Continued progress in the real estate market has reverberated to the 55+ housing sector, possibly signaling sustained growth as the rest of 2013 unfolds.
During the fourth quarter of 2012 builder confidence in the 55+ housing market for single-family homes increased 10 points to a level of 28, according to the National Association of Home Builders’ (NAHB) most recent 55+ Housing Market Index (HMI).
This fourth quarter gain marks the fifth consecutive quarter of year-over-year improvements, as industry members continue to see increased optimism from builders and developers in the 55+ housing market.
“Those customers who had been on the sidelines waiting for more stability in their local markets are starting to make their move toward either purchasing a home or renting an apartment that is designed to more specifically suit their lifestyle,” said Bob Karen, chairman of NAHB’s 50+ Housing Council and managing member of the Symphony Development Group.
The 55+ HMI is broken down into two segments: single-family homes and multifamily condominiums. Each HMI measures builder sentiment based on a survey that asks if current sales, prospective buyer traffic and anticipated six-month sales for the market are either good, fair or poor.
With indices below 50 indicating that more builders view conditions as poor rather than good, all components of the 55+ single-family HMI remain below 50. They have, however, improved significantly from a year ago, says NAHB.
Present sales have climbed 10 points to a reading of 27 for fourth quarter 2012.
Expected sales for the next six months increased 12 points to a level of 38, and prospective buyer traffic also rose nine points to 24.
The 55+ multifamily segment remained the weakest segment of the 55+ housing market, notes NAHB, although it did post an increase of six points to 19.
As weak as it is considered, the multifamily condo sector posted a present sales increase of five points to 17, expected sales rose eight points to 25, and buyer traffic rose six points to 21.
“Like the overall housing market, the 55+ segment of the market is undergoing a slow but steady recovery,” said NAHB Chief Economist David Crowe. “That said, there are serious obstacles to a continued and stronger recovery.”
Written by Jason Oliva