Have you ever fantasized about living your retirement years on the road in a recreational vehicle?...
Is Now the Right Time To Buy Retirement Housing?
What Can Homebuyers Do?
What can senior homebuyers do in the face of this robust demand environment? Here are some possible options:
Do the Homework
Thoroughly research the real estate market in the desired location. National averages don't apply evenly in every market, so awareness of local conditions is essential. Greater knowledge will increase a buyer's ability to accurately identify a good deal when one comes along.
Consider Alternatives to Single-Family Homes
Buyers who are used to the single-family home experience may be uncertain about condo or townhouse living. However, there may be significant advantages in less upkeep, extra amenities, one-level floorplans, and getting more home for the dollar in today's market. On the flip side, buyers need to factor in additional costs like homeowner's association (HOA) fees. Also, it's essential to research the HOA to make sure it is financially solid and competently managed - click here to learn how!
In today's hot real estate market, cash is king. Buyers making cash offers have a significant advantage. Older adults with substantial equity in their existing homes may end up with a cash pile after a sale. That cash could make the difference in a bidding war for a desirable property.
Consider a Two-Home Solution
Seniors may assume that the only logical choice is to sell their existing home and plow the proceeds into a new property elsewhere. However, if one's current home has no mortgage, perhaps an option would be to buy a property in the new location and keep the current home. Although this may require a mortgage for the new home, refinancing the original home might free up the necessary cash. The existing home could then be rented, and the monthly revenue put toward the mortgage. This way, the buyers could still enjoy moving to a new location, and if the move doesn't work for the long run, the option of moving back to the original home is open.
If the motivation for moving is to have a more senior-friendly floor plan, perhaps remodeling the existing home presents a possible option. Not only would this result in a more desirable living arrangement, but updating the style of the house will make it more saleable in the future. This option does face the challenge of supply and contractor availability constraints. However, if the homeowner has the time and money, this might be an attractive alternative.
Wait it Out
The housing market, like all markets, goes in cycles. Coming out of the COVID-19 pandemic, the demand that's been on hold for many months is flooding the market. Eventually, supply will catch up with demand, but no one can predict when this will occur. Some experts warn that trying to time the housing market is as uncertain as timing the stock market. Nevertheless, the pandemic is an unusual event, so taking some extra time to see how things sort out for the remainder of 2021 may not be a bad strategy.
Seniors considering a move need to inform themselves not only about real estate market conditions and financial dimensions. They also need to think through their motivations for making a move and carefully consider the pros and cons of various alternatives to make the best decision.
Learn more about preparing to move on our Housing Resources page!