Senior Living Boom and Its Impact on Investors | Real Estate Market Update w/ Martin Perdomo

What if the current real estate climate offers you a golden opportunity to snag your dream home at a bargain? On this week's episode, we unravel the art of negotiation in a cooling market where homebuyers in 2025 are capitalizing on discounts and negotiating power not seen for years. We dissect the dynamics of higher mortgage rates, now averaging 6.96%, and how they're influencing buyer behavior and market trends, particularly in areas like Florida where discounts can reach up to 5%. If you're ready to navigate this shifting landscape, our insights into market strategies will be invaluable for both seasoned investors and first-time buyers.

But that's not all—we turn our attention to the surging demand for senior housing fueled by the aging baby boomer generation. With a significant shortfall in supply due to rising construction costs and high interest rates, we explore how major players like Welltower and Ventus are pivoting to smart investments in existing properties. As 10,000 baby boomers celebrate their 65th birthday every day, the pressure mounts on the housing market to innovate and meet demand. From soaring stock prices to potential policy changes, we uncover the challenges and opportunities that lie ahead for investors and the impact on affordability for middle-income earners. Join us to understand these critical market shifts and prepare for a future where strategic foresight is key.

Transcript

Speaker 1: 0:01

Welcome back to this week's real estate market update, where we cut through the noise and focus on the numbers that really matter in today's housing and investment landscape. Whether you're a seasoned investor, a first-time buyer or someone just curious about market trends, we've got the insights you need to stay ahead. Let's jump into the latest updates. Homebuyers scoring bigger discounts in 2025. If you're a homebuyer right now, you might be in the best position to negotiate that we've seen in the last two years. According to Redfin's recent data, the typical US homebuyer is paying roughly 2% less than the asking price. That might not sound like much at first but for context, on a $400,000 home, that's an $8,000 savings just from current market conditions, and for some regions, especially in Florida, this discount can be as high as 5%. Now what's really driving the trend? First, let's look at mortgage rates, which are currently averaging 6.96%. That's more than double than what buyers were seeing just a couple of years ago, when rates were hovering around 3%. These higher rates have pushed a lot of potential buyers out of the market, or at least made them more hesitant to pull the trigger on purchases. As a result, homes are sitting on the market longer. In fact, the average home is now taking over 60 days to sell, and that's another key number to watch for. For sellers, this extended time on the market often means they're more willing to negotiate, especially if they need to sell quickly. In markets like Miami, tampa and Jacksonville, homes are selling for as much as 5% below the list price. Again, on a $500,000 home, that could mean a twenty five thousand dollar savings for the buyer. However, it's not all homes. Those that are moving ready in prime locations think top school districts and good proximity to job centers are still seeing competition, but overall, the cooling market is a strong signal to buyers that this is the time to negotiate. Quick reminder if you want to stay up to date on how these shifts in the market could impact your next move, make sure you log into WealthyAFai. We're consistently updating our members with the latest news, tips, strategies to navigate the real estate landscape. Don't miss out. Sign up today.

Speaker 1: 2:47

Now to the senior housing boom, where we are seeing massive growth but also some significant challenges. As the baby boomer generation continues to age, demand for senior housing is exploding. By 2030, we're expecting to see a shortfall of over 369,000 units, as only 191 units are currently in development, while the demand is set to exceed 560,000. So why the gap Rising construction costs is kept an obvious are major factors. Material costs have surged by over 15% in the past year alone and, yes, I'm experiencing this myself in my current rehabs. And when you combine what the interest rates hoovering around 7%, many developers are hesitant to take on new projects. In 2024, we saw a significant slowdown in new construction starts for senior housing and it's projected that this trend will continue into 2025.

Speaker 1: 3:56

Now let's talk about the financial side of investors. Big players like Welltower and Ventus have shifted their focus away from building new developments and are instead acquiring existing properties. This move has proved to be highly profitable. Both companies have significantly outperformed the Real Estate Investment Trust REIT index in 2024. Welltower, for example, saw its stock price increase by 12% compared to the overall REIT index, which grew just by 4%. But here's the critical number Over 10,000 baby boomers are turning 65 every day and they're fast approaching an age where senior housing becomes a necessity.

Speaker 1: 4:44

By 2025, nearly 80 million Americans will be over the age of 65. The sheer volume of people entering this demographic, coupled with the limited supply of housing, creates a serious imbalance. We're likely to see steep increases in rent for senior living facilities, especially those that cater to middle income earners. For investors, this could mean strong long-term returns, but there's a real concern about affordability. The luxury senior housing market is booming, but the lack of affordable options means that many seniors on fixed incomes will struggle to find suitable housing. It's an issue that will need to be addressed either through policy changes or new market innovations, but for now, the numbers suggest we're heading towards a significant supply crunch.

Speaker 1: 5:41

Now I see opportunity in the marketplace. Now I see opportunity in the marketplace. There could be potential opportunity in the marketplace for investors to invest a passively with groups that invest in the senior housing affordable market, in the affordable senior housing market. Excuse me and be for you if you want to get into the world of real estate investing, to become an active investing and focus on that niche. Just a thought, not an opinion, and this wraps up this week's real estate market update. Remember, staying informed gives you the edge, whether you're buying, selling or investing. Make sure to subscribe to stay up to date the latest real estate trends. We'll see you next week with more data-driven insights to help you navigate the market. Thank you, peace out.