You’ve made it! You’re retiring and finally ready to move and find your own slice of retirement real estate. At Personal Realty Advisers, we’re fortunate to work with many retirees: individuals and couples who are making a major life change—often looking to trade an old home for a new one. One would think that working with “retirees” would be easy—a one-size-fits-all approach—but our 60+ population is anything but uniform.
Today’s retirees don’t have the same constraints when selecting a home. Work is optional and life is an adventure. Many are not tied to a specific job location; they don’t need a certain number of rooms for children; and they usually are not as financially constrained as they were in their younger days. As a result, the home buying options are endless, and the decision about selling, moving and what type of home to buy can be daunting.
To start your home buying process on good footing, it’s helpful to stop and take stock of a few things. Below are some of the big questions to ask yourself during the home buying planning stage:
- Where do I want to live?
- Should I downsize or upsize?
- How much house can I afford?
- How much house can I afford or want to take care of?
- What needs will I have in the near and distance future?
- What type of lifestyle is important to me today?
Where Should I Retire To?
Several studies rate numerous Florida cities as the best places to retire, and each has its own charm. Some Florida cities have a bustling downtown urban core; others tout serene Gulf coast waves in an eclectic community.
Bottom line: Figure out what’s important to you and what you enjoy doing. We always recommend clients spend a good deal of time in their suspected ideal location to make sure it’s a fit. That allows them to learn as much as possible about the community and how it may fit (or not fit) their lifestyle.
Should I Downsize or Upsize?
The size of your new retirement home is a big consideration, and you need to weigh the pros and the cons of home size and how it will fit into your life during retirement.
Some reasons people choose to downsize according to Upnest are to save money, to own their home outright, to have lower utility bills, and to have easier home maintenance.
Despite the logic of downsizing, things have changed in the last few years, and a new trend has emerged. Rather than downsizing or right-sizing, many retirees are starting to upsize—moving to bigger homes in their golden years.
Several recent studies have found about half of the retiree population is exploring upsizing. That decision can be driven by the desire to have more room for family to visit or to have new home features they now can afford and have time to enjoy fully.
The upsizing trend has picked up intensity recently because a perfect storm has converged to make upsizing more possible for retirees. This is due to lower interest rates, strong returns on investments, and a new desire resulting from the pandemic to enjoy more time at home.
Cash-in-hand, current investments, and funding opportunities all come into play in the home buying decision-making process. The greatest financial resource many retirees have is the equity in their current home. How they choose to use that equity varies greatly. Some want to realize that equity by selling their home and using those proceeds to fund their retirement fully. Others are eager to take advantage of low interest rates and other financial incentives targeted to seniors for home buying (such as the Home Equity Conversion Mortgage).
Record low interest rates have been enticing for recent homebuyers. That includes for retirees who currently are enjoying strong stock market returns, which is why many want to keep their money in the market.
In addition to determining how much house you can afford; you should also ask yourself how much home you can afford to take care of. One of the down sides of upsizing is the increased regular housing costs such as higher property taxes, utility bills, insurance, and routine maintenance.
In addition to the costs for home care, the physical and mental labor can be significant. Upkeep for any home is not easy, but upkeep on large homes can feel unending. You’ll have more square footage and more bathrooms to clean, more landscaping to care for, and larger replacement costs on things like roofs and siding. All of these are exponentially larger in a large home, and they may be more than you want to manage during retirement.
It also is important to keep abilities in mind during the home buying process, especially in planning for future life stages when you may want or need more convenience and assistance. That beautiful two-story rural home you’ve had your eye on may work well for you early in retirement, when you’re much more active, but it may not be ideal in later years. In your later years, a single-level home in a walkable area with easy access to healthcare may be most ideal for you.
Kiplinger provides a comprehensive list of the housing options and stages we all may face when we retire. The options are not meant to be either/or, but rather alternate forms for the various stages of retirement life.
Finances and home size are only a couple considerations in the retirement home buying process. How you plan for your next home also has a great deal to do with your interests and life stage.
Lifestyle considerations is one category where we see the greatest differences among retiree homebuyers. Outlooks on family and friends, type of neighborhood, socialization, and ability to engage in important causes all are factors that come into play.
This is where the difference in Realtor experience becomes more important. The best real estate agents and real estate brokers work to identify what’s important to you, which is key to helping you find the right fit for your retirement home.
According to a study by the National Association of Realtors, desire to be closer to friends and family is a top reason why Baby Boomers move. Some of our retirees want to move to a hip neighborhood, so they can socialize and enjoy the benefits of a thriving community. A “fear of missing out” also can be a powerful motivator, when retirees desire a more prestigious home and desire to be recognized as such.
Active lifestyles in early retirement is also important in choosing a home. U.S. News & World Report highlighted a list of 10 lifestyles that represented great diversity among our retiree population—everything from golf, volunteering, beach life and more.
The “power of purpose” is another consideration described by Age Wave as how to use our newfound time and the power and flexibility that provides us. Consistent with research about creativity peaking later in life, some of our retirees need space for creative ventures that have taken on a life of their own; maybe even a second career. Retirees with a strong sense of purpose are happier, healthier, and live longer. Having a home that caters to your new found purpose is important.
Other retirees are ready to slow down and are looking forward to a space that’s peaceful and quietly inspiring.
The pandemic also greatly shifted the habits of retirees. With travel being more problematic these days, retirees put more of their time and savings into their homes where they can enjoy their personal living space.
How to Find the Perfect Home
The choices are endless and the research buyers must do is extensive. So, what comes next?
Sometimes the planning and decision-making process is a family affair, with adult children participating actively every step of the way. Others may need more hands-on assistance from their Realtor if they are going through the transition alone.
The choices are not easy. From decisions about life changes to taking all the steps for transition, working with retirees is engaging, challenging and rewarding. Whatever the challenge, we always are eager to participate in this important transition to help our clients buy their dream retirement home, and/or sell their current home.
If you or someone you care about is getting ready to make this kind of life change in their home setting, contact us at Personal Realty Advisers. We will take the time to understand your needs and help you find the perfect retirement option. We have more than 30 years of Florida real estate experience. Our Real estate Broker, Rob Coscia, is a Certified Senior Real Estate Specialist (SRES). He also holds one of the top real estate certifications held by only 2% of all real estate professionals. We work with no more than five active clients at a time in order to ensure a personal detailed experience for each client.