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Category Archive: ‘Boomers’

Move While You Are Younger

There are already people who have decided to buy and/or sell this year, and to those folks I’ll say in advance – congratulations, and I’d like to help you!

I’d like to reach out those who are thinking of putting off the move for another month or year.

Here are reasons why you should re-consider:

  1. The actual moving is mentally and physically taxing.  Even if you have plenty of family to help sort through the junk and pack everything up, you will want to have a say in many of the decisions.
  2.  Moving to a new home almost always means getting accustomed to a new home, area, amenities, and basic things to live.  You want to be on top of your game to endure that many changes.
  3.  People are buying one-story homes in advance because of the lack of supply and the pressure on pricing – demand is heavy, and supply is light!
  4.  The current administration could mess with the tax law, and tweak the $500,000 tax-free profit you have coming from your home sale.
  5.  The move is very likely to be more difficult than you think!

Recently, I had a widow move to a retirement facility after her husband had passed away (she was younger).  We lamented that if they would have moved together, he would have loved the new place, and she would have had a network of friends already built by the time he passed.

If you are getting up in years, and know that you have at least one more move in you before you’re done, don’t wait too long.  Seventy years old is about the latest anyone should move, and 60 years old is recommended.  You want to enjoy a few years at the new spot!

Don’t wait too long!

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Posted by on Feb 6, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, One-Story, Thinking of Buying?, Thinking of Selling? | 1 comment

Are Boomers Ill-Prepared?

The baby boomer generation is huge, roughly 78 million Americans born between the years of 1946 and 1964. The oldest are just turning 70 and the youngest are just 52 (and usually denying that they are even baby boomers.) It’s a big spread. But one thing they all have in common is that they are getting older, and that their lives are changing.

It’s an issue that we have covered before, quoting Jane Gould’s book “Aging in Suburbia,” which I described as “a fascinating and troubling book that covers so many of the issues we will be facing down the cul-de-sac.” She notes that boomers “have not considered, at a personal level, what they will do when their homes are too large, their incomes shrink, and their mobility needs are in flux.”

That’s why a new study looking at the housing preferences of the baby boomer generation from the NAHB, the National Association of Home Builders, is so scary. Because when they were surveyed, it appears that what boomers want are big suburban houses on winding culs-de-sac. It proves that Gould was dead on, that the boomers are simply not considering what’s down that long and winding road.

It’s bizarre. 78 percent actively prefer a cul-de-sac to a connected street. They want double car garages. They want 2,000 square feet on one level. They want three bedrooms. And they really, really don’t like the city.

Only 7 percent of boomers prefer a central city location. About two-thirds prefer a home in the suburbs (close or outlying) and just over a quarter prefer a rural area. Only 8 percent thought being near public transit was essential. Because of course, they’re going to be driving forever.

Yet the main reason they might consider a move is the worry about “changes in health or increased physical limitations. And “the leading two reasons that would motivate boomers to take on a potential move are finding greater peace of mind and a fuller life.”

Not high on any boomer’s list is the environment. Only 13 percent are willing to pay more out of concern for it. However they will pay more if they’ll get lower utility bills, up to $10,000 to save $1,000 per year, which is pretty hard to do.

Read full article here:

http://www.mnn.com/your-home/remodeling-design/blogs/new-study-confirms-boomers-are-clueless

Posted by on Jan 31, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market | 10 comments

More Boomers Retiring

It’s inevitable that as more boomers retire, the more we’ll see those lightly-maintained-and-home-depot-upgraded houses hitting the market.

Hattip to daytrip for sending this in:

https://www.bloomberg.com/news/articles/2017-01-06/older-americans-are-retiring-in-droves

An excerpt:

Whether a larger share of senior citizens had previously been incented to remain in their jobs by higher wages or by a need to keep working in order to rebuild their nest eggs after the financial crisis is still an open question. But the recent non-farm payroll reports affirm that the secular trend of rising retirements can only be delayed for so long.

Boomers – would you move if you just had a place to go? Start here:

http://www.bubbleinfo.com/general-information/where-to-move/

Posted by on Jan 7, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market | 4 comments

San Diego County Annual House Sales

For those looking for a more binary view of market conditions (hot/cold, good/bad), let’s compare San Diego County detached-home sales for 2016 to the previous years.

