Every day in the U.S., roughly 10,000 people turn 65. Prior to the health crisis that swept the nation in 2020, most people had to wait until they retired to make a move to the beach, the golf course, or the senior living community they were looking to settle into for their later years in life. This year, however, changed that necessity.
Many of today’s workers who are nearing the end of their professional careers, but maybe are not quite ready to retire, have a new choice to make: should I move before I retire? If the sand and sun are calling their name and they have the opportunity to work remotely for the foreseeable future, now may be a great time to purchase that beach bungalow they have always dreamed of or the single-story home in the sprawling countryside that might be a little further out of town.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
“The pandemic was unexpected, working from home was unexpected, but nonetheless many companies realized that workers can be just as productive working from home…We may begin to see a boost in people buying retirement homes before their retirement.”
According to the 20th Annual Transamerica Retirement Survey, 3 out of 4 retirees (75%) own their homes, and only 23% have mortgage debt (including any equity loans or lines of credit). Since entering retirement, almost 4 in 10 retirees (38%) have moved into a new home. They’re making a profit by selling their current homes in today’s low inventory market and using their equity to purchase their future retirement homes. It’s a win-win.
Why These Homeowners Are Making Moves Now
The health crisis this year made us all more aware of the importance of our family and friends, and many of us have not seen our extended families since the pandemic started. It’s no surprise, therefore, to see in the same report that 32% of those surveyed cited the top reason they’re making a move is that they want to be closer to family and friends (See graph below):
The survey also revealed that 73% percent of retirees currently live in single-family homes. With the overall number of homes for sale today hitting a historic low, and with the buyer demand skyrocketing, there’s never been a more ideal time to sell a single-family home. Today’s market has the perfect combination of driving forces to make selling optimal, especially while buyers are looking to take advantage of low interest rates.
Whether they’re looking to fully retire or move into their retirement property early to continue the next few years working, now is the time to make the consideration. If your clients are part of the 73% of retirees with a single-family home and want to move closer to family, encourage them to capitalize on the seller’s market and make a move.