It's that time of year, when Facebook is filled with photos of kids of all ages heading back to school...and off to campus life.
For parents with college students, this can mean a really big life adjustment, and often a big move (or a downsize) as empty nesters! For West + Main clients and other Colorado homeowners, this often offers the opportunity to sell their large house in the suburbs and buy a smaller place closer to the city, or closer to the mountains. It might also mean buying a home with the anticipation of visiting grandchildren, or a place where adult children can retreat when needed, or the ability to invest in a vacation home or to free up resources to travel more often with less house to maintain.
If you are thinking about making a move, please contact us - we would love to help you find your next perfect Colorado home. Or, if you are thinking about moving out of the Denver area or to a different state, we can help with that, too!
According to Time Magazine, there’s a mismatch in the housing market. Demand is rising, yet homebuilders don’t have the capacity to create the supply the way they did in the boom years. They haven’t banked as much land, they haven’t filed the permits and they’ve become increasingly short of labor—one possible byproduct of the Trump administration’s crackdown on illegal immigrants. In fact, the nation is probably short about 700,000 homes on an annual basis. That explains why new home sales have been somewhat disappointing.
It also explains why sellers in many markets are now in prime position. According to Realtor.com, in December and January the supply of existing homes was 3.6 months, something that hadn’t happened since January 2005. In Seattle, for instance, the average time a house stays on the market is 36 days, compared with the national average of 90 days. In Dallas-Ft. Worth, it’s 42 days, according to Realtor.com. Combine that with the prospect of higher-priced mortgages thanks to the Federal Reserve’s decision to begin lifting interest rates and it makes buyers a little more motivated. “We’ve seen home sales surge because buyers are beginning to realize there is this expectation that mortgage rates will rebound: you might as well get in now,” says Bernard Baumohl, chief global economist at The Economic Outlook Group. He says prices are rising at twice the rate of inflation and more than two times the rate of average hourly pay. That’s bad news on the affordability front for first-time buyers who are trying to get onto the first rung of the housing ladder.
But it’s great news for empty nesters and other homeowners looking to downsize. Even better, there’s less of a supply constraint because developers have targeted the boomer market by building high service, luxury condominiums in major markets. And why not, says Peter Wells, a partner at Real Capital Solutions, which is developing a luxury condo tower in suburban Dallas: “When [boomers] sell their big place, they’re cash rich and it becomes all lifestyle driven.” Spring is a traditional time for buying and selling homes, and this season stands to be a busy one.
The first three things we tell empty-nesters to do to get their home ready for market is to de-clutter, de-clutter, de-clutter. It’s amazing how many things one can accumulate over a lifetime. As we age, we also tend to hold onto things as they connect us with our past. We know first-hand. We lost our dad almost 20 years ago, and to this day, our mom still refuses to throw out any of his belongings. Unfortunately, things that we think are important to our children may not be, and things that we think are disposable may have tremendous intrinsic value to our loved ones.
Here’s how you can fight the urge not to purge:
• Hire a professional. If you have found excuses for the last 25 years not to purge, it’s unlikely that you can do this alone. Many of our clients work with professional organizers and/or estate sales companies to help them get through this process. A professional organizer can help you sort through decades of paperwork and belongings in an organized and systematic way. A professional estate sales company can help you sort through which items have value and which do not, and then sell them for you.
• De-clutter on the front end. If you get something new, throw something old out. One in, one out. If you have too much stuff, change the ratio. For example, if you buy a new shirt, get rid of two or three old ones.
The good news is that de-cluttering is a cathartic process. While the journey of de-cluttering can be emotionally difficult, our clients routinely feel free and less burdened when they are done. In fact, the vast majority of our clients tell us that they wish they had done it years earlier.
Move when you can, not when you have to.
Don’t stay too long. It’s easy to do. You’ve raised your family in a home, and have a lifetime of memories there. It’s a growing trend for empty-nesters to modify their homes — by installing elevators and creating wide spaces to accommodate wheelchairs, for instance — to meet their needs as elderly people. Unfortunately, not every house can be adequately modified. And modifications can’t erase all the unneeded space in the family home.
We’ve seen it happen way too often — elderly homeowners start to lose the ability to maintain the house, whether for financial, physical or other age-related reasons. That’s when bad things start to happen.
We’ve had clients refuse to leave their multi-level homes, despite the advice from their doctors and often, their spouse and/or grown children. It usually takes a calamitous event — such as a tumble down a staircase, an illness or injury or financial ruin — to force the issue. By then, it’s far more difficult, painful and almost always financially sub-optimal. If your loved ones are raising these issues with you, take them seriously and be honest with yourself. After a certain point, being stubborn is not just about engaging in an existential conversation with your grown children, it can be downright dangerous.
Have the tough conversations while everyone is healthy.
No one likes to talk about estate planning. It brings up very tough conversations and intergenerational differences and conflicts. We get it.
However, it is infinitely easier to have these conversations when everyone is healthy and the conversations are more “hypothetical.” Once someone is diagnosed with a terrible illness or has their health deteriorate, the last thing anyone wants to do is to talk about estate planning.
Bottom line: Have meaningful conversations with your loved ones while everyone is healthy, and understand who really wants what. It’s much more fun to gift things while you’re alive and healthy, then after you’re gone.