The Upcoming Senior Housing Crisis
Hello it's Debbie Miller with mover improve with Debbie. Welcome to the show today. I WanNa talk about a topic perfect. It's very much the most talked about in the housing industry. At least the coming housing crisis is approaching and owners look like deer ear in the headlights as far as knowing what to do baby boomers especially are going to feel the brunt of this In the early two thousands builders were constructing instructing large elaborate houses often known as mcmansions as baby boomers are aging though. They're discovering that maintaining a large home ms more of a challenge and it's only going to get worse as they get into their eighties and beyond in today's real estate market buyers of all ages are looking for smaller are newer homes in walkable areas properties with clean lines open floor. Plans are selling the fastest and millennials which is now album largest group of homebuyers. They prefer minimalist interiors and sleek appliances. They're tech savvy. They expect the homes to reflect at these design features faced with a mass exodus of baby boomers who want to sell sale and move to either a rental or smaller home or some other choice. The real estate market is due for a big change over the next ten years or more baby boomers want to downsize. But face competitions on millennials who want the same smaller spaces that they do and the baby boomers were born between nineteen eighteen forty six and nineteen sixty four and they currently own thirty two million yes. That's thirty two million homes or two out of every I five homeowners is a baby for there will be a real estate selloff over the next several years as baby boomers sell their homes to move to warmer climates or lower tax states. They have to sell in order to finance their retirement or unload the home. That was great when they were younger. But now has too many features to prevent aging in place. So those who do choose to age in place will make up the second stage of selling as as they move into assisted living the first phase of courses those who are ready willing and able to retire now and move on than the ones who want to age in place will be the second stage. The final stage will consist of those whose heirs must sell their parents home to settle the estate There'll be heirs who decided to move in the family home in hold onto it but more properties than this will let the market so you need to think about who will buy your home. Who is going to buy the home? You're in regardless of the phase or the stage that you're In whether you're just getting ready to retire and move or you want to age in place or you have to sell the home to settle in a state. So that's what I want to discuss. Today will your home really appealed to a millennial or will it appealed to an investor or a move up buyer. A lot will depend on the condition in your home. It's location and price. Millennials Gen Y. generation comprise thirty five percent of all buyers. Hires more than baby boomers. The millennials were born between nineteen eighty and the year two thousand and overwhelming majority of them. Believe I believe that. Homeownership is an important long term goal and they see real estate as good investment over the next several years. MILLENNIALS will account for about two two thirds of new household formation. Now it's interesting over. Half of them prefer the suburbs when they're looking for a home. Younger millennials millennials who are still renting preferred the urban setting according to statistics from the National Association of homebuilders for Re Quarters won on a single family. Home of about twenty five hundred square feet On at least two levels and it has to have an open concept. Four plan over eighty percent said Ed they want either three or four bedrooms and two or two and a half bats. The Gen Y.. Generation millennials has a much clearer idea of what they want in a lifestyle as well as clear ideas on how to achieve that lifestyle. It's harder for millennials to buy their first home. I mean after all homes costs a lot more than when baby boomers I bought theirs and they have more debt whether it be Tuition payments or credit it card. Or whatever and there's a very limited supply of starter homes on the market and that causes price increases as well. It's no wonder it's so. Many many millennials love alternative living situations like tiny homes which are much cheaper and do offer a flexible left lifestyle. If you're just starting but it remains to be seen what will happen to those tiny homes when millennials want to sell and move up to a larger home the smart technology like using their phone to check on their house. Did they leave the lights on or forget to lock the door. Remote opening is a big deal or or pre heating their oven if they cook those will be expected features the interior design of the home a focus on suction more than a lot of square footage. He is more important to them. They value outdoor living space for entertaining friends and family. They do not want to live in high density communities like a condo or townhouse and they do not want golf course communities so baby boomers who live in active adult communities on golf courses. Cisse's down the road. You may have trouble selling unless the golf course itself is converted into something else. top-ranking interior material features include new kitchen appliances large master bedroom a two car garage minimum and finished lower level. They prefer hardwood wood floors over instead of carpet. And they're willing to pay extra to have solar panels and energy storage capability and they're looking for newer home announced no older than four to ten years and they will consider older homes and had been fully renovated that has to have been done living close to a major city. Eddie remains important. That living in the city is not as much of a factor as it was thought to be as a baby boomer. Those with larger for square footage will either have to walk away from their home or settle for a lower price than they want. And we're seeing that already. In the marketplace in various areas of the country there will be a glut in supply which will decrease the value of their large homes. But you can consider some other options. It's like selling to an investor. You may have a home with years of deferred maintenance that may be too costly to bring it up to today's standards. This type of property appeals to an investor who for a lower price will buy it and either renovated or tear it down and build a new home. You don't get as much chm money when you sell this way. But sometimes getting cash in a short period of time because there's