An Executive Perspective: A Brighter Outlook Ahead
We’re introducing a new monthly feature blog, An Executive Perspective, which conveys the latest insight from GlynnDevins executive leadership who have a lot to share, because they are constantly in contact with the top professionals in the field of senior living, exchanging forecasts, identifying trends and challenges, and developing best practices.
A meeting of the minds took place last week in Dana Point, California for the American Seniors Housing Association (ASHA) 2012 Annual Meeting. GlynnDevins principals attended to share insights and hear the latest news in the field of senior living from top firms and professionals in the for profit and not for profit sectors of senior living.
The key takeaway from the conference was an upswing in confidence in senior living performance, which is a reassuring message after several years of dealing with the aftermath of the economic downturn and not knowing how long it will take to recover. Though dates for total recovery varied, often by region, most all attendees agreed the worst is over and optimism is warranted.
We are all aware of the real estate market struggles as seniors have delayed decisions, but it turns out senior living is doing better than most any other sector involving real estate. Cap rates are higher now than in several years spurring on healthy merger and acquisition activity. Although certainly more progress to be made, steady gains and positive indicators reveal a bright outlook for the years to come. This is an important message to share with prospective residents who may be standing on the sideline looking for signs to move forward.
What will happen when the huge shadow inventory is released? It is likely to cause housing prices to fall again, ruin the modest gains in the real estate market and threaten the very slow economic recovery.
Any positive insight to this would be appreciated (and needed).
To be sure, this is a concern. However, here are some thoughts that might be kept in mind. First, there will be no one day where the gates open and the real estate market is flooded with homes that have previously been unlisted by discouraged sellers. It’ll happen over time, some markets will turn faster than others, and in some cases such inventory may have already started to be listed and/or sold. Second, getting this behind us is a good thing – so let’s get started. Thus, any sign that the shadow inventory is coming on the market just means we are that much closer to gettign back to “normal.” Third, a key point to remind all potential sellers is that good homes, in good locations, and at the right price have generally been selling for some time and will continue to do so. Targeting sellers of such homes is critical during challenged times such as these. Especially for a poorly located client that isn’t doing what it takes correctly price or “stage” their home, selling will be hard even in a robust market.