Smart Moves

A married couple in their late 60s, a pair of lawyers on the verge of retirement, are hankering to buy a property in the New York City suburb of Riverdale where their four grandchildren live. But rather than settle for a small condo, they want a huge house where the young kids can have their own bedrooms and stay overnight.

“All our friends are downsizing. But we’re determined to upsize, if we can pull it off. The grandkids are still in lower school and spending time with them is imperative for our happiness, much more so than playing pickleball or traveling,” the wife says.

So what’s the catch? The lawyers are nervous about the volatile American economy. At this point, their retirement funds have withstood much of the pressure on the stock market that’s related to on-again, off-again tariffs and gyrating mortgage rates. But they worry that more economic shocks are ahead.

“It’s all a bewildering mess coming out of Washington. We’d like to be confident in a stable economy before we commit to a big home purchase, which is likely to run well over $1 million,” the wife says.

Her apprehensions are shared by many would-be buyers who aspire to purchase a trade-up property that’s much larger and more commodious.

According to a new survey of prospective homebuyers from Redfin, the Seattle-based real estate brokerage, 1 in 5 are expecting to sell stocks to help fund their down payment. Meanwhile, other wannabe buyers have paused their property search and gone into retreat.

“Some prospective buyers are pulling back because they’re worried about volatility in the stock market,” says Heather Mahmood-Corley, a Redfin agent in Phoenix.

For their part, the couple seeking a Riverdale property are tentatively advancing toward their goal of moving near the grandkids. Just this week, they signed a contract for a vacant lot in Riverdale where they plan to build a 5,500-square-foot house with six bedrooms, including a first-floor primary suite for their use.

“Our new dream house will have a yard big enough for a swing set, an in-ground pool and a trampoline,” the wife says.

James W. Hughes, a housing expert and professor at Rutgers University in New Jersey, is not surprised by the retiring couple’s ambition to obtain an oversized property in Riverdale. But he advises upsizers at any stage of life to choose new housing thoughtfully, particularly due to the uncertain American economy.

Here are a few pointers for buyers:

-- Honor your desire for an exceptionally spacious place.

Hughes points out that in some areas, exceedingly large houses are frowned upon, due to their environmental impact, as well as the sheer cost of heating and cooling such a place.

Fred Meyer, a Massachusetts-based home appraiser, says many buyers have solid reasons to hanker for a house with plenty of elbow room. Some seek such a property to accommodate a large family with boisterous school-age kids. Others, keen on working from home, seek home offices.

In contemplating a big house purchase, Meyer says the key is to carefully screen neighborhoods for future salability.

-- Pick the strongest neighborhood you can afford.

For many suburban neighborhoods, Hughes is very positive that real estate values will remain strong in the future, despite the prospect of a possible recession starting in 2025.

Hughes says your best bet is to choose a community located in what he calls a “winners’ circle.” These are neighborhoods that retain their desirability during all phases of the economic cycle. They are typically those that recover most quickly after a downturn.

“Affluent areas with strong amenities are usually on the leading edge of any recovery,” Hughes says.

Those seeking to buy a large house might get an excellent deal on a foreclosed property. But, as Hughes says, it can be a perilous choice to buy in an area where foreclosures are numerous.

“You absolutely want to avoid a neighborhood with lots of foreclosures. It can take a long time for a neighborhood like that to regain its reputation,” he says.

-- Screen for an area with a reasonable commute.

In the past, many people bullish on large houses willingly accepted a lengthy commute in exchange for more square footage and a sizeable yard.

But given uncertainties about energy prices and traffic, more buyers are now wary about signing on for a long commute. That means the future resale potential of a home you buy now in a distant suburb or exurban area could be uncertain.

“Buying a house that requires its owners to make a one-hour-plus commute is a significant financial risk, particularly if you have to sell within five to 10 years,” Hughes says.

-- Gear your purchase to the needs of your household.

Meyer says many parents of school-age children want a house with a large master suite that’s far from the cluster of bedrooms where their kids reside. This is especially likely if their offspring are teenagers with noisy electronic devices.

Empty-nest parents can also be candidates for large housing, which is particularly likely if both spouses operate a home-based business or do a substantial amount of remote work.

“It’s common nowadays for buyers to ask for his-and-her home offices. They want a big house with a library or two that’s separated from the main living areas of the property. This requires lots of space,” Meyer says.

