How many retirement homes will you buy or sell?
When we first began to focus our real estate business on Baby Boomers planning for retirement, we believed the adage that people would buy one retirement home. Some even call it their forever home and so does much of the marketing generated by builders and developers.
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But we have discovered many younger retirees actually buy and sell 2, 3, or more “retirement” homes. With the closing costs and moving expenses, this can really eat into retirement savings. So why do people end up selling their forever homes? Was this always the plan or was it the result of no plan?
For some answers, I began by reading through the latest NAR Home Buyer and Seller Generational Trends. In the latest survey, Baby Boomers were a large percentage of both home buyers and home sellers.
According to Jessica Lautz, Vice President, Demographics and Behavioral Insight, National Association of Realtors, as you age the type of home you buy, where you buy it, and what you plan to use it for changes as well.
“People are staying active longer and they’re living healthier lifestyles. But by age 70, nearly a quarter of home buyers are purchasing a home in senior-related housing,” Lautz says. “It could be an active adult community, where you live in a single-family home, or a condo or single-floor living, or in an assisted living facility of some kind.”
Lautz says that many Americans buy vacation homes with the idea that they are “forever homes,” or will be the place that they ultimately retire. And they may have been thinking about the forever home destination for years, if not decades.
Highlights that stood out include:
Baby Boomers, ages 54-72, represented
• 32% of home buyers
• 43% of home sellers
Reasons Baby Boomers purchase a new home
• 32% to be closer to family/friends/relatives
• 28% due to retirement
• 22% to buy a smaller home
• 14% job-related relocation or move
• 13% due to a change in family situation (marriage, birth of child/grandchild, divorce)
Factors causing a Baby Boomer Buyer to move
• 45% would move due to life changes (retirement, addition to family, etc.)
• 60% say they will not move; they are buying their forever home
• 35% would move if needed due to a household member’s health
• 25% would move to downsize to a smaller home
How do the statistics cited in this report correlate with our own experience in Delaware?
Since most of our buyer clients are relocating to Delaware from other states in the Mid-Atlantic Region and the Northeastern US, we find Delaware wins out with the combination of being close to family and retirement.
While national statistics show people do not move to another state, in fact, they stay within 30 miles of the home they sold, Delaware attracts people that probably would not have moved but have decided they must. We are surrounded by such high tax states and we are not much further away.
For example, someone from Northern New Jersey that might have had plans to retire to the Jersey Shore realized the Delaware Beaches are just another hour south. Add to this the much lower property taxes and the lack of a sales tax, and the appeal of Delaware is compelling.
Many younger retirees who moved farther south when they first retired, end up “moving back,” (but not all the way back to New Jersey, New York or Conneticut) because they were too far from family, especially grandchildren. A frequent 12-hour drive is not as easy as we get a little older if we want to be a part of our grandchildren’s lives. Delaware is a much better choice.
Top 5 reasons people in Delaware do sell their forever home
- Missed family; moved back home, even if this means moving back to higher property taxes
- Medical problem or death of spouse/partner
- Correcting an impulse purchase
- Move to a more desirable location but still in Delaware
- Downsizing – perhaps to a CCRC; perhaps still in Delaware
Regardless of why you have decided to sell, the team at Active Adults Realty is here to help ….
Related post: We published this article in 2018 on the importance of “thinking of selling when you buy”: Consider that Home Resale Value When Buying That Home for Retirement.