That’s today’s headline on CNN.com, just days after the New York Times wrote an in depth feature about the housing slump and its impact on seniors trying to raise money for a move into assisted living.  The S&P Case Schiller Home Price Index recorded a record drop in home prices in the third quarter of this year (during the summer months before the economic crisis really kicked in).  Home prices have shrunk back to 2004 levels wiping out home equity gains from almost the last five years.  

The Index shows drops in the major markets tracked as: “Phoenix the 12-month loss came to 31.9%. Las Vegas prices plummeted 31.3% and San Francisco recorded a 29.5% decline. The best performing markets, Dallas and Charlotte, N.C., still posted drops of 2.7% in Dallas and 3.5% in Charlotte.  

Miami is down 28.4% year-over-year; Los Angeles, down 27.6%; San Diego, down 26.3%; Washington, down 17%; Chicago, down 10.1%; New York, down 7.3%; Boston, down 5.7%; and Denver, down 5.4%.

Detroit is down 18.6%; Tampa, Fla., down 18.5%; Minneapolis, down 14%; Seattle, down 9.8%; Atlanta, down 9.5%; Portland, Ore., down 8.6%; and Cleveland, down 6.4%.”

These numbers do not take into account the impact of the drop in the stock market, increases in foreclosures, growing unemployment or any other bad economic news over the last couple of months. The scary part is how these numbers are going to look once the bad news that started hitting in October and November are factored into the next Index report. 

To read more about the Index report, click here.

The New York Times correctly identified a critical problem that will only grow for both seniors and the Assisted Living industry: the virtual collapse of the U.S. housing market.  The drop in home values and the difficulty sellers are having finding buyers is severely hampering the ability of seniors and their families trying to raise enough money to be able to move into assisted living communities.  In June, 2008 the National Association of Home Builders released a report showing almost $500 billion in home equity had vanished.  Since then, as the economic situation has gotten considerably worse, it would be safe to assume that number has grown. 

The New York Times article interviews a number of families who have had to delay or forego all together moving into an assisted living property.  These are people for whom living on their own becomes more and more dangerous, but they can not afford to secure the appropriate living environment.  They don’t need to move into a nursing home and go onto Medicaid, yet they are now at the stage that the level of attention and care they would receive in an assisted living property has become a necessity. Families and assisted living communities need to do all they can to access alternatives for funding.  There are numerous options available to raise money from assets other than a home—and in today’s economically challenged environment it is critical that families take the time to learn about what is available to them. 

Click here to read the New York Times article: Unable to Sell Homes, Elderly Forgo Move to Assisted Living

The impact of this economy on seniors and their families has been particularly difficult.  Housing values are down significantly and the time it takes to sell a home is now measured in months instead of weeks. Income from retirement accounts and investments have been reduced in many cases by half or more due to the volatile stock market.  For those now facing decisions about retirement and possible moves into senior housing, assisted living and long term care the impact of the economic crisis has been rapid and unforgiving.  Further compounding the problem is the fact that experts agree we are still in the early stages of this situation and not only unsure of how this crisis will continue to unfold, but how many years it will take for things to return to "normal". 

As we talk to seniors and their families all around the country every day they are sharing their frustration and fears with us.  They had worked and planned for years to enjoy a reasonably comfortable and secure retirement; and when the time came to move into an assisted living community or long term care nursing center they were counting on the value of their assets to be there to cover those expenses.  When the value of your primary assets such as a home or an investment portfolio is cut in half-- it does not leave you with many attractive options.  That is why during these troubled times it is critical that people take the time to understand how their personal finances have been impacted and how that projects out for the future.  Too many people wait until it is too late to learn about all of their options and what they can do with the assets available to them to try and secure their financial future. 

The article attached is a sobering look at what it happening to people as they reach their retirement years in the midst of this economic crisis.