The prospect of retirement offers people some tantalizing choices in both housing and life style. Present day retirement, in fact, may present seniors with too many options: Some may aspire to live in communities where they can play tennis or go sailing. Others may prefer to live amid the stimulation of a downtown environment or a college town.
Yet others may choose to live in quiet neighborhoods with people of their own age in a retirement community. And still other retirees may relocate to live near children. The list goes on.
Above all, they want control of their environment and their destiny. This principle, and the fast growing number of retirees from the Baby Boomer generation, has resulted in the emergence of retirement housing as a major industry, and an almost bewildering range of housing and community choices.
A Reluctance to Discuss
Clearly, the choice of a retirement home calls for planning well before retirement, according to experts. Surprisingly, many couples avoid the conversation about where to live in their leisure years.
“So many people I meet haven’t talked about it,” says a financial advisor in Charlotte, NC. “There has been no conversation or planning… He thinks they are going to the mountains, she thinks they are going to the beach.”
“These are hard conversations that you think people will talk about,” he adds, “but, with busy lives, they just don’t.”
So how does one come to a decision about retirement living? According to Ellen Breslau, Editor-in-Chief of Grand- parents.com, soon-to-be-retirees should consider several questions, such as: “Do you cherish your privacy in a home or want the socialization opportunities of a 55-plus community?”
Pinpointing Your Priorities
Retirees need to identify their personal priorities, especially friends and family. “It may be of crucial importance [to me] to live near my grandchildren, [while] to you it may be nice but not necessary,” says Rodney Harrell, a director of the Public Policy institute of the American Association of Retired Persons (AARP).
People, especially those with existing medical conditions, may face a difficult choice: Do they settle in that remote mountain town far from health care facilities, or live in the city near major hospitals and doctor’s offices?
“You have to consider your own preferences in retirement living,” Harrell adds. “It isn’t a one-size-fits all home solution… The trick is to pick the best things on the list…”
And in fact, many choices are available to match up with your preferences, such as a seniors only community that is still within an easy drive from family, friends and doctors.
“There are many low-cost housing and retirement community alternatives for [seniors] who are flexible, wish to retire, and [who] put controlling your own time as your highest priority…while still maintain[ing] a comfortable lifestyle,” according to BabyBoomerLifeBoat.com, a retirement website.
When Downsizing is Rightsizing
While tastes in lifestyle may vary, most retirees have in common the need to control housing costs, so they can get by on a fixed income. That means the big family house needs to be exchanged for a home that’s more affordable, possibly smaller and easier to maintain.
“The most obvious solution for Baby Boomers to stretch their money is to downsize their living arrangements,” says BabyBoomerLifeBoat.com. “Big Homes that were purchased to raise a family eventually turn into empty nests.”
Downsizing by itself leads to an important decision, according to the retirement website: Either buy a smaller home or condominium, while investing the balance of your equity, “or relocate to an area where housing is less expensive, again investing the balance.”
Retirees Prefer to Own Their Homes
The question of what kind of house to be in is not an idle one for retirees: Census figures reveal that the overwhelming majority of retired couples own their own homes, rather than rent, according to financial columnist Jane Bryant Quinn. Ownership “runs to over 90% among married couples in which one person is 65 or older.” Ownership makes particular sense, she adds, if retirees can “pay cash for a house or condo and still have plenty of money to live on.”
Beyond personal preferences, renting may be disadvantageous to some retirees, according to Quinn. “You can’t modify the space to suit your style of living,” she points out. “The landlord might decide to sell, forcing you to move out. Pets may not be allowed. Emotionally, you might not feel as comfortable as you did in your own place.”
Where Owning Is Cheaper Than Renting
The decision to buy vs. to rent may be determined, in part, by the geography of your housing choice, according to Nicolas Retsinas, a real estate lecturer at Harvard University School of Business, in general, he says, buying is cheaper than renting in the middle of the country while renting is usually less expensive in coastal areas.
One popular option is to buy a single family home or condo in a retirement community. This is a choice for people who can live independently without much need for personal assistance, since limited personal services are available. The typical retirement community tends to include “a community clubhouse, recreational activities, and the convenience of low-to no-maintenance living,” according to After55.com, another site for seniors.
Many of these communities limit membership to people who are either at least 55 or 62 years in age. By excluding young people, life in a retirement community means freedom from loud parties and roaring motorcycles, while helping ensure peace of mind for older people who fear crime.
Again, these communities are for people who are active and in good health. Unless specified, most retirement communities of this type do not offer any medical or personal surveillance services. In addition, these communities may be governed by homeowners’ association, which charge monthly dues that must be factored into your housing expenses.
“Keep in mind that independent living facilities do not offer medical or personal assistance,” cautions After55.com. “However, you may hire in home help separately.”
INVENTORY AT 20-YEAR LOW
Anyone eager to buy a home this spring probably has reasons to feel good.
