The University of Connecticut’s annual Connecticut Housing Conference was held last week at the Marriott Hotel in Farmington.

As baby boomers get older, they have very specific needs and desires when it comes to housing.

Some want increased security. Others want to plan for aging by making sure there’s a master bedroom on the first floor; that way, they can avoid climbing stairs if it becomes too difficult. There are also those who want peace and quiet and don’t want to live around rowdy children and teenagers.

As record numbers of people hit the age of 55, many of them are finding those necessities in the growing number of age-restricted housing developments in Connecticut. Today’s booming housing market makes it easy for boomers to sell their traditional homes at high prices and move into the smaller condominiums or two- or three-bedroom houses in over-55 developments. But that could change in the next decade, appraiser William E. Kane cautioned last week at the University of Connecticut’s annual Connecticut Housing Conference.

Kane, a partner at Cheshire-based Wellspeak Dugas & Kane, discussed age-restricted housing with a crowd of real estate agents, bankers and appraisers at the conference, which was held at the Marriott Hotel in Farmington.

Changing demographics – multitudes of people entering “older adult” status while the population of people in their prime homebuying years rapidly declines – and huge numbers of new age-restricted developments could combine to stall the housing market in coming years, Kane said.

In 2003, 3.5 million people turned 55 and the same happened in 2004, Kane said.

And although the market for age-restricted housing remains strong, with many of the developments seeing waiting lists and high absorption rates, the lack of buyers for traditional homes in the next decade could clog the housing market.

“I think the problem is going to come in the next 10 years,” Kane said.

Labor Pains

The number of age-restricted developments is growing for several reasons. One reason is the necessity for housing for the older demographic. Age-restricted housing is also attractive to cities and towns. Because most of the developments don’t allow children or teenagers, they don’t put a strain on communities’ school systems. Older adults also drive less and, after retirement, don’t usually contribute to rush-hour traffic.

“A lot of [age-restricted developments] are coming into the pipeline,” Kane said.

As more are built, the absorption rate will decrease, he said. That will be controlled if the market doesn’t become over-saturated with the developments.

The test will come in the next several years when the many developments that are in the planning stages come to fruition, Kane said, adding that there are currently about 36 new projects in the works. If developers continue to build at that rate, he noted, prices will decrease and it will be difficult to fill the new homes.

The traditional housing market also will be affected. Most couples or single people who want to move into age-restricted housing don’t go into debt to do it, Kane said. Because 80 percent of people older than 55 own homes and have built a lot of equity – the mean equity for people ages 55 to 64 is $111,719 and the mean equity for people ages 74 and older is $113,071 – they tend to sell their old home, buy the new, smaller home in the age-restricted development and put some money in the bank. But with the number of people aged 25 to 54 declining in the next 10 years, there might not be someone to buy the old home.

“There’s not going to be the [same] number of people to buy the house,” Kane said.

That will create a large amount of supply and drive down housing prices, he added, noting that “I think there’s going to be a problem in the pipeline.”

Kane also discussed several new age-restricted developments that are under way in Connecticut and the people expected to live in them. The developments range from the Massachusetts border to the south coast. Some are single-family homes and some are condominiums.

The complexes cater to married people 55 and older and to single people in that age range, who tend to be women.

“These are going to be two demographics to look for,” Kane said.

But although most of the developments are restricted to those 55 and older, the people who move in tend to be closer to retirement age, Kane said. A survey showed that 74 percent of people who live in age-restricted housing are older than 65. In mixed-age developments, 35 percent of people are 65 and older, Kane said.

“The older they get, the more they would prefer to live in age-restricted housing,” he said. “People will tend to move into these facilities after 65 rather than in their younger years.”

Also at the conference, Todd P. Martin, chief economist at People’s Bank, told the crowd that the country’s economic recovery is for real, but that it is not clear whether Connecticut’s economy will see a sustainable recovery.

The state’s economy seems to be moving in the right direction, he noted, but is still vulnerable to the national economy, the stock market and the state’s budget woes.

The state’s unemployment rate is still lower than the country’s, Martin said.

“That’s in sharp contrast to what was seen in the early ’90s,” he said.

But unemployment in Connecticut is still up from what it was in 2000.

“All labor markets have seen unemployment move up rapidly,” Martin said.

Numbers compiled by People’s Bank and unveiled by Martin at the housing conference showed Waterbury and Bridgeport – communities that rely partly on manufacturing jobs – as having the highest unemployment rates in the state. At the end of January, Waterbury had 6.9 percent unemployment while Bridgeport’s jobless rate totaled 6.2 percent.

Still, the state’s housing industry is doing well, Martin said. There were 9,985 permits for new houses in 2003, up 3.9 percent from in 2002, according to statistics presented by Martin at the conference. New London saw the biggest increase in permits, with nearly 20 percent more in 2003 than in 2002. The Lower River district saw the biggest decrease, a drop of 25 percent.

Martin summed up by saying that Connecticut’s economic growth has stalled and that “meaningful job growth [is] not likely until 2005.” He also said elements such as continuing unemployment, ongoing fighting in Iraq and the Middle East, a competitive election year, the possibility of more terrorist attacks, higher oil prices, a possible stock correction and national and state deficits could affect the national and state economy.