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Reasons Baby Boomers should consider Downsizing

February 17, 2015

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Reasons Baby Boomers should consider Downsizing

By Don Preisser
Realtor – Colorado Luxury Homes

According to AARP, for the next 18 years, Americans will be turning 65 at the rate of about 8,000 people a day. That’s a lot of homeowners according to Trulia.com who will be reaching retirement age and will be thinking about their next phase in life. Downsizing is a popular trend for retirees who favor spending their “empty nest” years enjoying life on the go.

(1). For Baby Boomers looking to downsize, Colorado’s Front Range Market, which saw a significant change in the Spring of 2012, is incredibly hot right now. First it was mainly in Denver Colorado real estate but now it’s all along the corridor from Ft. Collins to Colorado Springs. Home prices in many areas are now close to where they were prior to the melt down that started in the latter part of 2007. We have seen an increase in home values from anywhere to 5% to 12% for each of the last three years and real estate experts expect values only to increase in the next few years.

(2). Homes on the market today that are priced right and are in a good locations are averaging 32 days on the market with a home that has between 1,750 – 2310 square feet and 43 days with 2,310 – 3,000 square feet which is a significant improvement from 90 days and 150 days respectively three years ago.

(3). Interest rates are below levels that we haven’t seen since the 1960’s and this is good news for buyers and sellers alike as the Federal Reserve is possibly thinking about raising the interest rate later in the year provided the economy continues to improve.  This could slow down the housing market like it did briefly back in the summer of 2013 when the interest rates climbed to around 5% but then fell back to the lower 4’s within a month after it hit its peak. Homes started selling again and it hasn’t slowed down except for the fact of the very low inventory of homes on the market right now.  The rule of thumb is that for every 1% increase in interest rates you lose about 10% in buying power. So, if you’re thinking about buying a $400K home and procrastinate and the interest rate goes up 1% then you now can only qualify for a loan around $360K provided that you are financing the purchase with a mortgage. If paying cash then it doesn’t matter.

(4). This may be the perfect time to downsize to a smaller home and reduce your mortgage payments or if your house is already paid off then you can pay cash for a new home. You may also think about putting down 25% to 50% as a down payment and take advantage of the low interest rates rather than paying all cash and put your money to work for you and investment in your retirement.

(5). Your dream about moving closer to your children and grandchildren are now more of a possibility or moving to a warmer climate to avoid the cold and snow. It is possible that after selling your home that you may be able to buy a second home in the mountains or in the southern or western states where the housing market hasn’t completely recovered and there still may be some good deals to be found.

(6). You may also want a lifestyle upgrade where you will have more time for yourselves. So, in the process of downsizing, you have the opportunity to relocate closer to all the new lifestyle amenities you will want to enjoy with all that newfound spare time. Retirees who love to take advantage of golf, tennis, biking and outdoor activities in suburbs or restaurants, shopping and cultural events in the city find that downsizing affords them the luxury to do so with maintenance free living in luxury patio homes, townhomes, or condominiums.

Additional advantages are:

  • No more yard work or maintenance.
  • Lower property taxes and insurance.
  • Smaller utility bills.
  • Less furniture to buy.
  • Reduced transportation costs.
  • Reduced overall cost of living.
  • Less Stuff = More Life

If you are interested in selling or buying then please contact me at (303) 875-9292 or email don@coloradosluxuryhomes.com. I work as a listing agent or buyer’s agent in all price ranges throughout the Greater Denver Metro area. Please feel free to visit my personal real estate website www.coloradosluxuryhomes.com and look for free or contact me and I can set up a personal property search for daily alerts of properties coming on the market or price reductions.

Realtor with Your Castle Real Estate.

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