Smart Moves

Millennials and Gen-Xers aren’t the only ones the pandemic is making restless to buy a bigger home. Some baby boomers are also planning their future housing purchase with a more spacious place in mind.

Take the case of a university professor and his wife, who runs a small antique business. This Social Security-age couple raised their three kids, now grown, in a three-bedroom rancher. Before COVID-19, they’d imagined moving to a condo in their college town. But pandemic living has shifted their priorities. Now they plan to upsize to a five-bedroom house with a pool.

“COVID taught us family overtakes all else. Our new vision is for a really big place where the whole family -- including the grandkids -- can visit often and stay over for holidays and vacations,” the husband says.

Moreover, all the months of home-centered living have intensified this couple’s interest in several luxury features, like a sumptuous home theater, a fitness center, a playroom for the grandchildren and -- most importantly --two dedicated home offices.

“We’ve had it sharing the dining room table for makeshift offices. I love my wife, but I also need square footage where I can do my own thing on the internet,” the husband says.

Stacy Berman, a longtime real estate agent who specializes in luxury home sales, doesn’t know the couple in this true story. But she works with many seniors who are revamping their housing plans in pursuit of a larger home, where family is more central.

For example, she cites the case of a couple in their 60s -- a soon-to-retire neurosurgeon married to a homemaker -- who are selling their suburban Virginia house in favor of a much larger place in Tennessee to be closer to the grandchildren they haven’t seen for months due to COVID.

“Many boomers are now revising their housing plans. The isolation caused by COVID has convinced many older people that bigger is better if it brings family together,” Berman says.

Of course, there are still numerous homeowners of boomer-age -- born between 1946 and 1964 -- who can’t afford to upsize. These are empty nesters who must stay put or downsize.

Even so, numerous boomers are sitting on enough home equity from homes they’ve owned for many years to give them a range of housing choices, says Ken Dychtwald, an expert on aging trends.

Dychtwald, co-author of “What Retirees Want” and other books on seniors, characterizes the boomers as a generation constantly reinventing itself.

“Boomers have lived in multiple homes. They’re comfortable with change and moving. And they’re determined to make their own choices. This is natural,” he says.

Here are a few pointers for senior buyers:

-- Try to reconcile differing views between you and your partner.

Rosemary McMonigal, a residential architect who’s advised clients for more than two decades, recommends that older couples with different visions create priority lists and acknowledge the validity of each other’s preferences.

Though many seniors favor a smaller property, McMonigal says it’s not unusual for one spouse to prefer a larger habitat.

“Americans have more square feet per person than people in any other country. So, emotionally, we’re accustomed to having a lot of private space,” she says.

-- Look for a home with intimate rooms if you want a supersized house.

Are you planning to buy a much more spacious domain? In that case, Ashley Richardson, a veteran real estate agent affiliated with the Residential Real Estate Council (crs.com), recommends you seek a home that seems intimate despite its large size.

“You don’t want to feel you’re rattling around in an oversized place that seems lonely, especially when you’re there by yourself,” says Richardson, who works for the Long & Foster company.

To find a large home where you’ll feel at ease, she recommends you avoid a property with a two-story atrium or ceilings that soar 10 feet or higher. Likewise, avoid a home with an oversized formal living room you’ll rarely use.

“The coziest arrangement is to have your big family room right off the kitchen, because people spend most of their time in the kitchen area,” Richardson says.

-- Don’t assume the home you buy post-COVID will be your last one.

Many older people think any place they buy after retirement will be the last place they live. But Dychtwald says it’s common for buyers in their 60s to live in two or three more places during their retirement years.

Dychtwald says those who want to buy a big home right after retirement often reverse course after they’ve gotten the “dream home phase” out of their systems. To simplify their lives to travel or reduce upkeep demands, they may later opt for a much smaller place.

He says someone who would like to downsize but accedes to a spouse who wants a big property can take comfort in the expectation that sooner or later the other person will likely also want a smaller home.

“Sometimes, you have to compromise. But that’s not so bad when your next move won’t necessarily become permanent,” Dychtwald says.

