For most elders the move from independent living to assisted living facilities is a difficult decision. It entails giving up a lot of independence while admitting to oneself and to others that help is needed. Freedom, privacy, and dignity is lusually lost along the way. But for all those who get through all those problems, now the current real estate crunch is creating another, even bigger obstacle.
A recent NY Times article on the housing crises and assisted living profiles what BestAssistedLiving has heard over and over again from administrators at CCRCs and other assisted living facilities. The problem is that people in many parts of the country are simply unable to sell their existing homes or apartments, a necessary event to pay the $200,000-$300,000 entry fees at many assisted living facilities. Even after dropping the price, Ruth Scher cannot sell her Del Ray Beach FL condominium. Without that money she is stuck living there, even though she knows she needs the extra help that would come in an assisted living facility.
Occupancy rates are soft throughout the industry. Cypress Cove in Fort Myers FL ia one of many high-end CCRCs that has several unoccupied units. The Cedar Community, which provides a range of housing for the elderly in West Bend, Wis., has seen occupancy rates drop by 4% this year. Some assisted living facilities have begun to allow month to month rentals, without always requiring the entire entrance fee to be paid upon arrival. The Times reports that according to the National Investment Center for the Seniors Housing and Care Industry. "... occupancy rates for independent and assisted-living facilities have fallen slightly in the last year, by about 2 percent through the middle of 2008".
What to do?
Like with everything else in life, planning ahead is always a good idea. A move to assisted living is a virtual certainty for anyone fortunate enough to live into their 90's. So if your loved one owns real estate, starting thinking now about how to dispose of it. If the time for a move is now, talk with the facilities you are considering. Most, if not all of them, need the monthly income. Many will be able to work a deal that allows a delay in paying entrance fees, perhaps contingent with the selling of one's house. Just be careful to have your family lawyer look at any contracts to make sure you don't create another problem.
Another possibility is to look for a facility that allows you to rent, paying as you go, without entrance fees. And perhaps the best of all ideas, surprising that it doesn't get mentioned more often, is a reverse mortgage. You can borrow close to the full value of your home and be paid that over the life of the contract. So it allows you to get the money now, and let the bank worry about selling your home.