Baby Boomers finding it difficult to downsize

Fifteen years ago or so the trend in warm climates such as Texas, Arizone, North Carolina, Florida etc. was for new retirees (mostly Baby Boomers) to advertise their success in life by building huge 5 or 6-bedroom homes. This, of course, was a time of easy credit and real estate was booming.

These days, of course, everything is different. Keeping up with maintenance is very costly and the owners are that much older. Even more challenging is the fact that these large homes are proving to be very difficult to sell. Younger buyers aren’t interested in these mansions, opting instead for more modest homes. A recent survey revealed that more than half of would-be buyers are looking for homes priced $200,000 or less.

In Scottsdale, Arizona there are currently 349 homes valued at more than $3 million on the market with many being listed at discounts of up to 50 percent.

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Retirees Don’t Want to Move

The Home Equity and Retirement Income Planning Survey conducted by The American College of Financial Services reveals that 83 percent of those nearing or in retirement don’t want to relocate. Interestingly, the desire to remain in the current home increases as the individual nears retirement age: there is a fair amount of uncertainty between the ages of 55 and 62 but as retirement actually nears past the age of 62 the willingness to move decreases.

44 percent are willing to use home equity in retirement but only 25 percent are comfortable using equity as a source of income.

Reverse mortgages remain a mystery as only 30 percent have a basic knowledge of it’s details and only 14 percent have even considered a reverse loan.

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