A Downsizing Boomer May Be In For a Surprise
I have run into this a few times in the last year or so. With prices softened in city a bit - obviously depending on the neighborhoods you look at - there is an opportunity to downsize at an equal or somewhat lower cost depending again on another factor - what you are looking for.
This is a story that is being repeated all over the country. Boomers want to downsize. This is hardly a surprise. The surprise or even shock is that it is going to cost them money to live in less space. To some, it is so appalling that they have decided to stay in their current home.
Boomers own their home in the suburbs. Most are mortgage free. The home has four bedrooms, three baths, a family room, a rec room in the basement, two or three car garage and a huge yard full of trees and shrubs and maybe a pool. Okay, there may be variations of this but the essence is - the boomers own family friendly property. Now...... The kids have finished school and left the nest. The Boomers are rattling around a big house and find that they live in the kitchen - family room space and their bedroom. It seems that it is time to move to something smaller.
Here is the rub. The new home or condo may cost more than the proceeds from the sale of the big home in the suburbs. What?
- The market has reacted to the demand for large condos and retirement homes by placing a premium on the sales price. Remember, the Boomers are a tidal wave moving through demographic data. If you, a Boomer, are thinking of downsizing then so are millions of your fellow 1946-1964 birthday buddies. Simple supply and demand economics at work.
- Your lovely home is a wee bit tired. Forty plus years of the same kitchen, with the wrought iron railings, pink carpet, parquet flooring and paneled rec room is telling the story. Although you have house size you have a house waiting for updating and renovations. Your home is not competitive. It is not giving Buyers what they want in updates.
- You want to move but you are certainly not going to settle for apples to apples. Your tastes are now refined and you want granite and a bungalow backing on a golf course with grounds keepers or the whole top floor of a condo in the downtown area. You are selling a MacIntosh apple to buy an organically grown Star Fruit. Would you be happy buying the little bungalow down the block from your current home with the need for the same updates as your current home? Would you be happy with the location? No?
After finding out that their home is not the gold mine that they hoped for, many potential Boomer Sellers make the decision to stay in their current home. In some cases, the Boomer will update the family home, adjust the buying expectations and make the move at a later time.
Photo Credit: UK Baby Boom and Bust by David Willets
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