The job market is solid. Average pay is rising. And mortgage rates even after edging up of late, are still near historic lows. And then there’s the bad news. Just try to find a house. The national supply of homes for sale hasn’t been this thin in nearly 20 years. And over the past year, the steepest drop in supply has occurred among homes that are typically most affordable for first time buyers and markets where prices have risen sharply. In markets like San Diego, Boston and Seattle, competition for a dwindling, supply has escalated along with pressure to offer more money and accept less favorable terms. – Associates Press
Special Interest Communities
Then comes the interesting possibility of living in a specialized community. In recent years, retirement-aged people are living longer, enjoying better health arid vitality, and finding themselves able to participate in sports and other physically demanding activities.
The near universal popularity of golf has encouraged developers to incorporate nine- and 18-hole courses into many senior communities. Other seniors like tennis. If those fair-weather sports are your passion, a sunbelt community may make sense.
For other people, boating and sailing define the good life. “Being able to spend your golden years lounging on the beach is a dream shared by millions of Americans,” according to CBS News. “No longer exclusive to Florida, water-front communities can be found in Delaware, Virginia, the Carolinas, Washington, Oregon and even Michigan.” By itself, North Carolina claims at least 11 beach communities.
The geographic disparity of present-day beach communities can be inferred from the list of the top 10 beach communities according to CBS News: They include Port Townsend, WA; Oak Island, NC; the Georgetown area, SC; Boynton Beach, FL; Rehoboth Beach, DE; Bandon, OR; Traverse City, Ml; the Fort Myers area, FL; Virginia Beach, VA; and Eureka, CA.
Beach cities typically offer “small-town charm, unparalleled views and plenty of opportunities to enjoy nature,” according to CBS. At the same time, there are also potential extra expenses that come with living by the ocean: Homes that lie in the path of tropical storms may require special insurance coverage, so those costs must be added to your housing-cost estimate.
For retirees with a strong taste for cultural activities, the choice may be a home in a downtown area or college town within walking distance of shopping, cultural activities and major sports venues.
IS THIS THE FASTEST SALES MARKET EVER?
Record high prices in some local markets are not thwarting hungry buyers, as they rush to take advantage of the lowest mortgage rates of the year. Home sales jumped nearly 9% in March compared with March 2016, even as the number of homes for sales plunged 13% that demand dynamic further increased competition in the market, resulting in the fastest average sales pace since 2010. The typical home went under contract in just 49 days down from 60 days a year ago. Steep competition also pushed the median price of a home solid in March to $273,000, upto 7.5% year over year. -Diana Olick, CNBC
People, especially people who find themselves single in their retirement years, may also choose to buy a home with their friends. “In these arrangements, a person who has a home may invite a friend or family member, or even a tenant, to move in and help with expenses and chores,” according to a report from AARP.
“The set-up might involve people of the same age or generation and the arrangement is one of peers residing together for companionship and cost efficiency. Sometimes two or more friends actually purchase …a residence together and become housemates.”
In other cases, an older housemate may share a home with a younger person (even if that comparative youngster may be 60 or older). In this arrangement, the younger housemate can do housekeeping or drive the older person to appointments, in exchange for a reduced rent. In this mutually beneficial relationship, “the two can make for well-matched housemates,” says the AARP report.
Co-housing: Life in a Community Setting
Less common but increasing popular is the decision to buy a unit in a “co- housing” community, which is a type of collaborative housing in which residents “actively participate in the operation of their own neighborhoods,” according to Baby- BoomerLifeBoat.com. Co-housing offers a mixture of homes and common areas, such as meal halls, activity rooms and libraries.
The standard co-housing community pro vides kitchens in every unit, while also requiring residents to help cook one communal meal a week and help with dishes on another. That arrangement may not appeal to loners and hermits, but many people may find the community mess hall a convenient alternative to cooking dinner every night.
Another potential benefit of co-housing, at least for those who do not want to live in communities entirely made up of older people, is that many co-housing communities are a mix of different ages.
OPTIMISM REMAINS HIGH
Thanks to the momentum driving the housing market–good employment, rising-salaries, high-earning millennial with an interest in homeownership who are unhappy with high rents— our research found there is good optimism about the housing market in – 2017, with 2743% of respondents saying they are extremely optimistic and a further 5.13% describing themselves as somewhat” positive, while 11.95% are ambivalent. -Inman News
Again, planning is key before making any decision to buy retirement housing. Marketplace.com, an investment website, advises retirees against the following mistakes:
1| Not Having a Plan.
2| Forgetting your friends and social network.
3| Electing the wrong financial alternative. “Some people need a big mortgage in retirement, some people need no mortgage in retirement and some need a small, manageable mortgage in retirement,” says a North Virginia financial advisor.
4| Assuming you will be able to drive forever. New York-based elder-care lawyer Ann-Margaret Cardoza says she encourages her clients to “to look for homes within walking distance to stores, public transportation, cultural attractions and movies… therefore I am a big fan of retiring in a city whenever possible.”
5| Don’t underestimate your home-related expenses.
6| Buying based on your current income. Retirees must budget their housing costs based on their retirement income, not their working salaries.
As in all home-buying decisions, only you can make the decisions for yourself. Buying a retirement home involves your aspirations, tastes and figuring out how to get the best housing value for your income. The only requirement is to live long and live well.
Call or email if you need more info about planning or executing your next move.