It’s surprising but true that there’s another group of buyers who aspire to a large home purchase: well-to-do baby boomers.

“It’s not uncommon for affluent buyers over age 65 to seek a big house with multiple bedrooms where they can put up lots of visiting family members,” Meyer says.

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

When Amanda Brunato entered the field of real estate sales in 2017, she didn’t know how much the climate crisis would influence homebuyers and their purchasing decisions. But since then, she’s gone to great lengths to accommodate the burgeoning interest of her clients in climate-resilient housing.

“More buyers are on the lookout for climate-friendly property. It’s not only cost savings that concerns them but also their comfort and the health of their families,” Brunato says.

An increasing number of homebuyers believe it makes financial sense to plan for the long run and their energy costs, even if that means paying more for their place. That’s because they expect energy costs to rise significantly in the future.

Of course, affordability is a huge issue for buyers in many areas of the country, including in Berkeley, where Brunato is based. Like much of California, the San Francisco Bay area suffers from high housing costs. Also, few properties there have been updated to meet local climate challenges, including elevated risks for wildfires and extreme heat events.

“Our housing stock is quite old, and there are few vacant lots available for new construction,” Brunato notes.

Young adult buyers are especially cost-constrained when it comes to buying their first home, often carrying high student loan expenses, credit card balances and child care outlays. Meanwhile, home values have soared in recent years.

Brunato says both millennials, born between 1981 and 1996, as well as Gen Zers, born between 1997 and 2012, are grappling with financial limits on what they can afford to spend on housing.

Even so, there are exceptions to the rule for younger homebuyers who wish to build a new place that’s adapted to their local climate risks. For instance, many younger purchasers can obtain financial help from their parents or other family members. Also, adults of all ages who’ve enjoyed windfalls from work in the tech and finance industries may have cash on hand to make their housing dreams possible.

“The Bay Area has an unending population of people with enormous swaths of money,” says Josh Felder, a Redfin real estate agent in the Bay Area.

“I submitted an offer on a house in a really desirable San Jose neighborhood recently, and there were 22 offers. It ended up going for around 10% over the asking price, which is commonplace,” Felder says.

Economists at Redfin, a nationwide realty brokerage, say that 20.5% of properties nationwide in February sold for above their original asking price, down from 22.8% a year earlier. What’s more, some U.S. markets have begun to experience slightly lower home values.

Here are a few pointers for homebuyers seeking a climate-resilient property:

-- Seek out a real estate pro trained in climate science.

Karen Larson, an agent in a Milwaukee office of Sterling Real Estate Homes, is a veteran in the field, having begun her career back in 1981. But recently, she realized the importance of climate issues for an increasing number of buyers. As a result, she obtained a “green designation” through an offshoot of the National Association of Realtors (nar.realtor).

Wisconsin has been relatively free of extreme climate events, with the exception of sometimes serious thunderstorms and rising summer temperatures. Yet Larson says her homebuying clients are eager to tap the expertise she’s gained on the properties that will prove climate resilient.

“People are getting much more aware of the impact of extreme climates, including the droughts affecting our farmers. This is true all over the country,” Larson says.

How can you find a local real estate agent who’s earned the green designation through extra coursework and training? One way is to contact the National Association of Realtors’ Chicago-based Green REsource Council that grants the designation. Its phone number is 800-648-6224. Or you can email them: green@nar.realtor.

-- Consider a property already retrofitted for energy savings.

Are you searching for a place in a densely built-up area where there are few newly built homes with state-of-the-art energy features? Then you may wish to settle for a place that has already benefitted from climate conscious infrastructure upgrades.

“Look for a home with extra insulation or high-quality replacement windows with double or triple panes to avoid energy leakage. You’ll also want to consider a highly efficient heat pump system for both heating and cooling,” Larson says.

-- Search for a place with energy-efficient appliances.

Wealthy homebuyers in densely populated areas can sometimes afford to tear down an existing property, replacing it with a brand-new custom-built place with up-to-date construction and energy-saving appliances. But building anew can be prohibitively expensive, especially for young first-time buyers who are cash tight.

In that case, Larson urges buyers to at least consider an older property that already has high-tech kitchen appliances, like an induction stove or a late model refrigerator.

