Fun Fact: Approximately, 10,000 Americans retire every day!
Homeowners saw exponential equity gains between 2021 and 2022 and as a result, lots of retiring Babyboomers, were planning to downsize, or move post retirement. However, given the recent dip in the real estate market, those same homeowners are finding themselves on the fence as to whether they should sell now or wait.
While I am not a financial advisors, as a seasoned real estate professional, I can offer my clients sound advice and ideas to contemplate; which you may not have fully considered. Here are are some reasons why selling now might make sense still:
1. Selling a home now when all markets are "down" - including equity markets - allows you to buy replacement investments at lower prices with a stronger potential upside....including equities.
2. Liquidating a home now allows you to earn more for your cash deposits that now produce much higher returns. Even a basic savings account delivers over 3%.....
3. Holding on to a large expensive home has carrying costs: insurance, maintenance, repairs, electricity, gas, mortgage payments, real estate tax payments. If markets recover in the next 2 years to where they were, will those gains outstrip the costs to carry this home?
4. The lower the sale price, the lower your capital gains taxes too.
Many who have owned their homes for many years may have large capital gains taxes beyond the $250k or $500k exemptions.
5. In a declined housing market with higher interest rates, job losses and a recession looming, first time home buyers are often more disadvantaged: the smaller homes that also appeal to retirees may be more affordable and attainable now than later when - not if - the economy bounces back with lowered interest rates.
6. Regardless of maximizing profits, let us not forget that TIME IS THE LAST LUXURY! And that my friend, you cannot buy more of.
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