Boomer Housing Conundrum

7 Factors to Consider When Choosing A Home to Retire In

Several years ago, we decided to move from a 2-story house to a ranch-style property. We weren’t in any hurry. Running up and down stairs wasn’t an issue. It was a hard decision because we loved our neighbors and easy access to freeways and shopping.

Finally, after looking at “empty nester communities,” we decided to build a ranch-style home in a regular neighborhood- figuring if we couldn’t cut the lawn or shovel snow, we could hire somebody to handle it.

We had the advantage of watching our parents age “in place” in their home because hallways and doors could accommodate walkers and bathrooms were retrofitted with grab bars. So we did some simple design changes to widen doorways, halls and eventually add useful grab bars when they are needed.

The article below from my friends at Keeping Current Matters covers key points about making the decision about retirement living. It’s an individual decision that some boomers are waiting too long to make. With the tight housing market in Cincinnati- don’t wait until you are forced out of your current home before figuring out your next step.

As more and more baby boomers enter retirement age, the question of whether or not to sell their homes and move will become a hot topic. In today’s housing market climate, with low available inventory in the starter and trade-up home categories, it makes sense to evaluate your home’s ability to adapt to your needs in retirement.

According to the National Association of Exclusive Buyers Agents (NAEBA), there are 7 factors that you should consider when choosing your retirement home.

1. Affordability

“It may be easy enough to purchase your home today but think long-term about your monthly costs. Account for property taxes, insurance, HOA fees, utilities – all the things that will be due whether or not you have a mortgage on the property.”

Would moving to a complex with homeowner association fees actually be cheaper than having to hire all the contractors you would need to maintain your home, lawn, etc.? Would your taxes go down significantly if you relocated? What is your monthly income going to be like in retirement?

2. Equity

“If you have equity in your current home, you may be able to apply it to the purchase of your next home. Maintaining a healthy amount of home equity gives you a source of emergency funds to tap, via a home equity loan or reverse mortgage.”

The equity you have in your current home may be enough to purchase your retirement home with little to no mortgage. Homeowners in the US gained an average of over $14,000 in equity last year.

3. Maintenance

“As we age, our tolerance for cleaning gutters, raking leaves and shoveling snow can go right out the window. A condominium with low-maintenance needs can be a literal lifesaver, if your health or physical abilities decline.”

As we mentioned earlier, would a condo with an HOA fee be worth the added peace of mind of not having to do the maintenance work yourself?

4. Security

“Elderly homeowners can be targets for scams or break-ins. Living in a home with security features, such as a manned gate house, resident-only access and a security system can bring peace of mind.”

As scary as that thought may be, any additional security and an extra set of eyes looking out for you always adds to peace of mind.

5. Pets

“Renting won’t do if the dog can’t come too! The companionship of pets can provide emotional and physical benefits.”

Evaluate all of your options when it comes to bringing your ‘furever’ friend with you to a new home. Will there be necessary additional deposits if you are renting or in a condo? Is the backyard fenced in? How far are you from your favorite veterinarian?

6. Mobility

“No one wants to picture themselves in a wheelchair or a walker, but the home layout must be able to accommodate limited mobility.”

Sixty is the new 40, right? People are living longer and are more active in retirement, but that doesn’t mean that down the road you won’t need your home to be more accessible. Installing handrails and making sure your hallways and doorways are wide enough may be a good reason to look for a home that was built to accommodate these needs.

7. Convenience

“Is the new home close to the golf course, or to shopping and dining? Do you have amenities within easy walking distance? This can add to home value!”

How close are you to your children and grandchildren? Would relocating to a new area make visits with family easier or more frequent? Beyond being close to your favorite stores and restaurants, there are a lot of factors to consider.

Bottom Line

When it comes to your forever home, evaluating your current house for its ability to adapt to you as you age can be the first step toward ensuring your comfort in retirement. If, after considering all these factors, you find yourself curious about your options, let’s get together to evaluate your ability to sell your house in today’s market and get you into your dream retirement home!

Downsizing your home in retirement can free up cash and lessen the burden of managing a large abode. But there are also reasons you may want to stay put, particularly with mortgage rates rising and inflation soaring.

“A lot of people who are staying in their home already have low mortgage payments and interest rates,” says Linda McCoy, president of the National Association of Mortgage Brokers. “If they do it right now, they are paying more to downsize from the house they’re living in.”

Home prices are also soaring. As of May, they are up 14.8 percent year-over-year, with the median existing-home sales price of $407,600 surpassing $400,000 for the first time, according to the National Association of Realtors. Even if retirees don’t mind the higher interest rate, they’ll have to pay more to downsize than before the pandemic.

Home affordability is a big reason not to sell, but it’s not the only one. Here are five others:

1. There’s no place to go.

For retirees looking to swap out a big home for a smaller one, there aren’t endless choices. Inventory is tight and properties are expensive. The viable ones may be out of their price range. With nowhere to go, some retirees are opting to stay put. “Prices are up and you can list houses for probably $100,000 or $200,000 more than you could two years ago, but what are you going to get?” says Carolyn Morganbesser, assistant vice president of mortgage originations at Affinity Federal Credit Union. “Let’s say you are lucky enough to find something. How much are you going to spend?”

2. You can afford to stay put.

For some retirees, downsizing is a way to free up cash to live off of. But if you can afford to maintain your existing home and are in good health, downscaling doesn’t have to be a foregone conclusion. You can wait it out until the market improves or age in place in a community you’re used to. “If they are comfortable mentally, physically and financially, they may stay put,” says Kent Pearce, managing director and senior financial adviser with Merrill Lynch Wealth Management.

3. Your adult kids are moving back in.

It makes sense for empty nesters to downsize, but if the COVID-19 pandemic taught us anything it’s that your adult kids might not be gone forever. Even before the pandemic, many kids were returning home. What better reason not to move than that? “The three variables not to downsize are location, family and accommodations,” Pearce says. “We’re seeing a lot more of the younger generation moving back in after college until they get situated.”

4. You want to put your equity to work.

Selling your home isn’t the only way to free up cash. In a tight real estate market with rising mortgage rates, a home equity line of credit, or HELOC, is another option. It’s a low-cost way to access equity without selling your home.

5. You prefer to age in place.

Despite all the talk of downsizing, there’s a large group of older adults who want to age in place. They like their home, the location, the community and their way of life. They simply have little reason to move. In responses to AARP’s 2021 Home and Community Preferences Survey, about three-quarters of adults 50 and older said they want to stay in their current homes or communities for as long as possible. What’s more, 69 percent would be open to sharing their home with a relative (other than a spouse) and 54 percent with a friend as they age.

About the Author:Donna Fuscaldo is a contributing writer and editor focusing on personal finance and health. She has spent over two decades writing and covering news for several national publications including the Wall Street Journal, Forbes, Investopedia and HerMoney.

Boomer Housing Conundrum

Boomer Housing Conundrum

7 Factors to Consider When Choosing A Home to Retire In

1. Affordability

2. Equity

3. Maintenance

4. Security

5. Pets

6. Mobility

7. Convenience

Bottom Line

1. There’s no place to go.​

2. You can afford to stay put.​

3. Your adult kids are moving back in.

4. You want to put your equity to work.

5. You prefer to age in place.​

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1. There’s no place to go.

2. You can afford to stay put.

5. You prefer to age in place.