The Baby Boomer Dilemma: Should You Sell And Rent
Posted by Richard on September 7, 2023
A lot of baby boomers — people born between 1946 and 1964 — have made up their minds. About 85 percent tell researchers they are holding on to their homes. And, yet, with housing prices high, most could walk away from the responsibilities of maintaining a home with a nice chunk of capital. The average US house price is about $360,000, according to Market Watch.
Meanwhile, rising interest rates could drive down real estate prices. Seniors who don’t sell may miss out on gains.
Conventional advice for seniors is to keep costs as fixed as possible during retirement, since income is also fixed. When you rent, rents are likely to increase every year. On the other hand, the cost of maintaining a property also increases every year. When you can’t shovel the snow yourself, or you have to keep the lawn mower running, you have to pay for it to be done. Then, there are the hundreds of other problems from appliances, to heating systems, to the plumbing — and property taxes. It can get expensive, but when you rent, those are the landlord’s problems, not yours.
Another consideration is location and flexibility. If you rent, you can always move near the grandkids or to a more hospitable climate.
Downsizing is also an option. From July 2021 to June 2022, baby boomers accounted for 53 percent of sellers and 39 percent of buyers, suggesting that re-relocation and smaller homes are on the menu for seniors