Smart Moves

Once retirees hit their late 60s, many start hearing a chorus of voices from friends and associates urging them to sell their big family house and downsize to a much smaller place, ideally close to their grown offspring.

But real estate specialists say there’s no one-size-fits-all for retirement happiness. What’s more, they say moving near family can be a big mistake for some seniors, especially if it means they must make a long-distance move away from close friends and acquaintances.

“Older people who live in a true community ... have lots to lose by leaving the old neighborhood. In the new area, they might feel alienated and isolated,” says Eric Tyson, a consumer advocate and co-author of “Personal Finance After 50 for Dummies.”

“Most of us are much more independent than interdependent. Our extended families aren’t the kind that spend every Sunday night together,” Tyson says.

Fred Meyer, a longtime real estate broker and appraiser, says seniors should weigh their options carefully before making any major move. That’s because late in life it’s tough to reverse a major housing mistake.

Here are a few pointers for retirees:

-- Consider your lifestyle preferences as primary factors.

Meyer urges retirees to focus primarily on settling in a place where they can pursue their strongest interests.

“Ask yourself what you really like to do and then find the best places to fulfill those passions,” Meyer says.

Because lifestyle factors are so important in retirement, he says many seniors are happier living in modest housing while pursuing their dreams than in fancier housing elsewhere. Fortunately, those with more common interests, such as golf or tennis, can fulfill these in a wide array of locations. But others, like theater buffs, need a more particular location to pursue their passions.

Though not yet retired, Meyer intends to do so one day in Cambridge, Massachusetts, where he heads a real estate firm near Harvard University. He chose that setting because the community is “manageably small and walkable” and allows him to audit classes at Harvard. It’s also close to Boston, where he often attends cultural events.

Merrill Ottwein, a former president of the National Association of Exclusive Buyer Agents (naeba.org), says advance planning is crucial when it comes to selecting a retirement destination.

“Assuming you’re in good health and aren’t compelled to consider assisted living, start thinking about where you’ll live at least two or three years before making the big move,” he says.

Here are a few pointers for retirees:

-- Do a reality check on your retirement finances.

“Cost considerations are a huge factor in retirement decisions,” Ottwein says.

Are you short on retirement savings and believe you’ll need to sell your current house to make ends meet in the future? In that case, Ottwein urges you to plot a strategy with a trusted financial adviser or accountant before making any sudden move.

As you finalize the financial plan for retirement, he recommends you give serious thought to the level of mortgage debt you’re willing to carry in retirement. For most people, a comfortable retirement means freedom from large house payments.

“As our parents and grandparents were well aware, it’s far from ideal to have a mortgage in retirement. Strip down all your living costs and you’ll feel a lot more financially at ease,” Ottwein says.

-- Don’t rule out remaining in the area where you now live.

Through his several decades selling real estate, Ottwein has helped many seniors sort through their housing options. Experience has taught him that most retirees do best when they live within a 30-minute drive of their former home.

He says that retiring to a distant location could be a particularly poor choice for those who’ve found meaning through volunteer work near the community where they’ve lived for many years.

“Obviously, you could find a new volunteer gig at your new domain. But will you already have established relationships there? Probably not,” Ottwein says.

-- Consider the potential downsides of living close to your grandkids.

As retirees, you may relish time with your offspring. But how would you feel if asked to take on the role of regular babysitter for young children?

“Even if your kids only count on you on an intermittent basis, that could make it hard for you to schedule travel or other enjoyable activities,” Ottwein says.

One problem of making a major commitment to care for the grandkids is that this could cost you time and energy that might otherwise go toward fulfilling your retirement plans -- like learning to sail or taking up the trombone.

Another risk, though uncommon, is that your grown children may be less than thrilled at having you nearby. To be certain they’re OK with the idea, Ottwein recommends you have a candid conversation with them before deciding to move nearby.

“Though people rarely say it out loud, it could be that you and the kids really don’t like spending that much time together. That’s not a crime, just a reality,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Millennials -- young adults born between the early 1980s and mid-1990s -- are famously urban. Give them a city apartment near trendy restaurants, pubs and a Pilates studio and they’ll be content for years, or so goes conventional wisdom.

But real estate analysts say something surprising happens to these young urbanites after they’ve had a child or two: They leave their city apartments and retreat to a suburban enclave in search of the same sort of classic detached house in which they were raised.

Skylar Olsen, a senior economist for Zillow, which tracks housing trends across the country, says recent data show that many millennials surrender their city lifestyles once they reproduce. As homebuyers, this generation is more like their parents than previously believed.

“Young buyers with kids want a detached home. They want a large living space and a three-car garage. But because of cost, townhouses are where many end up,” Olsen says.

Though many millennials eventually make the predictable transition from city to suburbs once they become parents, real estate specialists stress that suburban living is not for everyone, regardless of their life stage. They advise homebuyers to carefully ponder their housing moves before investing in any property.

Here are a few pointers for home-buying couples with kids:

-- Start by envisioning your ideal neighborhood.

Doro Kiley, a certified life coach who helps clients navigate major transitions, says that before starting a home search, families should first imagine their ideal neighborhood. That should help them get as close as possible to the optimal setting.

“Always begin by thinking about the end product -- what you’d really like as opposed to what you would settle for. In many ways, we create our own realities,” Kiley says.

Once you have a clear picture of your ideal neighborhood, begin factoring in such practical realities as your financial limits.

-- Next, imagine the ideal property.

Kiley says both partners should write down their respective visions of a dream house -- including home features. They should then share their visions, combining the key elements of both into a single statement.

Written statements help people clarify their thinking and refine their plans as they move through successive drafts. This is also a way to help reconcile conflicting views.