no inspection no lender it sold as is there's no appraisal. No Oh hassle. That can help you move quickly onto the next phase of your wife especially if your mortgage is paid off you can also negotiate the settlement date which allows you more time to get packed and moved without a tight deadline and you can settle quickly. Get the cash then move out a few weeks later depending on your needs needs because the builder or the investor purchasing has to go through the permit process and that sort of thing and since you're not as Cintra choosing not to be represented ended by a realtor. Be Sure that the investor pays your closing costs than any back taxes pays off any existing liens and mortgages and leaves you a fair amount to move onto something something else. It's better to have a realtor in this situation because they can negotiate a better deal for you but you WANNA be sure you research the investor or the company company. WHO's interested in buying your home? There are scam artists. Plenty so you need to require proof from the settlement company that your mortgage balance has been paid in full fall in that. The deed is duly recorded. S- called a certificate of satisfaction. And make sure you get the investor credentials. Find out what experience they have in your market. You'll see ads on the TV. We'll buy your home in a short amount of time. And that's where they WANNA make sure off of their credentials. I the other option is to sell to a move up buyer Move up buyer is one whose outgrown grown their current starter home and needs more space due to a growing family or they need to live closer to work or they're taking in their parents to live with them. So what are some of those issues to watch for. A buyer may need to make the purchase of your home contingent on the sale of their current home. So when you want your realtor to do is look at the buyer's home and the address and the condition and find out. How long is it taking for other houses houses in that neighborhood to sell and look under the active? The under contract is sold and also the houses that haven't sold in the past ninety two hundred eighty days and you can ask that the buyer get a bridge loan to us as the down payment for your home. She can continue with your settlement. And Your realtor will check with buyer's lender to be sure that the buyer can carry two mortgages if their house doesn't sell right away although with low inventory the way it is. That's not an unusual case. The contract will mention that the sale was contingent on the settlement of the buyers home. It's not unusual for the buyer to sign their documents documents in the morning and then have the funds available to buy your home that afternoon the next day if your home is in an area that doesn't sell quickly. The buyer's home isn't a hot neighborhood in the process of workout sign most likely the route your realtor needs to check with the buyer's lender to be sure that the the buyer has the funds to close you're essentially taking your home off the market for a while so you WanNa have your realtor include a clause that allows you to take a backup offer that may not be contingent on the sale of the buyers property that way you can go back to the current buyers get another offer and say hey. I've got another offer it's not contingent. Do you want to remove the contingency on the sale of your home and proceed to settlement. If not then you would have the opportunity to take the other other offer. That's not contingent on the sales. Their home another option is to make some strategic low cost improvement in to attract more buyers SA- but you say well what upgrades improvements will give you the most return while you don't get a second chance to make a good first impression and and the three most important things to remember when you're preparing to sell our first the preparation which is getting the house ready. The second is pricing overpricing. Overpricing will guarantee that it sits and presentation meaning marketing to the right audience according to Remodeling magazine. Here's the list of the most productive improvements that will give you the most return on your money exterior improvements what you can easily improve the curb appeal with just some landscaping like mulching in a non desert area colorful plants by the were in power washing the exterior people want to buy a house. That's clean doesn't need any work. You might choose to replace the front door with a steel reinforced one. If you don't have the money for that you can paint the existing one and install new door hardware washing all the windows so people can see out and let the sun in that will alone return a ninety one percent return on your money. Spent another thing you can do is if you do have a garage. You might WANNA consider replacing the doors. If they're older gives you about a ninety one percent return another item to think about is if you have siding manufactured stone veneer replacing vinyl siding with stone. Veneer is a big aesthetic improvement movement. Gives you a ninety seven percent return. According to the magazine another thing to consider is adding a deck. That buyers want to extend their Outdoor entertaining space adding a deck and railing systems with pressure treated wood posts and railing. bouncers will hold about an eighty two percent value when you sell okay. But if you already have a mixture you power-washing stand and seal it to improve the look so it looks clean and ready for them to move out onto there are also minor kitchen upgrades you can consider. Many buyers obviously considered the kitchen is the heart of the home and spend most of their your time there a minor overhaul will get you as much as eighty one percent of the cost and help. The House sells faster. You can even paint the cabinets instead of replacing using them Switch out the old hardware for new replaced laminate counters with courts for a new laminate. There's a lot of choices that look like. Real Quartz and quartz is replacing granted as the counter of choice. Since it's easier to care for at you can install new inexpensive sink and faucet when you install the new counters you can swap out your old appliances for new energy efficient ones buyers. Want move in ready in the kitchen is the most important room in the house. Another thing you can do is to update your bathroom. Rebound tile replaced the toilet with a modern looking one replacing fixtures gers with new ones at a bare minimum. And of course the one of the most important things you can do is to add fresh paint throughout the house in neutral colors will appeal to a wide audience buyers. It's money really well spent because