San Diego County Annual Detached-Home Sales

Year
No. of Sales
Median Sales Price
Avg. Days on Market
2012
25,023
$383,000
76
2013
24,910
$455,000
50
2014
22,101
$495,000
47
2015
23,732
$529,000
42
2016
23,802
$560,000
37

The median sales price has gone up 46%, yet the number of sales were only 5% lower in 2016 than in 2012. Last year, sales were higher than the last two years, and the average days on the market are half what they used to be

Those are fantastic market conditions!

Could the momentum keep going? Will it?

There were good reasons that the real estate market has tanked previously. In 1981, mortgage rates hit 18%, when just four years prior they were in the 8s – that is sticker shock! In the early-1990s, we had the Savings & Loan crisis when they gave away all the foreclosed houses. Of course, in 2006-2008 we had the Mozilo Crisis, where exotic mortgages caused a panic.

It would take a catastrophic event to topple our market now. Sales and prices may bounce around, but the baby-boomer wealth distribution program will juice the market for decades. The final gift of boomers will be to make sure their children all have houses, and even Trump won’t screw that up. If anything, the hysteria will cause more boomers to worry about their kids!

Here are the NSDCC annual sales, broken down into North and South:

La Jolla-Del Mar-SB-RSF-Carmel Valley Detached-Home Sales

Year
No. of Sales
Median Sales Price
Avg. Days on Market
2012
1,364
$1,175,000
93
2013
1,462
$1,350,000
61
2014
1,285
$1,445,000
63
2015
1,301
$1,500,000
63
2016
1,369
$1,520,000
58

Carlsbad-Cardiff-Encinitas Annual Detached-Home Sales

Year
No. of Sales
Median Sales Price
Avg. Days on Market
2012
1,790
$684,042
70
2013
1,756
$770,500
41
2014
1,564
$815,000
41
2015
1,723
$870,000
37
2016
1,639
$919,000
34

What could cause the market to tank, besides a catastrophic event? We’d have to run out of buyers. But if there is any place in the good ol’ USA that people will keep coming, it’s San Diego!

Posted by on Jan 4, 2017 in Boomer Liquidations, Boomers, Jim's Take on the Market, Market Conditions, North County Coastal | 15 comments

Boomers Retiring Abroad

Newly widowed, Kay McCowen quit her job, sold her house, applied for Social Security and retired to Mexico. It was a move she and her husband, Mel, had discussed before he passed away in 2012.

“I wanted to find a place where I could afford to live off my Social Security,” she said. “The weather here is so perfect, and it’s a beautiful place.”

She is among a growing number of Americans who are retiring outside the United States. The number grew 17 percent between 2010 and 2015 and is expected to increase over the next 10 years as more baby boomers retire.

Just under 400,000 American retirees are now living abroad, according to the Social Security Administration. The countries they have chosen most often: Canada, Japan, Mexico, Germany and the United Kingdom.

Retirees most often cite the cost of living as the reason for moving elsewhere said Olivia S. Mitchell, director of the Pension Research Council at the University of Pennsylvania’s Wharton School.

“I think that many people retire when they are in good health and they are interested in stretching their dollars and seeing the world,” Mitchell said.

Read full article here:

http://www.csmonitor.com/USA/Society/2016/1227/Why-are-more-Americans-retiring-abroad

Posted by on Dec 28, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market | 1 comment

How Long Have Sellers Owned 4

Who is selling?

This is the fourth reading – this time I checked the last 112 detached-home sales between La Jolla and Carlsbad.

Here are the categories of when the sellers purchased the home they sold:

Year Purchased
12/12/15
3/19/16
6/18/16
12/13/16
0 – 2003
41%
42%
39%
57%
2004 – 2008
23%
29%
24%
19%
2009 – 2011
15%
11%
13%
6%
2012 – 2016
18%
18%
19%
13%
New Homes
2%
1%
5%
4%

It has been consistent all year – the majority of sellers are long-time owners, which almost always means buyers are getting a project to some degree.  No matter how much work the sellers have done to their house, buyers can plan on spending plenty to bring it into this era, and modify to their tastes.