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

Many buyers who sat out the spring market are now regretting it. That’s because prices have risen since the COVID-19 outbreak began in earnest last March. And there’s still a great deal of pent-up demand for homeownership among young adults.

Of course, those who’ve lost their jobs due to the pandemic are in no position to make a purchase anytime soon. But many who are qualified to buy remain upbeat about the future and eager to move forward before they’re priced out of the market. Yet, at the same time, they see clouds on the horizon as they observe family members already falling behind on their mortgage payments.

The job-related fears of many Americans are grounded in reality, according to Frank Nothaft, the chief economist at CoreLogic (corelogic.com), an economic think tank that tracks housing markets throughout the country.

“The national unemployment rate soared from a 50-year low in February 2020 to an 80-year high in April. With the sudden loss of income, many homeowners are struggling to stay on top of their mortgage loans, resulting in a jump in non-payment,” Nothaft says.

He’s predicting “meaningful spikes” in mortgage delinquencies unless federal and state governments step in to provide further relief to financially troubled households.

Despite these economic warning signs, would-be homeowners who retain solid jobs and are therefore qualified to take out a mortgage resist the suggestion they put their buying plans on hold.

“People with young children are especially unhappy about waiting to get into a place of their own. They’re sick and tired of living in rental quarters where their landlord has so much control over their lives,” says Mark Nash, a real estate analyst and author of “1001 Tips for Buying and Selling a Home.”

Nash considers it ironic that in the midst of a recession, available homes are in short supply, thereby pushing up prices and sometimes even leading to multiple bidding situations.

“This isn’t like the period right after the Great Recession in 2008 when home prices dropped dramatically and bargains were everywhere. Current buyers have little hope of snagging a tremendous deal on a distressed property,” says Nash, a longtime real estate broker.

Indeed, a recent report from Zillow, the national real estate company, says home price gains are now accelerating. As of mid-August, the median list price in the United States was up 7.3% year over year.

In such a competitive environment, there’s relatively little that income-constrained buyers can do to maximize their odds of acquiring an affordable property. But real estate specialists offer these few suggestions for those who’ve identified a home they’d like to own:

-- Inform yourself on local property values before you bid.

Eve Alexander, a veteran real estate broker who works solely with buyers, says buyers need context on prevailing values to make certain they don’t offer too much.

“For comparisons, try to identify five to 10 comparable homes that have sold recently in the area where you’re looking,” Alexander says.

If you’re seeking to buy in a neighborhood with widely varied properties, it’s helpful to compare the homes on your list on a price-per-square-foot basis. Then adjust for differences in home features.

After estimating the current market value of the place you wish to buy, it’s time to decide how aggressive an offer you want to make. Alexander says that will depend on how enamored you are with the home.

“You won’t want to push the limits if you’ve fallen in love with the property and feel it’s a ‘do or die’ situation,” she says.

On the other hand, you might choose to make a lower offer if there are other available homes in the area that would meet your needs equally well.

-- Ask your agent to query the listing agent.

When owners have an urgent need to sell, it’s normally against their interest for that information to be broadcast to the world. Even so, Alexander says many listing agents will readily divulge such client information in response to questions.

“You’d be amazed how many listing agents will tell all to a buyer’s agent,” she says.

Another way that buyers can gauge the sellers’ level of motivation is to ask nearby neighbors. Alexander recommends buyers pick a weekend time to walk through the community, chatting with a few residents about the pros and cons of living there. In the course of the conversation, they’ll likely tell you what they know about why nearby homes are for sale.

-- Try to determine the seller’s equity position.

Prior to making a bid, it’s wise to inform yourself on the sellers’ ownership stake. Those with more equity have more potential room for compromise.

“What you’re looking for are insights into the mindset of the sellers,” Alexander says.

One source of clues on the owners’ equity position can be found by searching local government land records. At the minimum, these records -- typically available online or through your agent’s database -- should tell you when the current owners purchased the property and the original price they paid.