you'll track more buyers if your house is very is a unique week one with various types of decorating schemes. You'RE GONNA have to neutralize it. That's just it so what's happening today's houses well buyers younger buyers especially have watched. HDTV A lot and they're expert. Expectations are high when they look the homes and sellers who watch. HDTV won't their realtor to help them prepare their home to attract the most buyers without spending a lot of money sellers. Don't WanNA spend a fortune to sell their home. So what features can they incorporate inexpensively to attract a wide audience of buyers will first of all all you can think about using any dead space to improve the functionality. Maybe you could add some shelving. A simple work table for computer work area. Maybe you could create a mud room or storage closet. This could be carved out of an entry way or under a covered area just outside the main entrance to the residents not even in a garage. Josh just adding hooks and built in shelving or cubbies for boots and jackets adds to the value at shelving in your laundry room if you don't already havoc Abbott or paint the cabinets or install cabinetry multi generational housing is definitely on the upswing. According to Pew Research Search Center over sixty million Americans live in multi generational households and even if they don't have that option now they want a house where they can plan so that eventuality. I have a client. You purchased a two level home in which the lower level was converted into an apartment like dwelling with its own entrance. There were no steps to worry about. Walk out onto patio and parking was easy. There were no steps and the upper level became the space for the adult children. The lower level bath was redone with accessible features. Like a walk in shower and those kinds of things make a big difference. Another thing to think about his elevators are more common than you think. Builders are installing either an elevator or an elevator ready space so that one could be added later if needed and the designs for elevators now allows variety of installations. It's amazing how far this area has come. Another thing to think about is hard scaping on the outside. Space buyers. Love Patios and heated pools and outdoor fireplaces fireplaces places where they can extend their living space sprinkler systems space to cook and entertain outdoors are very popular. Now you WanNa make sure though on the Interior that you use a light neutral color paints around a coat of fresh paint and colors that younger buyers will want goes a long a long way to attract them buyers. Also as I said what new energy efficiency efficient appliances in the kitchen. Large Kitchen islands are very popular. Now I've seen some. That are absolutely huge. You can hardly reach across to clean the whole singing from one side because it can be used for meal prep as well as the dining table. Label buyers are not as interested in whirlpool tubs. They're looking at one large or two person shower with rainfall showerheads and tile walls in the bath he floors or a fancy upgrade but not absolutely necessary but the big showers are where the market is at right now and smart home. Teachers used to be rare and now they're the norm. millennials won't smartphone features that they they can control using an APP on their phone. They want the maybe a ring doorbell system or a nest thermostat those things are easy to install and they attract younger buyers for sure. So what do you do if you live in an age restricted community. Now the resale there will depend on several factors. Older baby boomers will be able to stay in an active adult community a longer period of time but the younger baby boomers I if they buy into an active adult community. There's not a whole lot of people behind them coming up through the ranks who want to buy in that type. I of community millennials. Do not want that kind of lifestyle and you also need to consider how many new homes are still being built in your community. Mutiti if it's completely built out than that may be okay unless the facilities and amenities are getting older and haven't been updated updated so you know if you bought early in the development process. Many bars won't to buy a brand new home so they can get the features in the finishes they want and and then you want to look at. How many other communities competing with yours in a several mile radius because as builders are accommodating what they think the baby boomers want in an active active adult community more and more of these communities are popping up and they'll be new and that people can pick those finishes they want and the features and you have to make sure that your list price is competitive with the market if there are many new homes being built in the area and yours is older? You'RE GONNA eat more pressure slightly below the others to attract buyers but make sure it's spotless and updated and you'll get a better price and as I said As builders develop more active adult communities to meet demand keep in mind that you can only resell your active adult. Oh property to someone. In that age category currently fifty five and over is the majority of the age. That's out there so you said if you're an older baby boomer. It may not be as difficult to sell to a younger over but if you're younger boomer it'll be harder to sell because there's rumors interested in buying and many boomers just want to rent. Instead of buying there are community sprouting up across the country that are billed to rent builders loved. I love constructing these communities because once communities finished they turn over the maintenance and upkeep to a property management company they walk onto the next one. This this type of community is very popular. Many boomers on as you if you listen to my previous podcasts on buy or rent in retirement you'll understand that. This is a growing area of the population they're interested in renting. They don't want the deal with were gauge and upkeep and all that stuff they ramped they just call it. A property manager property manager comes in and fixes it big. The big problem with that is that you can't can't make it your own. Can't make adjustments. You can't knock out a wall. You can't expand the kitchen and that sort of thing. It's pretty much. What you see is what you get if you don't like it to bed so it is a lot to think about? So if you have questions please feel free to contact me at moves or improve with Debbie a g mail DOT COM and previous. podcasts include a variety of topics on housing. So be sure you listen in find another topic to listen to and enjoy. Thanks for joining me.