A Smaller Home Could Be Your Best Option
Many people are reaching the point in their lives when they need to decide where they want to live when they retire. If you’re a homeowner approaching this stage, you have several options to explore. Jessica Lautz, Deputy Chief Economist and Vice President of Research at the National Association of Realtors (NAR), says:
“As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millennial and Gen Z children or if they stay put in their own homes.”
Lautz lists two options: move into a multigenerational home with loved ones, or stay in your current house. Multigenerational living is rising in popularity, but it isn’t an option for everyone. And staying put may fit fewer and fewer of your needs. There’s a third option though, and for some, it’s the best one: downsizing.
When you sell your house and purchase a smaller one, it’s known as downsizing. Sometimes smaller homes are more suited to your changing needs, and moving means you can also land in your ideal location.
In addition to the personal benefits, downsizing might be more cost effective, too. The New York Times (NYT) shares:
“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.”
Being in a strong financial position is one of the most important parts of retirement, and downsizing can make a big difference.
A key part of why downsizing is still cost effective today, even when mortgage rates are higher than they were a year ago, is the record-high level of equity homeowners have. Leveraging your equity when you downsize can lower or maybe even eliminate the mortgage payment on your next home.
So, not only is the upkeep of a smaller home likely more affordable, but leveraging your home equity could make a big difference too. Your local real estate advisor is the best resource to help you understand how much equity you may have in your current home and what options it can provide for your next move.
If you’re a homeowner getting ready for retirement, part of that transition likely includes deciding where you’ll live. Let’s connect so you can understand your options and explore your downsizing opportunities.
Stay up to date on the latest real estate trends.
While much of the Bay Area is experiencing inventory issues, the vast majority of areas are seeing inventories begin to pile up. As we know, San Francisco has the oppo… Read more
Median sale prices in the East Bay have fallen for six months straight.
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Single-family home median sale prices rose by 4.42% on a year-over-year basis, while condo median sale prices rose by 10.52%. Additionally, the average single-family h… Read more
Single-family inventory levels are 20.05% higher on a year-over-year basis, and condo inventory levels are 13.15% higher.
Although many markets have seen a downtrend in pricing, San Francisco has remained incredibly resilient.
Although prices have been incredibly resilient in the East Bay, the future of this stability is very uncertain, as inventories have been growing at a tremendous rate.
Single-family homes continue to be a hot commodity, while condos continue to sit on the market.
Inventory levels are increasing drastically throughout the entire East Bay, with the area seeing over 40% more active listings than this time last year.
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