“Whether the current owner has done the upgrades or you do them down the road, you’ll be saving a huge amount on your energy bills,” Larson says.

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

Before the pandemic, walkability was the key feature homebuyers of all ages sought when choosing an ideal neighborhood. Proximity to restaurants, coffee shops, grocery stores and public transit topped the list. But these features have been outstripped by the quest for maximum square footage and lot size.

“It’s all about trade-offs, and these days the trade-offs favor indoor space and outdoor amenities. Buyers still love sidewalks and city attractions. But only if the advantages of traditional suburbia are addressed,” says Fred Meyer, a longtime real estate broker and appraiser.

The pandemic shifted priorities for the long term, according to Meyer, noting that the overall rise in home prices has made it impossible for buyers to obtain all the features on their wish lists.

The shift has been documented in a recent research report published by Zillow, a national real estate firm based in Seattle. The report says sellers with desirable backyard features, such as an outdoor shower, pizza oven and bluestone patio, can command higher prices from buyers.

Take the case of a San Diego couple in their early 30s who are selling the condo they bought enthusiastically in early 2020, just before COVID-19 hit the United States -- and before their baby boy was born the next year.

They still love living in the vibrant Little Italy section of downtown San Diego, with its popular restaurants and pastry shops as well as easy access to street festivals and waterfront vistas. But the area can suffer from noise pollution, including aircraft flying overhead, and the couple’s condo feels too small for their young son.

At this point, the couple are charting a new lifestyle in a close-in suburb of San Diego, where they’re hoping to find a neighborhood with highly rated public schools, as well as a property with a sizable backyard patio. But first they must sell their downtown condo.

Here are a few pointers for the sellers of urban condos:

-- Highlight the value of road access.

Granted, most buyers wouldn’t relish living near the noisy entrance to a major highway. But a location just a mile from that ramp could be a plus for those who work in suburban areas but want to live downtown, says James W. Hughes, a housing expert at Rutgers University’s school of planning and public policy.

“So long as they don’t hear thundering noise from that freeway, some people would prefer your city location to one tucked deep in a suburban neighborhood, which often means more time for their travel to work,” Hughes says.

If your city location leads directly to an important thoroughfare -- without being too close -- he says this point should be emphasized in your marketing materials. Also, if the home is a short walk to mass transit, stress this point as well.

Hughes says many young professionals still enjoy the benefits of in-town living. Yet numerous hold jobs with firms based in suburban office parks. Post-pandemic, many are no longer able to work remotely and must commute. That’s why highway access can be a selling point.

-- Don’t rule out a price cut if your home won’t sell otherwise.

Suppose you’re attempting to sell a home on the noisier side of a city community. But while comparable homes in more tranquil parts of your urban area are selling swiftly, your place continues to languish unsold.

In this case, Meyer says one of your few remaining options is to take a slight price cut below what’s being asked for comparable properties on calmer streets nearby.

It may not be necessary for sellers in popular city neighborhoods like San Diego’s Little Italy to resort to a price cut. But if your home is in an up-and-coming city community, especially one with high volume of construction noise, you might need a discount to attract buyers.

-- Stress access to improving city schools.

Is the community where you live served by quality schools, whether public, charter or private? And are many would-be purchasers people with young children?

If so, Meyer says, it would be a smart idea to promote the purchase of your home as a way to gain easy access to good schools for your kids.

“Assuming your price is realistic and your schools are well regarded, this could be a genuine plus for your sale. Remember that many young families with a preference for city living are working diligently to improve the quality of the urban schools their kids attend,” Meyer says.

-- Look into the cost of fencing your urban yard.

Some urban roads seem particularly risky for children and pets. These include avenues traveled by many commercial vehicles. If you own a detached house along this sort of roadway, Meyer says you might wish to fence your yard in hopes of lessening the fears of potential buyers.

“Fences aren’t cheap -- there’s a lot of labor involved in their installation. But the expense could be justified if it helps unload a hard-to-sell property,” he says.

Your listing agent should be able to advise you on whether the fencing of your yard would constitute a justifiable pre-sale expenditure. As one money-saving option, the agent might recommend that you fence your backyard only, creating a protected area where small children and pets could play.

If you decide to invest in a fence, the choices may seem daunting.

“When selecting your fencing, choose something in wood or vinyl. Stay away from one of those chain-link fences that looks like a military installation,” Meyer says.

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