Historically, about 60% to 70% of Rossmoor homes have typically sold for cash, Beall estimated. But since February, virtually all sales have been cash only — the few exceptions being buyers using alternate types of mortgages and financing.
The cash-only crisis hasn’t slammed the community as hard as many feared, but it has had an impact. Home sales are down, but only by about 10%, from 513 from January through November 2023 to 457 over the same time period in 2024 — in large part because many people looking to buy in a retirement community are cash rich, having sold bigger, pricier houses elsewhere before deciding to move to Rossmoor.
In addition to the effect on home sales, the crisis has made it difficult, if not impossible, for retired residents in need of cash to get reverse mortgages — which some need to cover medical bills, rising monthly fees due to insurance costs, and a general increase in the cost of living due to inflation, Beall said.
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While the rising rates of [...] personal policies have soared, like many homeowners policies across the state, Rossmoor’s big problem is with the master policy. The community and residential structures are valued at about $2.77 billion, but the foundation was able to afford enough insurance to cover only about 43% of that value, said Jeff Matheson, general manager of the Golden Rain Foundation.
“The last several years it has not been feasible to get more insurance coverage,” he said.
But it’s also unlikely that anything but the worst imaginable fire — a 1-in-10,000-year event — would exhaust that amount of insurance, he said. All claims would be paid at 100% until the maximum limit — about $1.3 billion — would be hit.
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At the start of 2024, [Fannie Mae and Freddie Mac] refused to financially back mortgages in Rossmoor unless the community was fully funded for a 100% loss.
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