April 21, 2021. In most parts of the country a staple of conversation these days is the crazy increase in home prices. A big reason for that, according to Realtor.com, is a shortage of places to buy. The supply of homes for sale in the U.S. during March was down 52% from a year earlier. Another factor is continued interest low rates. The March national median listing price of a home was $370,000, up a whopping 15.6% compared to last year. The typical home spent 54 days on the market this March, which is six days less than last year. Anecdotally, almost everyone we know in Florida who has sold their home this winter sold it in just a few days, often the same day it went on the market!
While these rapid price increases tend to shut out first time buyers, they have left typical Topretirements Members, who have probably owned their home for a long time, feeling pretty comfortable. But what does this crazy real estate market mean to you as a retiree? Should you sell, stay, or trade up? That is what we are really after in this article: how are you feeling about the real estate market, and are your plans changing as a result of the current boom?
So far our personal experience seems to have two camps – those who are selling out, and a larger group that would like to take advantage of how much they could get for their home, but worry that they will not be able to find anywhere suitable to live. The phenomenon applies to snowbirds as well as people who live in one area year round.
Some friends we know have decided to cash out and move to a less expensive market for their winters (Key West to St. Petersburg). That seems like a good strategy, particularly if they like where they are moving to. Some are renting first in the new market (always a good plan), with thoughts about eventually buying. Another snowbirding friend, after taking a nice profit on the winter home he has owned for a long time, plans to travel for the winter months, maybe eventually settling on a place. Yet another couple, who decided they really only wanted to be in Florida for a few months a year, sold their winter home in Sarasota and will rent there for a few months next year.
Many others would like to trade up their winter homes, but that can be complicated. In this market you can’t put your house on the market without having a lock on your new home – otherwise you could end up on the street. Making it more difficult, many people don’t have the resources to own two homes, even if it is very briefly. Are you thinking about trading up – if so, let us know.
Two other phenomena in the market
One thing that has affected a lot of baby boomers is having their adult children (and their children) move into their homes during Covid. How will that shake out for combined families – will they try to upgrade to a larger home, or will the children move out of the nest as life starts to return to normal? If you are in that situation, please tell us your plans.
Another thing we have lately is the desperation buyer. Many Florida renters, looking at huge price increases and limited availability for next year’s rentals, are rushing to buy. Countless properties are being purchased via online video tours, the buyer never actually seeing the property. WIth buyers lined up to buy, prices keep climbing and are usually over the asking price.
Finally, we would love to hear about people’s experience in buying into the active adult community and 55+ markets. Are you seeing price increases, and are folks beating down the door to buy? Or is a more normal market? Please share your thoughts in the Comments section below.