About 10,000 Americans retire every day. Many own their home and are planning to downsize or move, but feel they should wait now that real estate markets have dipped off highs that surged between 2020 and 2022 in many areas.
Here are some reasons why selling now might make sense:
- Liquidating a home now when all the markets are down - including equity markets - allows you to buy replacement investments at lower prices with a stronger potential upside, including equities.
- Liquidating your home now allows you to earn more for your cash deposits, which produce much higher returns. Even a basic savings account delivers over 3%.
- Holding on to a large expensive home has to carry costs: insurance, maintenance, repairs, electricity, gas, mortgage payments, and real estate tax payments. If markets recover in the next 2 years to where they were, will those gains outstrip the costs to carry this home?
- The lower the sale price, the lower your capital gains taxes too. Many who have owned their homes for many years may have large capital gains taxes beyond the $250k or $500k exemptions.
- In a down housing market with higher interest rates, job losses, and a recession looming, first-time home buyers are often more disadvantaged: the smaller homes that also appeal to retirees may be more affordable and attainable now than later when - not if - the economy bounces back with lowered interest rates.
- The 6th good reason to move on with plans, regardless of maximizing profits, is that TIME IS THE LAST LUXURY! you cannot buy more time.