As people age and get ready to downsize, our research shows they want modern appointments inside their homes and amenities within their communities. This contributes to a higher price tag despite lower square footage.
Chicago, IL (PRWEB) July 14, 2016
Does a smaller home come with a smaller price tag? Not necessarily, according to a new survey of more than 2,500 adults 55 or older. The National Housing Survey was conducted by 55places.com and included 55+ adults from across the country.
More than 75 percent of respondents expect to pay either the same or more than the market value of their current homes when purchasing something new. This is despite the fact that downsizing was ranked as one of the top reasons to move 36.4 percent of the time. Lowering their cost of living was chosen nearly 40 percent and decreasing their taxes was selected 25 percent. Only 115 respondents stated that increasing the size of their home was a reason to move.
“While buying a smaller home that is just as expensive as the one they live in now may seem contradictory, it actually makes perfect sense,” said Bill Ness, founder and chief executive officer for 55places.com. “As people age and get ready to downsize, our research shows they want modern appointments inside their homes and amenities within their communities. This contributes to a higher price tag despite lower square footage.”
55places.com is the most comprehensive online tool for active adult home shopping and buying. The website showcases real estate, facts, descriptions, and photos of 55+ neighborhoods nationwide.
Even though they are downsizing, more than half of the nearly 2,000 respondents who indicated a potential to purchase said they would take out a mortgage—with 46.5 percent preferring a fixed-rate, 2.37 percent an adjustable rate, and only 1.75 percent a reverse mortgage. The other respondents intend to pay cash.
“Older owners tend to have substantial equity built up, which allows them to forego financing all together,” said Ness. “Those who do take out a mortgage lean toward the stability of a fixed-rate plan. With rates so low, it’s hard to find a more affordable option.”
Housing is still the biggest expense for 18.25 percent of active adults, according to the 55places.com National Housing Survey, narrowly beating out vacations and travel at 18.02 percent and health care at 15.77 percent. When asked, “Which of the below expenses do you plan to spend the most of your money on during retirement?” 14.71 percent replied recreation and hobbies, 13.85 percent dining and culture, 5.04 percent caring for family, 4.76 percent daily transportation, 4.67 percent memberships such as golf, gym, shopping, etc., and 3.25 percent gifts. Of the 1.6 percent “other” responses, pets, charity and daily living expenses were mentioned frequently.
“We definitely see 55+ adults willing to pay for activities they enjoy,” said Ness. “Combine vacations and travel, recreation and hobbies, and dining and culture, and that’s nearly half of where older Americans spend their dollars.”
To maintain their lifestyles, the majority of 55+ homeowners rely on multiple sources of income, according to survey results. When asked their source of income, only 13.1% said salary, indicating that the majority of respondents are retired. Social security was a source of income for 28.13 percent of 55+ adults. Investment income also was common with 20.75 percent using their pensions, 18.14 percent their IRAs or other retirement savings, 12.16 percent their 401K plans, and 7.72% annuities.
“Whether financing or paying cash, 55+ homeowners find housing continues to be a major expense as they age,” said Ness. “They are willing to pay to live in the community they choose and participate in activities they enjoy—even if it means relying on multiple sources of income to do so.”
55places.com’s National Housing Survey was conducted in Q2 2016. Understanding the needs and preferences of 55+ homeowners is nothing new for the 55places.com team, who have decades of experience and have compiled a wealth of data about active adult communities through the 55places.com website.
55places.com is a national online resource where people can find, research and compare 55-plus and active adult communities across the country. In addition to listing homes for sale, 55places.com connects interested homebuyers with handpicked partner agents who are local real estate experts to complete the purchase.
For more information on 55+ housing trends at the state, region and national level, contact Bill Ness at (773) 278-5500.