About 10,000 Americans retire every day. Many own their (too large for their needs) home and were planning to downsize or move, but feel they should wait now that real estate markets have dipped off highs that surged between 2020 and 2022 in many areas. Why should they sell now? Here are some reasons why selling now might make sense:
1. Liquidating 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 which 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 down 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 sooner than later when - not if - the economy bounces back with lowered interest rates.
For more information on Karla Murtaugh Homes or to read our latest real estate market reports, please visit https://karlamurtaugh.com/.