Knowing when to transition to a new home can be challenging. Through the spring, homeowners have had the advantage of selling as property values rose sharply with inflation across the country. However, as mortgage rates rise and the traditional seasonality of our local markets take hold, we are seeing that rush of appreciation begin to slow. With no crystal ball to definitively determine how the market will shift in coming months, deciding whether or not it is the right time to cash in on your equity comes down to more than simply how big of a price tag you can stick on your current house. Here are a few important aspects to consider when choosing the perfect home for the next stage in your life.
Is Your Home Ready To Sell?
Many homeowners past retirement age have been in their family homes for upwards of thirty years, enjoying the advantages of a fully paid off mortgage and continuous growth in equity. When preparing to sell these older homes, it is important to address any potential repairs and upgrades that may influence – or even delay – the sale of the home. Although there is a perception among sellers that buyers can’t afford to be too discerning when there are so few homes to choose from, the reality is that condition matters. Structural, health, or safety related issues can scare off a lot of prospective buyers, limiting demand (and the prospect of competing offers) on your home. Similarly, an outdated interior or a property with noticeable deferred maintenance commands a lower price on the market than it would in pristine condition, regardless of housing inventory. It is a good idea to meet with your realtor in order to identify any upgrades or repairs your home may need before putting it on the market.
Is Buying Wise For Your Retirement Strategy?
Whether you are upgrading to your dream home, downsizing to something more manageable, or making a lateral move to a similar home in a new location, it is important to factor in how your finances will be impacted in the long run. Those looking to expand their real estate portfolio should consider properties with potential streams of revenue, such as short-term rentals and commercial property. A financial planner can help you determine what makes the most sense for your finances, while your realtor can guide you toward making sound property investment decisions based on your personal objectives..
In 2021, most homeowners over the age of 65 chose to move closer to friends and family, with many simultaneously relocating to smaller scale homes with less upkeep. Meanwhile, younger generations chose to purchase single family homes with more energy-efficient features, preferably with a low-cost commute to work. Interestingly, all age groups surveyed by the National Association of Realtors had a high percentage of sellers who chose to sell as a way to avoid making costly repairs to the property. Knowing when to move can be challenging, but knowing your property value and how selling can affect your finances are crucial first steps.