Buyers should get comfortable with the idea of remodeling just to expand the inventory.  It is helpful if you or your realtor can properly assess the repair costs before offering, and know that it’s rare to get a dollar-for-dollar discount.

More stats:

Other Categories
12/12/15
3/19/16
6/18/16
12/13/16
Number of Sales
125
114
144
112
Avg. $$/sf
$505/sf
$552/sf
$550/sf
$529/sf
Median SP
$1,080,000
$1,129,000
$1,291,500
$1,274,500
Avg DOM
60
38
42
54
Sold in First 10 Days
24%
32%
35%
28%
Lost $$
11
3
7
7
0 DOM
5
8
7
2

Today’s stats are fairly similar to the first reading last December, with the exception being the median sales price up 18% – which isn’t the appreciation rate for every house.  It means more of the higher-priced homes are selling.

Posted by on Dec 13, 2016 in Boomer Liquidations, Boomers, Jim's Take on the Market, North County Coastal | 0 comments

Retire At Sea

cruise

Maybe you don’t have to worry about where to move – just float around!

H/T Daytrip!

Retirement has often been synonymous with quietly living out your golden years in a sunny climate. But for a more adventurous breed of retirees, the end of work life opens a door to a more extreme type of sea change.

The siren’s call of cabin life is beckoning increasing numbers to traverse the globe via the ocean. And, it’s a surprisingly more attractive – and affordable – option than assisted living for some retirees.

The number of people who take cruises is at an all-time high, with 24 million passengers expected to set sail this year worldwide versus 15 million a decade ago, according to the Washington, DC-based Cruise Lines International Association. Half of these cruisers are 50 or older, and, of those, a small number are making the ocean a second home or even their permanent home.

Cruise ships might be an ideal retirement destination, although some things such as healthcare can be tricky. They offer, well, everything. From nightly entertainment to exercise equipment to Internet, most ships are equipped with anything you need to make a place home — including the travel, often a big priority for younger retirees. While no group tracks the number of people choosing this new form of retirement, a handful of cruise lines confirmed that they are seeing more near-year-round cruisers with some frequency.

For some, retirement at sea involves taking over a small stateroom on a standard cruise ship with repeated sailings and itineraries. For others, it means purchasing a “residence” (a high-end apartment at sea) on a luxury ship like The World, which is managed by Florida-based ROW Management Limited, or the yet-to-launch Southern California-based Utopia, both offering exotic destinations and expeditions.

“[These are] people who love to travel, don’t want to be responsible for any type of home maintenance, want to ditch the car, are healthy, and are comfortable living with an ever-changing ‘neighbourhood’,” says Jan Cullinane, Florida-based author of The New Retirement: The Ultimate Guide to the Rest of Your Life.

Read full article here:

http://www.bbc.com/capital/story/20161201-meet-the-people-whove-retired-at-sea

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Posted by on Dec 5, 2016 in Boomers, Interesting Houses, Jim's Take on the Market | 0 comments

Effects of Prop 13 on Selling Your Home

The low-inventory conditions have several contributing factors, one of which is the Prop 13 cap on property taxes.  The long-time owners sure don’t want to pay what would be much-higher taxes if they move up, thus the turnover has slowed considerably:

fig1

Moving down, price-wise, to keep your old tax basis isn’t easy either.  Though this graph shows that twice as many people would move if they could take their tax benefits with them, it’s not enough to get older people to sell.  By the time you are 65, the chance of you selling is less than 4%, and that’s with the tax benefits transferring:

fig2

Move before you get old!

Here is the big concern – how many younger folks are coming up that are ready, willing, and able to buy your house for what you think it is worth today?

Your house comes with a stifling property-tax bill, and fewer are going for it:

fig3

The residual effects of prop 13, combined with the high federal and state income taxes paid on the profit above $500,000 will cause fewer and fewer long-timers to want to sell.  Eventually, it means the inventory will be stocked with estate sales and sellers who NEED to sell.

The full report on Prop 13 is here:

http://lao.ca.gov/Publications/Report/3497

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Posted by on Sep 19, 2016 in Boomer Liquidations, Boomers, Inventory, Jim's Take on the Market | 12 comments