When we put our suburban house on the market last summer we were surprised to find all our neighbors coming over to check it out. Some people wanted to know where we were going. Other neighbors came to check out the kitchen, bedrooms and to find out the asking price.
It turned out that many of our neighbors – at least the ones who were 60 and beyond – were thinking about doing the same thing. They were interested in downsizing and moving to Florida or the Carolinas. They wanted to trade in their big family home for a little house in town or a two-bedroom condominium in a complex with a pool and an activity center. Many friends had been thinking about downsizing for years, but had done nothing about it because of the hangover from the great recession. Nobody wants to sell their house for less than what they paid for it, or to put their house on the market and watch it sit there unsold. However, we received a full price offer the first day our house was on the market, and we closed in 60 days.
Some people feel trapped by a large home in a high tax community and handcuffed to the job that pays for that lofty cost of living. Those with high housing costs might not be able to afford to retire unless they move to cheaper digs. Many empty nesters are looking for smaller, more reasonable homes that produce lower utility bills and require less maintenance. But first you must be able to sell your current home. Some baby boomers have been delaying retirement and postponing any move, perhaps because they could not sell their homes or would take a big loss if they did.
But now the economy has improved. Home prices are going back up and selling faster. According to the Case-Shiller index, home prices have increased almost 6 percent in the past year. On average they have almost recovered to their pre-recession highs of 2006, and in many places they have reached even loftier levels. If you’ve been thinking of selling your family home and relocating in retirement, now may be the time to act and take advantage of the seller’s market while you can. If you’ve owned your home long enough, you might be able to achieve a tidy profit.
We sold our house and rented a condo for a year. We’ve been spending our spare time looking for the place where we want to retire and shopping for a new, smaller home with easy upkeep. The inventory of homes for sale is low, and there isn’t a whole lot to choose from. Prices are high in select locations, and you may have to make some compromises. You might choose a house a few blocks back from the beach, rather than on the waterfront. You could pick a house a little way out of town instead of an in-town home with sidewalks. Or, if you do find a home in town, you might have to settle for less property than you want, or be happy with a one-car garage.
There are no simple ways to find a less expensive home that includes all the amenities you want. But at least now, with the housing market more active, you have some options that haven’t been available for years. And don’t forget, if you’re downsizing and buying a house for less than what you’re selling for, you get to put the difference in your pocket – or your retirement account.