Welcome to the Westchester View’s first podcast. This is hopefully the first of many podcasts on the state of the Westchester real estate market. I hope you enjoy the content and find it helpful and informative.
The great boomer “downsizing” has begun in earnest! Over the past couple of months I have been working with several empty-nesters as they tackle the good, the bad and the ugly of downsizing.
So I wanted to take a minute to address an issue that is coming up a great deal when people consider downsizing. Its called “sticker shock” and it was something that most were not expecting. Downsizer’s are finding is that the slick townhouse or condo they have their eye on can cost almost as much as what they can sell their far larger single-family home for. This is often a hard blow for those who were hoping that the transition would allow them to “cash out” a significant sum for their golden years. It seems very unfair that they are making a lateral move with almost no money to bank in order to purchase something with no land and half the square footage.
But the housing market is driven by supply and demand and fairness is not part of the equation. Times change and that rolling lawn and car-dependent lifestyle that was the boomer’s American dream, is not shared as much by the millennial’s or even genX’ers. The demand has shifted away from a big house on a large private lot. A home on a small lot in a walkable neighborhood where town and train are just steps away is what rings most current buyer’s bell. The result is that that walkable condo costs more per square foot then the house, because what you are buying is more than raw space and land, you are also buying a lifestyle.
Potential downsizers need to take a step back and ask what it is that they are really trying to do. Does a lateral move make sense. At first blush, one tend to say no. But in many cases it does.
Now, before you knock me upside the head for being totally insane, let’s look at the entire picture.
Most people have three goals in mind when they downsize:
So what I am saying here is this: two out of three ain’t bad. Whether it is enough depends on your unique financial situation.
There is something else as well. We are currently still in the early phases of a bull housing run. Unlike the stock market, housing tends to have long cycles. There have been no massive price run-ups in recent years but we are seeing steady appreciation. That condo or townhouse you purchase today, will probably be worth more tomorrow. If you decide to sell in several years because you need to bank some cash, this market is putting you in a position to make a decent profit.
(Caveat – I can’t make guarantees – that lesson was learned during the housing crisis – and no, I’m not talking about doubling the investment in 5 or even 10 years. Hopefully those days are gone for good.)
If your retirement plans do require that you bank money from your home sale, there are ways to do so. It will of course require some compromise and some adjustments on how much home you can purchase or the precise location. Often its just a matter of scaling back from a true luxury complex to one that is slightly older or has fewer amenities. This can be a difficult pill to swallow for a homeowner with a large home that they really hate to leave in the first place. But as a real estate agent I really can’t manufacture a market. My job is to help each client succeed with the market they are presented with. That is my job and my pleasure.
© 2015 – Ruthmarie G. Hicks – https://thewestchesterview.com – All rights reserved.
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