Photograph by Kathy De La Torre

Leigh Ann Wolfe is well versed on the subject of retirement and senior housing, but she's not eager to leave her Monte Sereno home with its lush garden, visible through the window in her office.

Home Delivery

Young millionaires would like West Valley old-timers to put their homes on the market. Instead, many seniors are staying put.

By Sandy Sims

With stock-rich buyers outbidding each other up to $2 million over the list price on houses, today's real estate market in Los Gatos, Saratoga and Monte Sereno has become an auction gone mad. On the other side of the coin, there are the long-time homeowners--people who put down stakes in the West Valley years ago--sitting on virtual gold mines.

The young millionaires would like nothing better than to see the old-timers pull up stakes and move on, leaving more houses with Saratoga, Los Gatos and Monte Sereno addresses on the market. That conceivably could create a less competitive atmosphere for affluent young families who want to put down stakes of their own in the West Valley.

Who could blame older homeowners for cashing in? They could pay off their debts and retire to a cozy little abode where they could live out their lives in comfort.

There's just one problem. Why would anyone living in paradise want to leave?

Lee Ann Wolfe, co-author with husband Ravel Wolfe of Best Retirement Living Residences in California and the West, says there's a huge population of seniors in Saratoga and Los Gatos who are poised to make a move. They want to cash in on this real estate market, but if they do, they must leave the area to find senior retirement communities. And they don't want to go.

Why would anyone who already owns a home want to leave this Mediterranean climate, the lush green hills and small-town communities? They don't want to leave friends, clubs and religious affiliations--roots. And as retired folks, they are in a perfect position to enjoy the valley's economic and cultural boom without the hassle of fighting morning and evening commutes.

So we have a stalemate. Young people want to move in. But seniors aren't budging. All of which drives up the price of the few houses on the market. The logjam might break up if seniors had more housing options in Los Gatos and Saratoga. What's missing, says Wolfe, is housing for younger, active seniors, a place where they can enjoy the fruits of retirement and the profits from their homes, and without moving into continuing care facilities traditionally for older, less active adults.

"It's not just a Los Gatos-Saratoga problem," says Wolfe. When it comes to building housing for active seniors, Northern California lags behind the rest of the country. The only South Bay retirement community is The Villages in San Jose's east hills. And it's sold out.

In Saratoga, say real estate agents Madeline and Gary Chiavetta of Fine Homes & Estates/Seville Contempo, they are seeing the over-65 set staying put, while very young seniors--those old enough for membership in the American Association of Retired Persons, but not considered seniors by most standards--are cashing out and heading for luxury planned communities not far from the Bay Area.

"One popular spot," says Madeline, "is Pasadero, a planned community in Monterey designed around a Jack Nicklaus Signature golf course." Another popular destination for the 50-to 55-year-old set in Saratoga, she says, is Silver Creek Country Club.

For older homeowners who don't want to leave their West Valley communities, the options are more limited.

Other parts of the country have built large complexes that are thriving. "It's big business," Wolfe says. She says Los Gatos and Saratoga have typically opposed the high-density housing that would be required for these younger, more active seniors.

"We've got to get over this problem with high density," Wolfe says. "We've got lots of people and very little land." Wolfe says that seniors not only don't mind high-density housing, many prefer it since living closer together feels more secure.

"And we need to plan ahead," Wolfe says, "because the senior population is growing." In fact, the fastest growing segment of our society is over 75, and 70 percent of those own their own homes.

"I talk to people everyday who say, 'I would love to sell my house, but I don't want to move away from here,'" Wolfe says.

"Seniors are out of luck," Saratogan Desanka Popovich says. "We have to leave the area to make a profit on the sale of our house." Popovich and her sister Zorka Ficovich have lived in Saratoga since the 1920s. Both sisters even have streets named after them, and both have lived in their homes for decades. Their doctors, friends and family are here. "Who wants to move away from familiar surroundings?" Popovich says. "My husband and I will stay in this big house till we go to the great beyond."

Retired Saratogans Wayne and Tennys Biederman could make a killing in today's market. They built their home on a third- acre in 1971 for $60,000, a large sum in those days. They think about the prospect of selling. "If I moved, I don't know if I would move out of Saratoga," Tennys said. If she moves, she wants a place with no yard work or major upkeep so they would be free to travel. "We'd want a golf course and stores nearby. We've got that right here," she said. Their young-adult daughters are still around, too. "We're not ready to move yet." In fact, they have plans to add on to their home but haven't started yet.

The Biedermans, however, did watch long-time neighbors Robert and Mary McCutchin sell their home and move south, but not necessarily because they were sitting on a gold mine.


Photograph by Kathy De La Torre

The Terraces is experiencing a wave of applications and the waiting list is growing. For some seniors, continuing care facilities provide the best alternative when it's time to leave the family home. Celebrating their birthdays during the monthly birthday luncheon are (from left) Doris Prince, Jane Roney and Frances Apgar.




