As I said in my last podcast, people are always asking me for quick “market updates”. Today I’m going to give another quick assessment of the current Westchester market. The last podcast targeted first-time buyers. This podcast is about empty-nesters and others wishing to downsize.
You are going to need to be a bit patient with me while I set the stage. This is a bit more complicated than buying a home for the first time.
Although home values continue to push higher, in almost all markets, they are not doing so at the same pace. Many areas of Westchester have completely recovered and exceeded their pre-crisis market highs. Other neighborhoods are still off their pre-crash highs. The current housing market is generally quite vibrant, but it is also granular. So, while one neighborhood is chugging along with slow, steady growth others are really taking off. These differences are very location dependent and just a few blocks can make a great deal of difference price-wise.
This conundrum is impacting those seeking to downsize. If you are thinking of downsizing from a large suburban home, you probably have several goals in mind chief among them are:
The first three items on the list are very doable. But quite a few downsizing families are experiencing difficulty with the last item. Many in the 55+ group who want to downsize in this way have a mental picture of what their new life will be. They imagine themselves in one of the modern, spacious luxury condos or townhouses that they have watched going up over the past 10 years in their downtown neighborhoods.
Since they are selling a large home with often twice the square footage, they can’t imagine that banking a tidy sum from their home sale is not in the cards.
But, since in-town condos of this nature are in fairly short supply and land in these walkable neighborhoods sells at a very high premium, the price-per-square-foot on condos of this type often far surpasses what can be extracted from the sale of a single family home.
Lets take the example of a very popular luxury condo in a lower Westchester town. The median sales price over the past six months for one of the units in this complex was over $900,000 at about $560/sf. Conversely, the median price for single family homes in the same general area was $735,000 at about $315/sf. That gap is proving to be a major obstacle for some looking to downsize.
Unfortunately, this is an issue that isn’t going away any time soon. New construction that is in high demand has to planned, built and occupied on a very large scale before this disparity is going to be relieved. Further, the traditional suburban dream has been fading since the 2008 crash. Although I believe the suburban dream is merely delayed for many in this generation, the fact remains that millennials are not embracing the suburban lifestyle to the extent previous generations have.
So the gap between price points on these two types of housing is likely to increase, not decrease in the foreseeable future.
That doesn’t mean that such a downsizing is impossible. Quite the contrary. Many have done so successfully and are extremely happy in their new digs. But quite of few of these newly downsized families found that they had to make far more sacrifices in terms of either space or location than they initially wanted to. This will probably hold true for anyone who can not forfeit the idea of banking money from the sale of their home.
Careful assessment of needs vs. wants is what is needed in a case like this. A smaller space can seem large if the layout is good and the space is used efficiently. Living large in smaller spaces is the trend going into the future. And it is something that more and more of us are coming to embrace.
If you are considering downsizing, you may want to stay tuned to my newsletters and blog posts for more information in the coming months about making more space out of less.
© 2016 – Ruthmarie G. Hicks – https://thewestchesterview.com – All rights reserved.
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