The Villages is betting $180M on more retirees moving to Florida — where home sales are stale

The Villages, the largest retirement community in the US with roughly 170,000 residents across 57,000 acres in central Florida, is aiming to get even bigger.

The resort-like community plans to issue $180 million in high-yield debt primarily to finance more homes, according to an investor presentation this week.

The proceeds of the upcoming bond offering will fund construction of 3,860 new residential units and additional golf courses and recreation centers, according to Bloomberg .

The community is already massive, with more than 50 golf courses, 100-plus swimming pools, and several town squares, and its latest expansion bets big on luring droves of more boomers and Gen Xers to the Sunshine State.

But it's happening as the bond market is under duress , with even the mighty US Treasury market competing for investors. The housing market is grounded by high mortgage rates and high home prices. Florida has been hit particularly hard by the trends. Sales of existing single-family homes there were down 3.5% in September from a year ago, according to the Florida Realtors Association. And net migration into the state slowed sharply last year compared to the pandemic boom years.

What's more: The notion of what makes an ideal retirement community is evolving.

"The retirement relocation conversation in this country has been dominated by weather, taxes, and cost of living for decades," demographic strategist Bradley Schurman told Yahoo Finance. "Those are real factors, but they tell you almost nothing about whether a place will remain livable and financially viable over the 25 years that matter most to a new retiree."

The Villages taps into several essential keys to healthy aging — community and social engagement, along with a focus on fitness and recreation.

Its expansion plans would have around 260,000 people living there with more than 130,000 homes by 2045.

So far this year, more than 2,100 homes in the Villages have sold for an average of just under $500,000, per Bloomberg.

"There's still juice in these master planned communities like the Villages, and there's a market for them," Schurman said.

But while the Villages has been a colossal draw for retirees seeking warm weather, low taxes, and a low cost of living, more factors related to affordability and sustainability have entered the conversation.

An index released earlier this year ranked communities on climate resilience, automation readiness, social cohesion, population renewal, and governance and foresight. For example, if an area's population is stable or growing, basic government services are more likely to be funded.