According to Wolfe, about 10 percent of the older homeowners are cashing in and moving out of the area. But the escalating real estate market may not be the reason they're leaving, as was the case with the McCutchins. Traditionally, older people have left large family homes simply to scale down and move to smaller residences with less upkeep.

"Don't wait till you're 80 to move," 80-year-old Robert McCutchin said in a telephone interview. "We're still unpacking, and we moved four months ago." The couple moved to a new condominium on the 15th hole of a golf course in San Juan Capistrano. Mary McCutchin is glad they don't live in a senior retirement community. They have a 3-month-old baby living next door. "When I drive past Leisure World, I thank God I'm not living there," Mary says.

The McCutchins, who built their Saratoga home 27 years ago for $70,000, sold it last year in a bidding war. The house sold for well over list price to someone from Cisco Systems. "I felt bad about the high price, but I do know how well Cisco Systems is doing," Robert says.

The McCutchins took their own financial hit when they had to pay capital gains tax. The $500,000 federal capital gains allowance for couples over 55 did not shelter all the profit on the sale of the McCutchins' house. They will receive a property tax break because they moved to one of the 10 California counties that will transfer the Proposition 13 tax break. Robert explains that they had to pay the new tax rate when they bought their condominium but are supposed to get a refund on the overpayment.

The booming real estate market was not the reason they moved, Robert McCutchin says. The couple had discussed the move for a while with their two children and decided to move closer to their son and to Mary's family. "We lived here in 1943 as newlyweds," Robert says. "That's when I was trying to become an actor," he says laughing.

The out-of-sight market is spurring on a few to sell.

A year ago Sally and Gene Antonides moved to a Del Webb retirement community in Roseville. "We would have preferred to stay in the area, but we didn't like the Villages, and there was nothing closer," Sally Antonides said in a telephone interview. They have family, including adult children, parents and siblings living in other parts of the state and country.

Gene retired from Lockheed and did well on the stock market, but the booming real estate market was an added incentive to sell. It was a decision they'd been struggling with for a while.

The Antonides' elderly parents told them that moving is hard but energizing. "Our kids also told us to go for it," Sally says. "We figured we'd give it a try." Sally, who once managed an employee health program at a large hospital, says, "We didn't even put our house on the market."

Once the Antonides mentioned to neighbors that they were thinking of selling, a buyer showed up. A Los Gatos man offered cash for the four-bedroom, two-bath house the couple had bought in 1967. The buyer was, in fact, selling his own larger house in Los Gatos and downsizing.

"If our house had gone on the market," Sally says, "we would have been in a bidding-war situation, but we wanted to sell the house as is and cash out." Three years earlier, the Antonides had a house inspection and fixed the existing problems.

Cashing out meant the Antonides paid a hefty capital gains tax "which hurt," Sally says. And Placerville County, where they now live, didn't allow them to transfer the old tax rate they enjoyed as homeowners before Proposition 13.

The Antonides were also able to dictate their own terms, which included staying in the house till after Christmas. The family spent Christmas here for one last time, Sally says.

Sally says she feels a sense of freedom in her new place because of the open space. But leaving Saratoga was not easy. "I try not to get emotional about leaving our home, and I like it here more and more," she says. The other residents at Del Webb are close in age to the Antonides. The average age is 60-something, and some are still working. The Antonides even traveled to Australia with new neighbors. "Our kids and grandkids love to visit us," Sally says. "There's even a grandkids' camp here."

The Antonides haven't lost their ties with Saratoga, however. Old friends visit, and Gene kept his membership with the West Valley Joggers and Striders. He may not continue the membership five years down the road, Sally says, "but it's a nice connection for us."

The Del Webb organization thought this community would fill up in five years, Sally says. Instead, it sold out in three years. Now Del Webb is building an even ritzier community six miles down the road.


Photograph by Kathy De La Torre

The demand for more senior housing in Saratoga and Los Gatos is great, but the communities have not been enthusiastic about high-density housing. One continuing care facility in the making is the Saratoga Retirement Community, formerly the Odd Fellows Home. This model shows the completed expansion from 219 to 500 units. Due to open in 2004, the waiting list has already hit 450.




While many younger seniors like the Antonides want housing for active independent seniors, Los Gatos and Saratoga have favored continuing and life care retirement communities such as The Terraces and the Meadows in Los Gatos.

These communities offer different levels of care, so that residents can live out their lives at the facility. Residents can move from independent living units (which include everything from a few prize, private bungalows to studio apartments), to assisted care and, ultimately, to skilled nursing care. Residents never need to move away from the community. However, new residents cannot have severe health problems when they enter and must be financially able to afford the long-term cost. The cost structure varies with each facility, but these are comfortable upscale living arrangements.

These two facilities, created mainly for older seniors, suddenly have more and younger people applying--possibly because of greater awareness about the length of waiting lists.