Merrill Ottwein, a real estate broker and former president of the National Association of Exclusive Buyer Agents (naeba.org), suggests prospective homebuyers try to reconcile their differences by distinguishing between “wants” and “needs.”

For instance, a couple with two young school-age children and one parent who needs a home office for telecommuting might decide that acquiring a place with at least four bedrooms is a genuine “need.” But a formal dining room could easily fall into their “want” category.

-- Factor commuting distances into your calculations.

As Ottwein says, one of the most wrenching trade-offs many families face is between a larger, newer house with a longer commute, and a smaller, older place that’s closer to the city center and the workplace of the primary breadwinner.

Buyers who consider an outer-tier suburb are often driven by the desire for a larger property or what they perceive to be better schools.

“Sadly, good schools often correlate with newer suburbs rather than older areas that are close in,” Ottwein says.

But before you opt for a distant suburb, he strongly recommends you do morning and afternoon rush hour test drives from your target area. This way, you’ll know more precisely what sort of traffic to expect should you live there.

As Ottwein says, buyers should disabuse themselves of the notion that the current level of traffic congestion on their path will remain static. The odds are traffic will worsen as the years go on.

-- Don’t assume you’ll need a huge yard to accommodate your children.

Many parents with young children hang on tightly to the hope that their kids will have as large a backyard as they had growing up. This aspiration can influence them to pick an outlying suburb at the expense of their convenience and commuting time.

But are the trade-offs necessary to acquire a large piece of land always worth it? Not in many cases, says Ottwein, noting that today's children often spend much more time in organized athletic and recreational activities than did their parents.

“Today’s kids are programmed to the hilt with team sports, music lessons and school events. They have little time for the sort of free backyard frolicking their folks remember so nostalgically,” he says.

There are only a few homebuyers whom Ottwein believes make as much use of their large lots as they intended when they bought their place.

“Mostly it’s just those few people who want horses -- or who are true isolationists -- who are justified in accepting all the sacrifices that come with a long commute,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

Stacy Berman has sold homes in the Washington, D.C., area since 2002. These days, she’s surprised by how many buyers of all ages are bailing on the suburbs. Instead, many aspire to ownership of a condo in a historic building close to the heart of the nation's capital.

But after they’ve thought through the implications of living in an old building, many of Berman’s city-oriented buyers modify their plans and instead choose a unit in a newish building with a stripped-down “industrial loft” feel and an open floor plan.

“For some people, there are too many everyday trade-offs to life in an old building. For example, many old buildings lack the convenience of a washer-dryer within the unit and are short on garage space,” she says.

Steven Israel, a real estate broker affiliated with the National Association of Exclusive Buyer Agents (naeba.org), urges urban condo buyers to consider the cost implications of living in an older building.

“Older buildings can be more expensive to run. You want to be sure the place you buy has been maintained in the past and has a war chest for future improvements,” Israel says.

Mark Nash, a longtime real estate broker and the author of “1001 Tips for Buying and Selling a Home,” says whether you buy an older condo or a relatively new one, it’s still possible to get a favorable deal in many gentrifying city neighborhoods.

But he advises against selecting any building where more than 20 percent of the units are “investment properties” occupied by renters.

“I don’t care what great people the renters are. They simply aren’t as motivated to keep the building nice as owners are,” Nash says.

Here are a few pointers for city condo buyers:

-- Seek to avoid a very large condo building.

When Nash shopped for a condo in Chicago some years ago, he had a wide selection of buildings from which to choose. To make sure he selected well, he did a thorough comparison of his choices.

Nash says his analysis convinced him that it’s better to avoid a condo in any building with more than 500 units.

“There can be many cons to living in a really large building. One is that you can confront a lot of red tape when dealing with the management company,” he says.

After several weeks of condo shopping, Nash ultimately chose a unit in a building with just 44 units.

“For me, this is perfect. The residents are friendly, and the building isn’t run like a bureaucracy,” he says.

-- Look for an area with easy transportation access.

One of the attractions of city living -- especially in a vibrant urban community -- is that you can often position yourself within walking distance of many desirable neighborhood amenities.

“People are increasingly interested in living near their work, especially if that area also has good restaurants and other positives. Besides, you can probably count on better appreciation in a neighborhood with close access to a subway or commuter rail system,” Nash says.

When choosing an urban condo, don’t overlook such basic amenities as close access to shopping, especially to a quality supermarket. In addition, Nash recommends you forgo buying a city condo unless you plan to remain in the area for a minimum of three to five years.

-- Seek a building where noise won’t be a problem.

An older building can be elegant and give you more square feet than a newer one for the same money. Yet in the long run, you could find a newer building more commodious. Much depends on the quality of construction and the era in which the property was built. Though generalizations don’t always apply, Nash says structures under about 10 years of age typically provide lifestyle features you can’t obtain in an older building.

“Besides the comfort of a more energy-efficient building with good windows, you usually get better soundproofing in a newly constructed building. The floors are better and the walls are more insulated,” he says.

-- Think through whether your parking access would be sufficient.

Many who hanker for an urban condo imagine a lifestyle more reliant on public transit than cars. But while it’s true that relatively few people residing in New York City own cars, condo owners in most other major U.S. cities want access to a vehicle of their own.

Because of that, Nash says it’s usually unwise to buy a unit in a building that doesn’t allow you at least one parking space. Ideally, the building should also provide parking for your guests or have arrangements in place for valet parking.

“The reality is that, unlike many people around the world, most Americans are still very car-oriented. Even if you don’t care about car ownership, you’ve got to consider where your family and friends will park when they come visit you,” Nash says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)