Have you heard how seniors are currently changing the real estate market? Let me explain.
The real estate market has, for lack of a better word, been pretty darned crazy for a while now. COVID 19 was part of the problem due to a number of reasons. But there are other problems as well.
A Seller’s Market That’s Gone Crazy:
Everyone dealing with real estate is wondering when prices are going to level off. When people can stop the bidding wars of paying thousands of dollars more just to get the home.
They’re also wondering when the inventory of houses will increase so there will be more houses on the market to buy.
But much of the problem is the current decisions of seniors.
More Boomers Are Choosing To Age In Place:
Boomers have more real estate wealth than any other generation. As was customary in the past, seniors sold their homes to move in with families. Or assisted living facilities or nursing homes.
That has changed. Less seniors are selling their homes, meaning there are less on the market to buy.
Which is making it even worse than it was for first-time homeowners to buy a home.
Seniors Are Breaking Tradition:
According to Business Insider, Boomers are now breaking that tradition. This is a sign that boomers are choosing to “age in place.” Due to COVID, seniors are more cautious due to fear of infection.
Some simply did not want people in their home, as was to be expected. So they put off listing their homes. They were also wary that they wouldn’t be able to afford a reasonable replacement home.
So what are they doing? Many are remodeling their current homes.
Choosing To Remodel & Stay In Their Home:
With homes going up in value nationwide, they’ve become more willing to spend their money remodeling than past generations. This naturally turned into a home improvement boom.
So all those homes seniors may have been willing to sell in the past aren’t going on the market, fueling the housing crisis.
Then there was an increase in the price and supply of lumber. Which caused even more problems.
Therefore, among other reasons, boomers are not retiring in line with seniors in the past. They’re staying put and this is causing the supply of homes to worsen.
Another Condo Kendra & I Just Looked At:
This morning Kendra and I looked at another condo in the same complex as last time. It’s really the only complex I’m interested in, as they are all on one level. You get a fenced backyard with these condos built in the 1940s.
No yard seems to be the same size. The one I’m now bidding on is quite small.
Plus it’s in a prized area of town, where prices for the houses around it are 3-4 times the prices of the condos. The condos are currently around the $110,000 to $125,000 price range.
The houses across the street, where they tore old houses down to acquire the land to build new ones are close to half a million dollars.
At the other end, there are luxury apartments with a parking garage. Farther down toward the main street, there is my grocery store. Trader Joe’s is about two blocks away. Along with many restaurants.
Kendra says she thinks it’s worth it to get a condo and pay the HOA fees because I’m assured that the outside structure and the roof are taken care of. Actually they are putting new roofs on all 160 condos as I write this.
The agent for the condo cordoned off time for us to see it before she opens it to the public, as a favor to my daughter.
Kendra already called the other realtor. She’s writing up the contract this afternoon after she deals with contractors for her new flip.
So we’ll see what happens with this one. I bid higher than the asking price.
If they take my offer and the appraiser doesn’t appraise that high, which they’re doing more and more lately, I’ll have to pay the cash over his appraisal.
I’ll let you know what happens.