It wasn’t that long ago when the outlook for retirees focused on baby boomers downsizing and moving into smaller homes in the country — trading an urban lifestyle with a relaxing, rural retirement.
Fast forward 20 years, and many retirees are opting to stay in their homes for longer: renovating, upgrading and improving accessibility along the way.
A comfortable home is a comfortable lifestyle that many are not willing, or wanting, to give up.
The definition of “old” has changed.
Joseph Segal, the founder of Kingswood Capital, has just put his tony 22,000-square -foot home in Vancouver’s west side up for sale, for $63 million.
Why? Because they are downsizing to a smaller home in Vancouver.
“I’m an old man,” said the 92-year-old Segal, and “it’s a big place.”
Many of us are living longer and have healthier lifespans with various sources of retirement income, and ultimately we will ask the question: should we buy a condo, downsize to a smaller home or cash in and rent?
All options have pros and cons.
Is a condo right for you?
Buying a condo may mean downsizing our footprint, but in many cases it doesn’t mean downsizing the cost.
Retirement communities are being pitched to seniors across the country with promises of amenities such as entertainment, hospitals to retail.
Many choose to be closer to families along with the desire to live in accommodations that are maintenance free. It can be enticing.
On the other hand, the concern over new costs such as condo fees or retirement residence fees can be worrisome.
Is it time to downsize?
In a hot real estate market, the temptation to cash in and lock in your appreciation can be overwhelming.
But before you do, Ted Rechtschaffen, president and CEO of TriDelta Financial, said in a BNN interview to ask yourself: is the house I’m in now too large or too difficult for me to manage?
And consider where your wealth is concentrated. Do you have too much of your wealth tied up in real estate? You have to live somewhere. So do you buy or rent? Unless you plan on living in a home for at least 6 years, you might be better off renting.
Bottom line
I’ve never been a fan of trying to time the market. You have to get it right at least twice. Going in and getting out.
Consider your lifestyle, potential longevity and retirement funding options. Even if you don’t pick the peak of the market you are still holding on to the lottery ticket that doesn’t have an expiration date.
You get to cash in when you need to, or want to.
Indiana law has few protections for people who purchase a house with land contract, a shortcoming that consumer and housing advocates say places vulnerable buyers at risk.
Still, the approach is attractive and increasingly common among individuals and families unable to obtain tradition financing, according to Amy Nelson, executive director of the Fair Housing Center of Central Indiana. That’s because buyers often can get into a contract with little or no money down, followed by affordable monthly payments over a set number of years.
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The gamble is whether the buyer, often financially distressed to begin with, will have the money or be able to obtain a loan when the balloon pay-off comes due. If they can’t — and default — the property reverts to the seller. The buyer walks away with nothing. There is no equity for the money they have paid the seller or improvements that were made.
Land contracts have been used for decades by individuals selling their homes or land. But recently, Nelson said, they are being used more often by businesses that sell homes in large-scale variations on rent-to-own deals. For instance, an IndyStar investigation found one such seller, Chart Properties LLC, has issued more than 100 contracts to buy and sell homes in a process that is not covered by Indiana’s real estate licensing law.
Nelson said there should be a cap on how many homes a person or business can sell via contracts without a real estate license, which is required in Indiana to sell property a seller does not own
“I would hope that maybe … once you are doing so many transactions a year that you would switch from being that mom-and-pop selling your own home, moving and trying to do it yourself, versus somebody who is in the business of so-called selling those homes,” she said.
Chart President Robert “Bob” Keck explained to IndyStar that he does not need a real estate license because Chart claims ownership of homes it is buying on contract. He said Chart’s attorneys have thoroughly researched their legal standing and the company also has a supporting opinion issued in by the Indiana Attorney General.
With a growing number of people purchasing homes via contracts — without the protections that come with transactions regulated by real estate licensure laws and mortgages — Nelson said the message is “buyer beware.”
“The central problem with these land installment contract is that they exist in this no-man’s land in between where the potential home buyer has none of the protections of home ownership and none of the protections of being a tenant in a traditional lease,” said Sarah Bolling Mancini, of counsel to the National Consumer Law Center and co-author of a 2016 report that called contract sales “toxic” and “predatory.”
The NCLC report included several recommendations for both prospective buyers and lawmakers. Here are three Mancini and Nelson say are critical:
Tim Evans is IndyStar’s consumer advocate. Contact him at tim.evans@indystar.com or (317) 444-6204. And follow him on Twitter: @starwatchtim.
Having a home away from home is a dream for many Americans—and for a lot of us that dream includes a quick walk to the beach and all the amenities you can only find on a boardwalk.
