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Should You Buy A Home For Retirement In Florida Sooner Rather Than Later
Dated: October 12 2020
Should You Buy a Home for Retirement in Florida Sooner Rather than Later?
Every day in the U.S., roughly 10,000 people turn 65 and retire. Prior to the COVID-19 health crisis that swept the nation in 2020, most people had to wait until they retired to make a move to the Florida beaches, our beautiful golf courses, or the many senior living 55+ communities available in Pinellas County, Florida. This year, however, the game changed.
Many of today’s workers who are nearing the end of their professional careers, but maybe aren’t quite ready to retire, have a new choice to make: should I move to Florida before I retire? If the sand and sun of the Gulf Beaches in the Tampa Bay area are calling your name and you have the opportunity to work remotely for the foreseeable future, now may be a great time to purchase that beach bungalow on St Pete Beach that you’ve always dreamed of for your retirement or the single-story home that might be a little further away from our beaches and Downtown St Pete nightlife. Whether it’s your 2nd home or a future retirement residence, spending the next few years in a place that truly makes you smile every day might be the best way to round out a long and meaningful career.
Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), explains:
“The pandemic was unexpected, working from home was unexpected, but nonetheless many companies realized that workers can be just as productive working from home…We may begin to see a boost in people buying retirement homes before their retirement.”
According to the 20th Annual Transamerica Retirement Survey, 3 out of 4 retirees (75%) own their homes, and only 23% have mortgage debt (including any equity loans or lines of credit). Since entering retirement, almost 4 in 10 retirees (38%) have moved into a new home. They’re making a profit by selling their current homes in today’s low inventory market (aka a seller's market) and using their equity to purchase their future retirement homes. It’s a win-win situation.
And don't forget, just because you are thinking about purchasing a home for your future retirement plans in Florida, it doesn't mean you must commit to living in that home now. As a fellow real estate investor, this is also a great time to choose a home that makes a perfect rental investment now and the perfect home for retirement later. As many real estate investors will tell you, when you buy a home and rent it out for enough money to cover or exceed your monthly house payment (aka carrying costs), someone else (the tenant) is paying that home off for you. By the time you're ready to retire in that property, it may already be paid off if you took out a mortgage to buy it, even if you've never lived there. And don't forget that historically, investors that hang onto homes over the long term accrue more wealth than investors who don't own real estate. That's because real estate often increases in value over the long term, despite ups and downs in the housing markets over time.
Why Tampa Bay Homeowners Are Making Moves Now
The health crisis this year made Tampa Bay Residents more aware of the importance of our family & friends, and many of us have not seen our extended families since the pandemic started. It’s no surprise, therefore, to see in the same report that 32% of those surveyed cited the top reason they’re buying a new home is that they want to be closer to their family and friends (See graph below):The survey also revealed that 73% percent of retirement age homeowners currently live in single-family homes. With the overall number of homes for sale today hitting historically low numbers, and with the buyer demand for single-family homes skyrocketing in Florida, there’s never been a more ideal time to sell a single-family home and make a move toward retirement in the Tampa Bay and Gulf Beaches areas of Florida. Today’s real estate market has the perfect combination of driving forces to make selling optimal, especially while home buyers are looking to take advantage of low interest rates.
If you’re one of the 73% of retirees with a single-family home and want to move closer to your family, now is the time to put your house on the market. With the pace homes are selling today in Pinellas County and the Greater Tampa Bay, FL areas, you could essentially wrap up your move – start to finish – before the end of the year.
Whether you’re looking to fully retire or to buy a 2nd home with the intent to use it as your retirement home in the future, the 2020 fall housing market may very well work in your favor. Connect with us at the Sandy Hartmann Group today to discuss your options in our local Tampa Bay housing market.
Andrea is the Managing Partner of The Sandy Hartmann Group. Andrea was born and raised in the Tampa Bay area and is a licensed Realtor with over 15 years of Marketing and Finance experience, holding ....
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