Article Courtesy of The Sun Sentinel

By Robin Benedick

Published December 24, 2006

The sprawling seniors-only communities that popped up around South Florida in the 1960s and 1970s were billed as amenity-filled complexes for active retirees.

Today, with more healthy and wealthy retirees than ever, the demand for 55-plus housing remains high, and units in the older complexes are a relative bargain.

It would seem to be a perfect sales environment. Except that the units aren't selling.

Now considered small and outdated, the homes face competition from new upscale retirement "resorts" in Weston and Palm Beach County.

With condo prices starting at about $300,000 and reaching $700,000, the newer complexes feature nature trails, fitness centers and restaurants.

Realtors and community managers also say the older complexes were hit hard by special assessments to cover repairs after Hurricane Wilma.

Add that to a glut of units, plus age restrictions that dramatically limit the pool of buyers, and the units can be a tough sell.

Soaring costs have led to special assessments as high as $50,000 in oceanfront communities, said Gary Poliakoff, whose Fort Lauderdale-based law firm represents 4,000 associations in Florida.

"The bottom line is this is creating an enormous compression on the senior retirees," especially those on fixed incomes, Poliakoff said.

He said many are trying to sell their units in a stalled market and he expects some older communities eventually will drop their adult-only designations.

"I think by normal evolution more and more of these older senior communities will become ideal opportunities for affordable housing for younger families," Poliakoff said.

Real estate experts say there are other factors that could benefit the older retirement communities.

"There will always be people that can't afford the high upscale places and these communities will be where they go," said Bonnie Wilsker, Realtor-associate at ERA All Action Realty in Sunrise.

With some units in Sunrise Lakes in Sunrise and Kings Point west of Delray Beach selling for as little as $40,000, such complexes have become affordable housing for seniors, said Max Rothman, director of the Center on Aging at Florida International University in Miami.

To qualify for a $40,000 mortgage, a retiree would have to earn about $15,000 a year in Social Security and other benefits to cover the mortgage, taxes and insurance, mortgage experts said.

The owner of a $300,000 condo would need to make at least $65,000 annually and the owner of a $700,000 condo would need at least $150,000 in annual income.

Realtors consider the older complexes the best bargains around, especially because many have been completely rebuilt after being clobbered by Hurricane Wilma in October 2005.

"The exact same condo in Delray, same size and location, in a nonrestricted community that sells for $200,000 would sell for $155,000 or $145,000 in a 55-and-over community," said Ron Schulman, managing broker at Majestic Palms Realty in Boca Raton.

Beach-loving Baby Boomers on a budget are starting to take advantage of that.

At the 40-year-old Coral Ridge Towers East in Fort Lauderdale, which is near the beach and Intracoastal Waterway, one-bedroom units range from $150,000 to $250,000, and two-bedrooms range from $250,000 to about $350,000, said Coldwell Banker Realtor Ed Poirier.

That's much less than the average $600,000 cost of a newer two-bedroom beach condo, with some going for more than $1 million, he said.

As a result, half of the owners are now "people who are younger and working but eventually they plan to sell their places and come down here permanently," said association president Richard Creal.

While the age-restricted communities continue to draw buyers from the Northeast, more are now coming from Latin and South America and Miami-Dade County.

But despite their affordability, the older units "are just not selling and a big part of the reason is the cost of insurance and taxes" after Wilma, Schulman said.

Still, Sandy and Stanley Post aren't giving up. They have had their three-bedroom Indian Spring condo in Boynton Beach up for sale since April.

They've lowered the price to $260,000, and think their home will eventually sell because of the amenities the gated community offers, which include golf, tennis and swimming.

The couple plans to move closer to family in California.

"At our age, it's not worth getting depressed about because it's the real estate market today," said Sandy Post, 67, who has lived in the condo six years.

It took Joanne and Richard Weed about nine months to find a buyer for their small retirement home in the Mainlands of Tamarac.

It sold in November after they lowered the asking price from $199,000 to $185,900.

"We finally sold it with the help of God," said Joanne Weed, 62, who is moving to Delaware.

Teri Rubinstein, 68, recently bought a lakefront, two-bedroom condo at Kings Point in Tamarac for just under $200,000.

It's a few blocks from the adults-only community of single-family homes she had lived in for 15 years. But after her section opened its doors to all ages, she said the neighborhood became noisy and shabby looking.

"I didn't have anything in common with the younger people," Rubinstein said.

"I like being around older people and feeling a part of the community."

Despite the gloomy market, some condo boards are imposing tough new rules that make it harder for buyers to be approved. The reason: They want buyers to prove they can afford special assessments or maintenance increases to cover emergencies.

"We've had to because almost anybody can get a mortgage today and when people qualify they never talk about the maintenance," said Joel Leshinsky, president of the Inverrary Association in Lauderhill, which includes 31 condo and homeowner associations.

Finding owners who are financially independent is key, he said, "because once you've joined the club, you have to follow the rules."

Alan Oshins, a broker with West Broward Real Estate Inc., said the high costs of ownership are driving more people to rent a condo in these age-restricted communities than to buy one.

"I'm seeing more rentals today than in years past because of insurance and tax woes," Oshins said.

"Even the foreigners we usually sell to are more interested in renting than buying because they don't get homestead and they don't want to devote so many of their dollars to ownership."