While many beloved beach towns like Key West, Florida and Santa Monica, California are out of reach for the typical homebuyer, with median prices in the millions, affordable beach towns do exist. In Florida alone there are seven coastal cities where the median home price is less than $280,000.
To help you achieve your beach house dreams, we’ve rounded up the 15 most affordable beach towns in the U.S. and chatted with Redfin real estate agents about what makes each unique. At these prices, you’ll have your toes in the sand in no time!
1. Atlantic City, NJ
Median Sale Price: $52,250
WalkScore: 72
Portion of Homes Waterfront: 27.6%
“Atlantic City and its surrounding beach towns have so much to offer someone looking for a vacation home,” said Redfin real estate agent Kimberly Mogan. “Not only does Atlantic City boast some of the finest beaches on the east coast, including an iconic boardwalk, the town offers glitzy nightlife, beautiful casinos, restaurants and an impressive lineup of year-round events. It’s a perfect home away from home for someone who thrives in an action-packed city.”
2. Miami, FL
Median Sale Price: $275,000
WalkScore: 78
Portion of Homes Waterfront: 11.7%
“Many of my clients end up buying a second home in Miami,” said Redfin real estate agent Jose Medina. “The year-round warm weather is what gets them to visit Miami the first time, but once here they quickly fall in love with what Miami is best know for: The beaches, the culture, the lifestyle.
Miami is an emerging city with something for everyone. On the streets of Brickell (Miami’s financial district) you’ll experience a New York-type hustle and bustle. If it’s music you love, downtown Miami offers the yearly Ultra Music Festival in Bayfront Park. Golfers can lay back and play 18 holes of Golf in a PGA golf course. And, of course, there are the incredible beaches.”
3. Clearwater, FL
Median Sale Price: $174,250
WalkScore: 43
Portion of Homes Waterfront: 19%
Clearwater, a city in Florida’s Tampa Bay area, is a year-round destination with entertainment for visitors and residents on any budget.
“Two things Clearwater offers in abundance are beautiful beaches and small-town charm,” said Redfin real estate agent Starlet Jordan. “Caladesi Island, which is less than 10 minutes north of Clearwater, has been recognized as one of the nation’s best beaches. There is also a beautiful beach resort called San Pearl and several new luxury hotels with amazing waterfront restaurants. Check out Clearwater Marine Aquarium where you’ll find Winter the Dolphin, star of the movie Dolphin Tale!”
4. West Palm Beach, FL
Median Sale Price: $170,000
WalkScore: 41
Portion of Homes Waterfront: 28%
“West Palm Beach offers a Key West-style of living, but in the financial district of downtown. You can find everything from high-rise condos to single-family homes in all price points,” said Redfin real estate agent Delray Valle.
“West Palm is know for Clematis Street, which is the historical heart of downtown and features night clubs, live music, boutiques, historical landmarks and incredible restaurants. Outside of having beautiful white sandy beaches, there is entertainment galore in West Palm Beach. There’s the Kravis Center, which is where Broadway shows hit south Florida; City Place, which is known for outside dining, mall shopping and a variety of museums and art; and private golf country clubs, as well as yachting clubs. West Palm Beach also has the only drive-through safari in the United States, called Lion Country Safari. The animals walk around your car freely as you drive through! Another attraction is Worth Ave., which is home to designer and high-end retail shops. Finally, Florida doesn’t have state taxes, so everyone loves that!”
5. Daytona Beach, FL
Median Sale Price: $136,000
WalkScore: 36
Portion of Homes Waterfront: 37%
“About half of my closings this year have been from out of state buyers,” said Redfin real estate agent Tim Harper. “The main appeal of the Daytona Beach area, which sits between Port Orange and Ormond Beach, is our beautiful beach that runs about 20 miles long. Nationally speaking, we are one of the more affordable coastal areas and we’re on people’s radar for that reason. The home values are on the rise and the growth of commercial building has increased greatly with The Hard Rock, Latitude Margaritaville and Tanger Outlet Mall all going up recently. The warm climate and the proximity to Jacksonville and Orlando are great perks as well.”
6. Corpus Christi, TX
Median Sale Price: $240,000
WalkScore: 39
Portion of Homes Waterfront: 11.2%
“Corpus Christi offers lots affordable beach-front and canal-front homes,” said Redfin real estate agent Cindy Kranzel. “One of my clients recently told me they wanted a vacation home in Corpus Christi because the people here are ‘so friendly.’ It’s also a great place for a second home because of the extended rental season; Texas retirees and business owners looking to escape the snow flock here in the winter. Attractions in Corpus Christi include USS Lexington tours, the Texas State Aquarium, horseback riding tours on the beach, the Selena Museum and more.”
