes are relatively small but surprisingly, not all. What is small, ridiculously small, are the plots of land on which the houses sit. They are ridiculous not because they are small but because the price of the home package equals or more frequently exceeds the sales price of your old larger home on a much larger lot.

The developers have found a successful way of transferring our hard won equity into their pockets. Land and material and labor constitute the costs in home building. By building many small houses on a few acres they reduce costs by large percentages. Those savings are not passed on to the people purchasing the house. It's a great business they charge you more for less.
posted by Tom Madson @ 5:32 AM