I spent Sunday at the office as I usually do when I'm not booked with clients. About 2 pm, in walked a very nice couple looking for information about retiring to Lewes, Delaware. I stopped tweeting, closed down Active Rain and we all sat down to talk.
Like so many newcomers to Coastal Delaware, this Boomer couple is about two years from retirement and they wanted to begin exploring their options here in Lewes, Delaware. I asked what brought them here and learned that their favorite restaurant is right across the street from our office - The Buttery! For years they had been vacationing in Bethany Beach, about 20 miles south of Lewes, but they felt that Lewes would be a better place to retire. Bethany, they felt, is more seasonal while Lewes has become a year round town in which to live.
So, how did a Zestimate ruin their day and what is a Zestimate? When I asked them where they lived now and what they thought their current home would sell for, they hesitated and said they hadn't talked with any agents yet. Turns out they had lived in their home for over 20 years; they asked me how they could find out generally what their home was worth without taking up an agent's time right now. You see, they aren't going to retire for another two years yet and they don't plan to sell until then. "Does that mean you don't plan to buy your future retirement home until you sell," I inquired? "That's correct, and we plan to pay cash for our retirement home with the proceeds", they replied.
So, while we were talking, I brought up the Zillow site. I asked them what their current address was and I entered it. There it was on the screen and their faces were surprised. That easy - their home was on my computer screen with a description of #bedrooms and baths, the square feet and an aerial view of their entire neighborhood.
They were shocked at the value Zillow assigned to their home; it was at least $200,000 below what they anticipated. Their idea, remember, was to sell their home at retirement, move to Delaware and buy a home, saving the balance for retirement income. Zillow does not claim that their Zestimate is accurate, but it's a starting point. An experienced real estate agent will be able to do a more thorough comparable analysis based on knowledge of the local market and homes in similar communities.
Then I showed them what homes are selling for in Lewes, Delaware, even today! Their shoulders slumped even more. When people learn about the low property taxes in Delaware they tend to think that homes must be low priced. Not true. Our property taxes do not adjust when homes are sold. They are not reassesed. Our county property taxes on a home that sells for about $400,000 are only around $1200 a year. If that same home is located in town limits of Lewes or Milton, the town taxes might add another $300 to $800 or so a year. For people living in New Jersey, that's a pittance. Delaware has the lowest property taxes in the entire Mid-Atlantic Region.
Home prices for a Coastal area, a resort where no house is more than an hour from the Delaware beaches are more reasonable than the New Jersey Shore, but depending on location houses are not cheap. If you live in an upscale suburb in Pennsylvania, your taxes will be lower here and the quality of homes will be what you are used to. The cost of living when you get here, however, will be much more reasonable.
Prices today are better than they have been since the early 2000s, but inventory is shrinking. Trying to look ahead two years and predict home prices and interest rates is difficult. Only one thing is certain -
PRICES TODAY ARE THE BEST THEY WILL EVER BE IN A BABY BOOMERS LIFETIME.
So, I sent the prospective buyers on their way with a list of current properties for sale, my Buyers Packet, Delaware tax information and more. They have a lot to think about but the good news is - they are in the driver's seat. They have approximately 80% equity in their current home, AND, it will sell for more than they will spend on a retirement home here in Coastal Delaware. Will they see the opportunity and use their strong position to buy in this Buyer's Market, wait to sell until their market strengthens and be among the winners? Or, will they wait and miss out on the opportunity of their lifetime? Only time will tell.
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