7. Galveston, TX
Median Sale Price: $224,000
WalkScore: 50
Portion of Homes Waterfront: 22.3%
“Galveston’s glistening beaches, quaint historic downtown shops on The Strand and beautiful East End Victorian homes are enough to make anyone want to vacation here,” said Redfin real estate agent Angela Pachicano. “But the island also offers a multitude of museums and live music. No matter what month you visit, there is always something to do—from movie nights to sand castle competitions to princess day on the beach!”
8. Fort Pierce, FL
Median Sale Price: $155,000
WalkScore: 38
Portion of Homes Waterfront: 32%
Fort Pierce, Florida is known by locals as the “sunrise city”, and for good reason! It offers sandy beaches, restaurants, charter boats and clear views of the water. You can interact with marine life at one of the many research facilities or museums that care for endangered manatees, dolphins and coral reefs. Also popular is the historical National Navy UDT-SEAL Museum, established in honor of those who trained in Fort Pierce during World War II. With a median sale price of just $155,000, it’s one of the most affordable beach towns on our list.
9. Sarasota, FL
Median Sale Price: $260,000
WalkScore: 52
Portion of Homes Waterfront: 17.5%
“Sarasota offers an impressive mix of culture and waterfront lifestyle that I find to be really unique and difficult to find all in one place,” said Redfin agent Brian Walsh. “From the quaint downtown strip of shops and boutiques to the equally charming St. Armand’s circle, the whole area is just as varied and engaging as anyone could hope. The pace is certainly more southern than northern, but when you’re just a few minutes from some of the world’s most famous beaches that’s sort of expected.
I also love the shopping and art scene in Sarasota. I think the blend of city culture and beach leisure is what really makes it a great place to find a vacation home. You can enjoy the solitude of a book on the beach and then run to UTC for some shopping. Sarasota has personality in every direction.”
10. Jacksonville, FL
Median Sale Price: $168,000
WalkScore: 26.2
Portion of Homes Waterfront: 15.2%
“Miles of beautiful, easily accessible beaches and abundant outdoor activities draw people to Jacksonville,” said Redfin real estate agent Wendy Seidel. “There are also great museums, festivals, sporting events, concerts and farmers markets throughout the year. Jacksonville is within close proximity to historic St. Augustine and an easy drive to Savannah, Atlanta, Charleston and the Florida Keys. The downtown area is being revitalized with new restaurants and shops. It’s a great place to buy a vacation home right now!”
11. Norfolk, VA
Median Sale Price: $179,900
WalkScore: 44.6
Portion of Homes Waterfront: 11.2%
Norfolk, VA is home to beautiful waterfront views, boardwalks and other local amenities great for families. Virginia’s most-populated city, Virginia Beach, sits close by as a great resource for entertainment, food and outdoor activities: on the water, in town or in the park. The beach town-feel provides an inviting atmosphere that’s comfortable and accommodating for all age groups.
12. Portland, ME
Median Sale Price: $279,000
WalkScore: 60
Portion of Homes Waterfront: 6.7%
“The Portland area boasts miles of sandy beaches, seaside state parks, breathtaking harbor and ocean views and picture-perfect sailing waterways, all within minutes of downtown Portland,” said Redfin real estate agent Van Wilkerson. “The Portland Headlight lighthouse is a popular summertime destination, as are the Old Port shopping district and excursions on or from Casco Bay. Portland is nationally renowned for its fine dining and craft brewery scenes, recognized by Bon Apetit magazine, the New York Times and many more in recent years as a top food and beverage destination. Seafood caught fresh off the coast and prepared daily by innovative chefs is the mainstay of Portland’s culinary appeal.
The Portland Arts District houses world-class museums, art galleries, antique shops and artist studios, as well as multiple performance spaces. A self-guided walking tour of the district takes place on the first Friday evening of each month when all galleries, museums and local businesses open their doors to the public. Recently voted one of the Greenest Small Cities, Portland and surrounding towns have 11 professional golf courses, 124 tennis courts, 95 playgrounds and acres of parks and nature trails. A popular farm-to-table destination, local growers supply organic meats and produce to Portland restaurants, supermarkets and neighborhood grocery stores.”
13. Charleston, SC
Median Sale Price: $278,625
WalkScore: 39
Portion of Homes Waterfront: 6.1
“Charleston is full of southern charm and fun things to do,” said Redfin real estate agent Michael Dalnekoff. “You can find festivals for just about anything. Right now, we have the internationally recognized Spoleto Festival going on. For 17 days, historic theaters, churches and outdoor spaces in Charleston are filled with performances by artists and performers in opera, dance, theater and more.
Charleston is also a foodie heaven. Downtown offers lots of walkable restaurants and bars. For the outdoors lover, there is tons of recreation, including beaches, golf, marshlands and wildlife preserves. There are historic carriage rides and many historic preserved plantations for the history buff. No matter what you’re interested in, Charleston is a great place for a second home.”