Saratoga has one continuing care in the works. The old Odd Fellows Home, now called the Saratoga Retirement Community opened its residency to the public in the mid-'90s. After a long battle with the city council the facility got approval to become a CCRC and to grow from 219 units to 500 units with four levels of care. The entire facility is scheduled for completion by 2004. Gary Vernon, the Saratoga Retirement community Administrator says, "We already have a waiting list of 450 people."

Our Lady of Fatima, the extended care facility in Saratoga, is trying to transform into a two-level care facility. Management wants to add 34 assisted-living units and convert one of its wings into eight assisted-living units. Assisted living is designed for people who need help with daily care, such as bathing, housekeeping and shopping but don't need skilled nursing.

Preston Wisner, CEO at Our Lady of Fatima, says they are having difficulty getting the city council's approval. He says the need for assisted-care housing is growing dramatically. "We get three or four requests for assisted housing a week," Wisner says. "I have to refer them out of the area." Wisner says the senior population is growing exponentially. "Right now," he says, "there are over 19,000 centenarians in the country. By the year 2003 that number will jump to 30,000, by 2050 the number will be 834,000"

Pam Bancroft says, The Terraces is seeing a dramatic increase in its waiting list. "We received 20 applications in the last month," Bancroft says. She thinks the waiting time for a place at The Terraces will jump from what used to be a one-year or 1 1/2years guesstimate to a two-to five-years guesstimate.

Bancroft says applicants are getting younger, too. A typical applicant at The Terraces used to be 79 to 86 years old. Now applicants are 74 to 83 years old.

The application process itself may be long. At the Meadows there are the medical review, the interviews with the board and a financial review. Sometimes the application process takes more than a year.

Planning for the future is not easy emotionally for seniors. It involves some hard realities. For instance, Lee Ann Wolfe says, "seniors must realize that even if they are marathon runners in their early 70s, five years later they may face serious medical problems." Seniors also face simplifying their lives, letting go of possessions, work and homes.

Eva Decker, a San Jose resident, has signed up on The Terraces waiting list. She hopes it won't take more than a year. Her house is large and she decided it's time to move.

"I want to be near stores and close to my daughter in Los Gatos," Decker says, who faces the difficult problem of downsizing. She is an art expert and has a good size reference library. "I want to take my library with me," she says. But she knows moving from a 2,300-square-foot house to a 900-square-foot apartment will be difficult.

Wolfe speaks to various organizations about planning for retirement years. She gets calls every day from seniors who are figuring out where to live and what to do next. Abruptly selling because the market is booming can be a big mistake, Wolfe says. There's a process you must go through, looking at what your goals are, what you want in a living situation, where your children are.

Rick Bonetti, a senior real estate expert with Alain Pinel in Saratoga, says seniors want to make a positive move. Usually they want safety, security, home maintenance and activities, and not to be a burden on their loved ones. In fact, activities and community are a big draw to senior housing. His 90-year-old mother moved to the Forum, a CCRC in Cupertino, four years ago. "She loves it," he says. "It's the cruise ship that never leaves town," Bonetti says. There his mother takes yoga lessons, goes on day trips and has enjoyed buying new furniture for her little place. She still drives, he says.

Bonetti says what's missing in Saratoga and Los Gatos are single-level town houses. Two-story townhouses are being built for families when the biggest market is seniors.

Careful financial planning is also important. There are ways to structure the tax consequences. For instance, Candy Taylor, real estate broker with Fred Sands Landmark Properties in Los Gatos, says she often refers people to a tax attorney. "You have to be very careful," she says.

Taylor says people in this area have been able to declare raw land as agricultural under the Williamson Act. It's a great tax break, but it can backfire when a person sells. If they don't reclassify their land, and they sell to a buyer who plans to subdivide the land, the seller will pay a whopping 12 percent tax penalty. Even homeowners who plan to stay in their homes and leave them to the children need to pay attention to the tax laws.


Photograph by Kathy De La Torre

Although many seniors cling to the family home, others are happy to move into continuing and life care facilities, where, among other amenities, meals are served in a dining room, as in the Saratoga Retirement Community.




Willys and Betty Peck of Saratoga have no intention of leaving their beautiful home along the creek. "The market means nothing to me," Betty Peck says. "We have everything right here." Willys figures he will go out feet first, and says they are leaving their home to their children. The tax laws allow them to hand down their Proposition 13 tax break to their children.

John and Barbara Baggerly are in their 80s and still living in their Los Gatos home. Their one acre of land shaded by 17 oak trees is near downtown. "We couldn't stay if it weren't for our son," John Baggerly says. Fortunately, John Jr. lives with them and takes care of all the upkeep and heavy work on the house. The Baggerlys will leave their property to their children.

Whether they're staying or selling, long-time residents are feeling the pressure from real estate agents.

"Real estate is the hot topic here at the Saratoga Senior Center," says director Mary Richards. Seniors are getting calls late at night from Realtors. Realtors are even leaning over fences as the seniors dig in their gardens to say, "Are you interested in selling. I have buyers who will pay top dollar."

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This is the second in a three-part series on the real estate boom. Next week: The boom from the agents' perspective.

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