“If the sellers bought the house a couple of decades ago and haven’t refinanced, they should have a lot more equity, which means there could be more give on price,” Alexander says.

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

If you’re like millions of Americans, your life has been profoundly impacted by the COVID-19 crisis. But perhaps you’re different from some of the pessimists who abound nowadays. Maybe you perceive positive possibilities in the current situation -- especially when it comes to real estate.

Suppose you’ve long planned to sell your home. If so, would now be a favorable time to put your place on the market? That depends on where you live and your level of equity, housing specialists say.

For the time being at least, there are plenty of indicators supporting the view that this is still a sellers’ market in many communities, says Jeff Tucker, an economist for Zillow, the national real estate company.

Tucker notes that the availability of near-record-low mortgage rates is helping fuel a brisk pace of home sales this summer. In many parts of the country, buyers are compelled to compete over fewer and fewer listings.

“The flow of new listings has recovered somewhat, but not fast enough to replace all the recent sales, so inventory continues to plumb new record lows,” Tucker says.

At the same time, for fundamental economic and demographic reasons, the shortage of available homes continues to push up prices, despite the reality that the overall economy remains in recession.

In one very positive sign for sellers, Lawrence Yun, the chief economist for the National Association of Realtors (realtor.org), reports that prices are still rising in a stunning 96% of U.S. metro areas.

“Home prices have held up well due to a combination of very strong demand for housing and a limited supply of homes for sale,” Yun says.

Yet, as Tucker points out, there are several factors that explain why many would-be sellers have been staying on the sidelines during the outbreak.

“There’s no single reason sellers have been slow to return. But some possibilities include reluctance to have strangers tour their home; concerns about difficulty getting their next home; and an assumption that they couldn’t sell for a high price now,” Tucker says.

Obviously, the decision on whether to move during the pandemic is a personal choice, especially for households susceptible to serious consequences from the virus. Yet those in lower-risk categories might consider this an opportune time to make a housing transition.

“Granted, it’s a lot less convenient selling a place when an infectious disease is spreading. But the real estate industry is doing a terrific job with modified showings and virtual tours. That means for most sellers, showings shouldn’t present much of a barrier,” says Mark Nash, a longtime broker and author of “1001 Tips for Buying and Selling a Home.”

But as Nash notes, any decision on the timing of a home sale depends in large measure on your financial position and the realities of your neighborhood market. He encourages would-be sellers to investigate these factors before finalizing any moving plans.

Here are a couple of pointers for sellers:

-- Get a grip on your home’s value.

As always, a minority of real estate agents might try to flatter you into hiring them by suggesting your property is worth more than it truly is, says Dorcas Helfant, a Coldwell Banker broker-owner and former president of the National Association of Realtors.

“You don’t want a fantasyland answer about your home’s value. You want your agent to be brutally honest -- to give you ‘tough love’ when it comes to the value and condition of your place,” she says.

One way to increase the odds of finding a realistic listing agent is to interview at least three prospects before making your selection. Ask each to do a “comparative market analysis” on your property, using recent data from like home sales in your area as a basis to set the appropriate list price.

“Think twice about hiring any agent who comes in with a proposed list price way above the other agents you’ve surveyed,” Helfant says.

-- Crunch statistics to assess your sales prospects.

Besides the location and condition of your home, another factor could strongly influence how much cash you’d receive if you were to sell: neighborhood competition.

“The inventory of rival homes available in your immediate area has a huge influence on local property values,” Nash says. By “inventory,” he means the supply of unsold properties now on the market.

For example, if there’s a three-month supply of unsold homes currently for sale in your market, you can expect to wait longer (and receive less in proceeds) than if there’s a one-month supply.

Nash recommends you ask your listing agent for a graph showing fluctuations in inventory levels for your community over the last 12 months. Also, ask for a similar chart showing what percentage of list price, on average, sellers have been receiving.

“If your home is priced right from the outset, it should fetch at least 95% to 100% of your list price -- or even more than the list price. What’s more, this gap should be narrowing rather than widening,” Nash says.

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