14. Long Branch, NJ
Median Sale Price: $332,500
WalkScore: 62
Portion of Homes Waterfront: 17%
Long Branch was once known as the Hollywood of the East Coast, where many acclaimed actors and actresses gathered and performed. By it’s current residents, it is often regarded as a “hidden gem.” In addition to a great public beach, Long Branch offers a wide variety of annual events and activities including free outdoor concerts, boardwalk workouts, free movies at the pier and more. Long Branch is home to the Seven Presidents Oceanfront Park, which was named for the seven U.S. presidents who visited the town.
15. Oxnard, CA
Median Sale Price: $450,000
WalkScore: 53
Portion of Homes Waterfront: 5.1%
If your beach home dreams include the Pacific Ocean and a quick drive to Los Angeles, Oxnard is the city for you. Oxnard is 60 miles northwest of Los Angeles, and offers beautiful weather, a myriad of outdoor recreation opportunities and miles of uncrowded beaches. Farmers markets, festivals, concerts and museums will keep you busy when you’re not hitting the beach.
Methodology:
Redfin looked at coastal cities with populations of at least 1,000 people and identified those where at least 3 percent of the vacant units were flagged by the Census as being for seasonal use to define “vacation cities.” The cities also had to have a median price per square foot of under $300 and a median sale price under $1 million. We then ranked each of the places by an equal combination of the following five factors:
- Price per square foot during the first three months of 2017
- Portion of properties on waterfront (using previous 3 years of listings)
- Percent of properties flagged for seasonal use by the Census
- Population (larger cities rank better)
- Walk Score
Want to start searching for a vacation home? Reach out to a Redfin agent below!
Here’s a tool for helping weigh the financial side of an exciting and personal question.
Everyone knows that if you’re going to spend a short time someplace, it makes no sense to buy a house there. Short stints are for renting.
If you’re putting down roots for the long haul — say, your children’s growing-up years or your retirement — that’s when it makes financial sense to buy, if you can afford to. By the time you sell the house, years later, much of the money you would have put into rent instead will have become equity, assuming you maintained the house and the real estate market was steady.
The question is, at what point does it become financially advantageous to buy rather than rent?
Zillow’s Breakeven Horizon offers an answer: As of the first quarter 2017, it would take 2 years and 1 month before it would make more sense for someone paying the national median rent to buy a house at the national median value. That answer changes at the individual market level, though. If you live in a place with particularly high home values like Los Angeles, for example, the breakeven point is at 4 years and 7 months.
It’s not necessarily “cheap” to rent in pricey markets, of course. It’s just that higher home values often translate into higher upfront costs to purchase. It takes time to recoup those costs and make the purchase profitable.
The Breakeven Horizon weighs tenants’ monthly rent payments and security deposits against home buyers’ down payments (assuming 20 percent down), mortgage payments (assuming a 30-year, fixed-rate mortgage at today’s prevailing rates), property taxes and home maintenance costs. It assumes that renters invest the 20 percent they would have used for a down payment, along with the property taxes they avoid paying, and make 5 percent on that money annually. The model also takes into account rental and home value appreciation forecasts for each market, among other things.
Your mileage can vary a lot. If you’re a renter who does not save the money you’d otherwise be spending on a down payment, maintenance and taxes, then your Breakeven Horizon will come much sooner than the median, as homeownership turns into a forced savings vehicle. Conversely, if you’re a renter who invests that money and makes more than 5 percent on it, then your personal Breakeven Horizon will be longer than the median.
Buying a house is a personal decision, with financial considerations that go beyond that one, admittedly large, asset. It can also be an emotional choice, and the Breakeven Horizon is just one measure that can help remove some of the guesswork.
Methodology
For buying, Zillow’s Breakeven Horizon assumes a 20 percent down payment, monthly payments on a 30-year fixed rate mortgage at the current interest rate for people with credit ratings between 680 and 740, property taxes, homeowner’s insurance, 3 percent purchase costs, 8 percent selling costs (because that’s how you’d realize the gains), annual maintenance costs equal to 1 percent of your home’s value, and, for condos, 1.2 percent a year in HOA fees. Those costs are offset by home appreciation forecasts and federal tax deductions. For renting, costs include a deposit equal to one month’s rent, rent payments and renter’s insurance. Those costs are offset by 5 percent annual investment gains on the down payment, savings from not paying for things like property taxes. We estimate a unique Breakeven Horizon for up to 3,000 individual homes pulled randomly from each ZIP code and use the Zestimate and Rental Zestimate on the same houses, so we’re able to consider the costs of buying a house against the costs of renting that same house.
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