The 55+ Active Adult housing market is showing signs of correction as prices have been adjusting in recent months. According to the Franklin Loan Center Active Adult Price Index, which tracks the average price of a 1,900 square foot home in eight active adult communities, the average price as of March was $585,209, reflecting a 2.2% increase compared to the previous year. However, when looking at individual developments, the average gains ranged from 5% for Trilogy Polo Club to as low as 0.2% for Trilogy, indicating variation in price performance across different communities.
Sales in the 55+ Active Adult market have seen a decline, with an average of 63 units sold per month in all eight communities in March, marking a 32% decrease compared to the previous year. Dollar sales of the active adult communities also decreased, averaging $36 million per month, down 29% from the previous year. This suggests a slowdown in demand for homes in these communities.
Inventory levels in the 55+ Active Adult market have increased, with listings in the eight communities totaling 188 units at the end of March, compared to only 41 units in the previous year. The "months of sales" ratio, which measures the time it would take to sell all available inventory at the current rate of sales, was 3.0 months in March, indicating a better balance of supply and demand compared to the previous year's ratio of 0.4 months. However, it is still lower than the pre-pandemic average, suggesting a potential excess supply in the market.
The average number of "Days in the Market," which measures the time it takes for a home to sell, has increased in the 55+ Active Adult market. In March, the average days on market was 61 days, compared to 32 days in the previous year. The range of average selling times varied from 32 days in Villa Portofino to 77 days in Trilogy Polo Club, indicating differences in market activity among different communities.
Price discounts or premiums in the 55+ Active Adult market have also shifted. In March, homes in the eight communities sold with an average discount of 2.2%, compared to an average premium of 1.3% in the previous year. Only one of the eight communities, Four Seasons at Terra Lago, continued to sell homes with an average premium of 0.9%. This suggests that sellers may need to offer discounts to attract buyers in the current market conditions.
In summary, the 55+ Active Adult market is experiencing price corrections, with average prices showing modest gains but with variations across different communities. Sales and dollar sales have declined, while inventory levels have increased. Average days on market have also lengthened, and price discounts have become more prevalent. These market indicators reflect a potential shift in supply and demand dynamics, indicating a changing landscape for the 55+ Active Adult housing market. It's important for buyers, sellers, and industry professionals to closely monitor these trends to make informed decisions in this evolving market.