Why are all the single-family homes below 350k in NJ 55 active adult communities? (Asbury Park: real estate, renting)

[Ryancurious]

I have a little rant. Why are all the single-family homes below 350k in NJ 55 active adult communities?

My husband and I live in bottom part of central NJ, Middlesex-Mercer area. We are looking for, and have been for a while, a newly constructed single-family home and it just baffles me why there are so many active adult communities surrounding my area. Our jobs are in Bridgewater and our commute is currently 45mins and longer depending on weather and traffic. Moving to Burlington or Monmouth County is not an option. The trip up to Bridgewater from these counties consist of either the NJ Turnpike, Rt. 9 and/or Rt. 18 or GS Parkway to get to Rt. 287….1 hr plus! To get to work now, I take mostly back roads until I reach Rt. 206 north. Burlington is beautiful and I would love to live there but again, 1 hr plus…with gas going up to 4.00 a gallon…no can do.



Time was that a newly built community catered to the first-time homebuyer section and the prices and house sizes were set accordingly. Now, the 55 communities have this price and house size and the new constructions are McMansion sized for first-timers, starting at 500K and up.

Some builders have most if not all of there new construction available in NJ as 55 active adult communities. Centex, Toll Brothers and Khov all have more 55 communities available than regular single-family communities.

These builders got greedy during the boom where many 20-30yr old homes sold for as much as 5x what the original owner paid including any upgrades over the years. The builders told their investors that 55 communities are profitable. This allowed the 55 market to flourish, who are mostly still working by the way since the retirement age got pushed up to 67, causing many people in their 20’s, 30’s and 40’s to take out riskier mortgages just to buy a home, resale or new.

Now that the market has fallen out of the mortgage business the 20, 30 and 40 yr olds can no longer afford a 20-30 yr old house that is 5x or 4x what the owner originally paid. So if the 55 adults cannot sell their existing home who is buying into the newly constructed 55 communities?

I believe this to be the cause of the surplus of 55 communities in NJ, so why has this not fully affected the non-55 communities in the form of price drops? Ok, maybe this was a big rant.

Tell me your thoughts.

[Busch Boy]

Originally Posted by Ryancurious

I believe this to be the cause of the surplus of 55 communities in NJ, so why has this not fully affected the non-55 communities in the form of price drops? Ok, maybe this was a big rant.

Tell me your thoughts.

If a surplus does occur, they might decide to integrate these communities and allow people younger than 55 to move in. I think they already allow that, as long as the residents don't have children. The percentage allowed in, however, may become higher.
I always wondered who bought those homes anyway. Don't retirees usually flee NJ for cheaper and/or warmer places?

[Honeycrisp]

Some do but if their children and grandchildren are in NJ, they may opt to stay and downsize to an active over 55 community in NJ unless they can afford trips from a cheaper warmer state and have the time and energy to make them (driving is expensive and so are flights, they're also stressful w/ delays etc). It also depends how often they want to visit, once a yr vs a few times. I know of some who have relocated south for retirement but then get tired of the trips back, esp. if a spouse passes away etc, and move back.

[krusher]

Over the past 10-20 years builders have stopped building "starter" homes, building only McMansions and other trade-ups. You'd be hard pressed to find something new for the $300s unless you're talking south jersey like gloucester and salem counties. We live in Gloucester but I can deal with the long commute for now. I won't always be able to deal with it :-)

Now, if the gloom-and-doomers on the economy are correct, we're seeing a fundamental shift in the economy. Some believe that real estate has gone so high as to cut out the entry level buyers in many markets. Without entry level buyers, not so many people can trade up to McMansions. If that's the case, builders will eventually build smaller homes. Could take years though.

[Stace08]

Many towns will not approve new development unless it is age-restricted, so as to not incur costs of building or adding on to schools.

[Busch Boy]

Originally Posted by krusher

Without entry level buyers, not so many people can trade up to McMansions. If that's the case, builders will eventually build smaller homes. Could take years though.

I was reading an article once that stated McMansions were going "out of style" because younger people entering the housing market (and those that will enter it within the next several years) prefer well-made small homes with all the "trimmings" (high-end technology, moldings, detailed wood, etc.) as opposed to a 4,000 sq ft. home with basic materials. They said its somewhat of a generation rift. They also mentioned how this group is bigger on practicality and how they worry about the cost of maintaining large homes (heat, cooling, etc.). It was a really interesting article. I will post it if I find it.

[wileynj]

Originally Posted by krusher

Over the past 10-20 years builders have stopped building "starter" homes, building only McMansions and other trade-ups. You'd be hard pressed to find something new for the $300s unless you're talking south jersey like gloucester and salem counties. We live in Gloucester but I can deal with the long commute for now. I won't always be able to deal with it :-)

Now, if the gloom-and-doomers on the economy are correct, we're seeing a fundamental shift in the economy. Some believe that real estate has gone so high as to cut out the entry level buyers in many markets. Without entry level buyers, not so many people can trade up to McMansions. If that's the case, builders will eventually build smaller homes. Could take years though.

It's not the price of homes going up...it's the price of land. Builders typically try to build for twice the cost of the land..i.e. 300K for the lot...600K home. Most of these retirement communities are "cluster" communities..hence the reason they can build so many and sell for much less than single family homes on single lots. A buildable lot by me runs close to 200K. Unless they ship in a double wide..there's no way a builder can build something they can sell for 350K

[krusher]

It's not the price of homes going up...it's the price of land.

Hmm, maybe. But that doesn't explain the $300k and up condo/townhome prices.

[fischfan13]

I think that you title is misleading.
In NJ?
Why didn't you title your post "How Come I Cannot Find Brand New Construction Below 350k In My Town"?
I have a few questions...
Why new construction?
If you can afford no more than 350K than maybe you are looking at the wrong thing in the wrong places. So you think that homes that are older are much more expensive because of the recent real estate boom?...Well those prices have toppled.
IMO, you are looking at the wrong type of house (new construction)...and maybe you should include more towns to your search as there are other towns around Bridgewater that are affordable and do not have a glut of 55+ communities.

[fblumberg]

I grew up in Monmouth county and after trying the rest of the country I have returned... Am renting in Rumson, cannot afford to live here, The only thing I can afford is a condo in Asbury Park .... Im too old for getting chased by the Bloods and Crips... after midnight walking the Beagles... other alternative Shadowlake Village an over 55 community... Im gay and 50 my civil union partner is 54 just had a stroke and we need to buy somewhere!
nobody seems to know how to get in.. some residents and real estate people say just buy and move in. That makes me nervous, I we need a place of permance now more than ever, and being at home in the Red Bank area is important... there may be a loophole about The 11 month rule or being 54+1 month is allowable but I cant find any more info on it .
I only have about $150,000 cash and a very sick spouse, any help or info would be appreciated!