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

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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.

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Episode Transcript

Speaker 1 (00:01):
Welcome back to this week's real estate market update
, where we cut through the noiseand focus on the numbers that
really matter in today's housingand investment landscape.
Whether you're a seasonedinvestor, a first-time buyer or
someone just curious aboutmarket trends, we've got the
insights you need to stay ahead.
Let's jump into the latestupdates.

(00:21):
Homebuyers scoring biggerdiscounts in 2025.
If you're a homebuyer right now, you might be in the best
position to negotiate that we'veseen in the last two years.
According to Redfin's recentdata, the typical US homebuyer
is paying roughly 2% less thanthe asking price.

(00:42):
That might not sound like muchat first but for context, on a
$400,000 home, that's an $8,000savings just from current market
conditions, and for someregions, especially in Florida,
this discount can be as high as5%.
Now what's really driving thetrend?

(01:04):
First, let's look at mortgagerates, which are currently
averaging 6.96%.
That's more than double thanwhat buyers were seeing just a
couple of years ago, when rateswere hovering around 3%.
These higher rates have pusheda lot of potential buyers out of
the market, or at least madethem more hesitant to pull the

(01:26):
trigger on purchases.
As a result, homes are sittingon the market longer.
In fact, the average home isnow taking over 60 days to sell,
and that's another key numberto watch for.
For sellers, this extended timeon the market often means
they're more willing tonegotiate, especially if they

(01:48):
need to sell quickly.
In markets like Miami, tampaand Jacksonville, homes are
selling for as much as 5% belowthe list price.
Again, on a $500,000 home, thatcould mean a twenty five
thousand dollar savings for thebuyer.
However, it's not all homes.

(02:09):
Those that are moving ready inprime locations think top school
districts and good proximity tojob centers are still seeing
competition, but overall, thecooling market is a strong
signal to buyers that this isthe time to negotiate.
Quick reminder if you want tostay up to date on how these

(02:31):
shifts in the market couldimpact your next move, make sure
you log into WealthyAFai.
We're consistently updating ourmembers with the latest news,
tips, strategies to navigate thereal estate landscape.
Don't miss out.
Sign up today.
Now to the senior housing boom,where we are seeing massive

(02:51):
growth but also some significantchallenges.
As the baby boomer generationcontinues to age, demand for
senior housing is exploding.
By 2030, we're expecting to seea shortfall of over 369,000
units, as only 191 units arecurrently in development, while

(03:11):
the demand is set to exceed560,000.
So why the gap Risingconstruction costs is kept an
obvious are major factors.
Material costs have surged byover 15% in the past year alone
and, yes, I'm experiencing thismyself in my current rehabs.

(03:33):
And when you combine what theinterest rates hoovering around
7%, many developers are hesitantto take on new projects.
In 2024, we saw a significantslowdown in new construction
starts for senior housing andit's projected that this trend
will continue into 2025.

(03:56):
Now let's talk about thefinancial side of investors.
Big players like Welltower andVentus have shifted their focus
away from building newdevelopments and are instead
acquiring existing properties.
This move has proved to behighly profitable.
Both companies havesignificantly outperformed the

(04:16):
Real Estate Investment TrustREIT index in 2024.
Welltower, for example, saw itsstock price increase by 12%
compared to the overall REITindex, which grew just by 4%.
But here's the critical numberOver 10,000 baby boomers are

(04:37):
turning 65 every day and they'refast approaching an age where
senior housing becomes anecessity.
By 2025, nearly 80 millionAmericans will be over the age
of 65.
The sheer volume of peopleentering this demographic,
coupled with the limited supplyof housing, creates a serious
imbalance.

(04:58):
We're likely to see steepincreases in rent for senior
living facilities, especiallythose that cater to middle
income earners.
For investors, this could meanstrong long-term returns, but
there's a real concern aboutaffordability.
The luxury senior housingmarket is booming, but the lack

(05:19):
of affordable options means thatmany seniors on fixed incomes
will struggle to find suitablehousing.
It's an issue that will need tobe addressed either through
policy changes or new marketinnovations, but for now, the
numbers suggest we're headingtowards a significant supply
crunch.

(05:41):
Now I see opportunity in themarketplace.
Now I see opportunity in themarketplace.
There could be potentialopportunity in the marketplace
for investors to invest apassively with groups that
invest in the senior housingaffordable market, in the
affordable senior housing market.
Excuse me and be for you if youwant to get into the world of

(06:02):
real estate investing, to becomean 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 informedgives you the edge, whether
you're buying, selling orinvesting.
Make sure to subscribe to stayup to date the latest real
estate trends.
We'll see you next week withmore data-driven insights to

(06:24):
help you navigate the market.
Thank you, peace out.