Just as preparing for retirement requires thoughtful planning, so does deciding when to sell your home before you make the big move to a senior living community. The decision on when to put your house on the market is frequently influenced by three topics: real estate trends, personal goals, and fluctuating health needs.
How the Housing Market Can Impact Your Retirement
To get us all on the same page, let’s recap how COVID-19 shook up the real estate industry nationwide and locally throughout 2020 and 2021.
In March 2020 the pause button was pressed on the world as international stay-at-home orders went into effect. Over 20 million jobs in the US were lost. Homeowners who considered selling at the start of the year became nervous. Fear of job loss and a “let’s wait and see when things get back to normal” mentality affected available inventory. Realtor.com reports that existing home listings dropped by 53% over 2020. Yet, with new flexibility to work from home and the desire for more space, demand for housing grew. Mix in historically low mortgage rates, stimulus checks, and increased home values—inventory could not keep up. It became a hefty sellers’ market.
Fast forward to August 2021 and the Portland Metro area has boomed with 58% of homes selling for above asking price and most sliding into contract after a mere four to seven days on the market. This has put buyers in a conundrum: to keep making huge offers on houses or wait until the market cools? According to the John Burns Real Estate Consulting US Housing Analysis and Forecast report published in March 2021, they expect homes to drop from a 12% increase in value in 2021 to only 4% in 2024, with a forecast of over 38% of all listed homes being overpriced. In other words, prices can’t go up forever. Appreciation rates will dip. The trick for you is getting your home sold before that slump. It’s not just you though, it’s also the other millions of older adults looking to sell.
The 2020 census shows that at least 52 million Americans are 65 or older. Over the next nine years another 21 million will turn 65. Real estate experts report that 78% of senior citizens are homeowners. Eventually, this population could flood the housing market, just as home values are no longer appreciating. This may also greatly influence the maximum benefits of your home equity, along with the amount of money available for retirement.
Seniors across the country are wondering if these housing predictions mean they should sell now or wait. Future residents of Springbrook Meadows North, Marj and Jeffery Kaiser, share in an email, “We sold because the market was very favorable for sellers, and we thought it was in our best interest.” After only a few days on the market their home sold in May 2021. Because they don’t move into their duplex cottage at Friendsview until 2022 they purchased a Class A motor home to live in full time and have already logged around 5,000 miles! Marj says, “Now, we are very much looking forward to the joys of not owning a home and having more freedom to travel.”
For the Kaisers, a “sellers” market worked in their favor. However, knowing when to sell isn’t just dependent upon the real estate market. It also depends on each individual’s dreams or goals.
What Are Your Dreams?
Directly across the street from our main campus lies George Fox University (GFU) where students dream of serving God through ministry or various professional careers. The board chair, Steve Tatone, says that our community has a lot in common with the GFU students. “Friendsview residents are goal setters too,” he states. “People who dream dreams.” Aging doesn’t eliminate goals, sometimes it allows for their fulfillment.
For example, Eric and Virginia Holmstrom (residents who will move into one of our new expansion neighborhoods by late 2022) dreamt of seeing the world. This meant selling their home well in advance of moving into a senior living community. “We sold long before our tentative move-in date of 2022 with the intent of extended times of overseas travel,” Eric says. “Since the sale in 2018 we have lived for three months in an apartment in Cuenca, Ecuador and just over three months on the cruise ship, Columbus.” Midway through their cruise, the pandemic fulfilled another dream: being near their three grandchildren ages five months to five years. They share that it, “Enabled us to help our daughter and son-in-law weather the storm of both parents working from home and the grandchildren at home in our pandemic-inspired bubble.”
In planning for their “freedom-years,” they knew what their goals were. As you plan for life over 65 have you thought about your own hopes and dreams? Marj Kaiser says, “From talking with other people that live full time in their RV’s, it seems like those that have a plan are the happiest. So, my advice is to make a plan, no matter what you will be doing between the time you move out of your house and into your Friendsview home.”
What you want can help determine when you sell your home. If your desire involves living closer to family, it might make sense to sell your home now and rent a place near them before you move into senior living. If you’ve always dreamt of living in another country, then selling or even renting out your house and spending three months somewhere exotic like Eric and Virginia may be the way to go. Or perhaps you want one more year living in the house that you designed from scratch before you right-size to a Life Plan Community. What matters is that you figure out your top priorities before you decide when to sell.
As you think about your goals, take into consideration your physical well-being too. Nationwide senior living statistics tell us that 68% of individuals over 65 will require some form of assistance at some point in the aging journey. Changing health care needs can quickly sway how soon you will need to sell your home.
No More Lawn Care, Stairs, or Wondering What to Do When the Fridge Goes Out
Just as dreaming dreams doesn’t stop with age, neither does, well, aging! Despite a worldwide pause on “normal” life due to the pandemic, aging continues without hesitation. For some with developing health concerns it may even feel like aging is on fast forward instead of pause. But what does your health have to do with selling your home?
Here are two quick examples of how health can affect homeownership. After a gust of wind wiped away three hours of arduous raking, resident Lon F. says he went inside and told his wife, “It’s time to move to Friendsview!” Lon says it was a relief to no longer worry about appliances breaking down or daily lawn care after moving into the Springbrook Meadows neighborhood. One local Newberg senior, and family member of a Friendsview resident, admits, “I don’t even go on the second floor of my house anymore. Too many stairs.”
As health care needs and energy levels fluctuate it can become less desirable to deal with homeownership issues. For some it eventually becomes impossible or falls to adult children. Founders Sue and Gary explain that they were responsible for their parents for many years. “Physically they required a lot of care and I just didn’t want to do that to my kids,” Sue shares via a Zoom interview. The Medford, Oregon housing market was “hot” so they sold their home in order to spend more time in Hawaii and visiting their grown children. “I don’t want to be a financial burden and I don’t want to be a physical burden on them either,” she confides.
Whether you choose to sell, rent it out or live in your home for several more years, it’s important to make the decision while it is still yours to make. If you experience a health incident, the last thing you want to think about is the housing market or forcing family members to decide for you.
Blindfolds and Dartboards
Predicting real estate trends can feel somewhat like throwing darts at a dartboard blindfolded, after being spun around three times. The best approach is to consider your goals and physical well-being and then make a plan. Discuss it with family, your financial consultant, realtor, and other important people in your circle. If you want to discuss it more with one of our Residency Planning Counselors, contact us today!
Nikki Deckon has been on staff at Friendsview since 2018 in various roles and in long term care for several years. Before working with seniors, she wrote/produced hundreds of talk radio programs and vignettes; was published in a couple of editions of Chicken Soup for the Soul and other print publications including The Oregonian, Kids NW, The Sun and more. After twenty years of marriage, she feels that she’s still in the “honeymoon” phase and is enjoying raising her teenage boys in Newberg, a mere two miles from Friendsview.