The Home Guru: Housing Issues for Older Citizens

Recently I was invited to speak before a group of retired municipal workers, and as I planned my remarks, I thought about the realty that I’m at an age when some people think about retiring and living differently than they do now.  As for me, I intend never to retire from the enjoyable work I do unless I absolutely must. Nevertheless my living preferences have changed significantly in the past few years, just as if I were retiring.

When I was still in my 20s and my wife and I moved to the historic home we still occupy, I was eager and ready to restore and maintain it.  I was known as the “young guy” on the block who always answered the door with a hammer or paint brush in hand. Today, very honestly, I’d rather be doing something other than hammering and painting.

The housing issues facing retired and elderly people can be quite simple, such as finding living space on one level with no steps, and at the same time, they can be quite complex, such as facing the fact that their nest egg for retirement, their home, may have dropped 20 to 30 percent in value in the last five years.

Many older people are still in the homes in which they raised their children, married them off, and then retired as empty-nesters, and these homes may have become too big to rattle around in or maintain, and the tax bill that paid primarily for the education of their children no longer has the same payback.

But they may still want to remain in those homes, no matter how impractical. Interestingly, surveys by AARP find that about 80 percent of older persons say that they want to stay in their own homes and not move, and this phenomenon has been called the preference to “age in place.” It’s understandable.  After a long period of living in one place, our homes become an extension of who we are and how we express ourselves. Long time residence is also a connection to the community where people know their neighbors and merchants as well as their houses of worship, libraries and community service.

For a long stretch, our homes were our principal financial asset, but today, home owners may find themselves breaking even or, a worse state of affairs, they may be “underwater” when they sell if they have taken equity loans against the value of their homes. But what many are losing on the sell side, they can make up on the buy side, especially for those who are planning a move south where housing is much cheaper, as are living expenses.

Others who have paid off their mortgages and have equity can take reverse mortgages to stay put and live more comfortably through their golden years.

Those who decide to downsize still must think carefully about the percentage of income they should be paying for housing and still manage to afford other necessities of later life besides food and clothing, such as transportation and medical care.  Affordability depends on their individual situations and whether they live with a spouse, alone or with relatives.  Today, about 54 percent of older persons live with their spouses, 31 percent live alone, 13 percent live with relatives other than their spouse, and 2 percent live with non-relatives.

If the decision is to move later in life, people seem to know what they want. A survey done by the National Association of Realtors in concert with MetLife in late 2009 found that retired and older citizens want easy, comfortable homes, with single-story floor plans or homes that offer a first-floor master bedroom. They also like home maintenance and repair as part of their next home purchase, preferable with no necessary outside duties and low maintenance inside, washers and dryers, storage space, easy-to-open windows and easy to use climate controls. 

There are other quality of life considerations, such as proximity to hospitals and doctors, shopping, transportation and recreation.

For a couple of years after the bubble burst, there were still many sellers holding on to old pricing ideas, hoping to find a buyer who would pay what the owner felt the home was worth. In the past year in particular, more homeowners are resigned to pricing their homes where they will sell, and those homes are being purchased by young couples or single individuals buying their first homes at bargain prices and low mortgage interest rates. And, if the homes need work, these young people may just be answering their doors with hammers or paint brushes in hand.

Interestingly, my daughter recently informed me that she and my son-in-law have discussed the eventuality of my wife and I living with them when the time comes.  I was greatly touched, even though I’m sure we would rather remain independent as long as we can and to seek at-home care should we need it. And while the sentiment expressed by my daughter is lovely, I do wish she had waited another 15 or 20 years before discussing the matter with me!

Bill Primavera is a Realtor® affiliated with Coldwell Banker and a marketing practitioner who writes regularly as The Home Guru. For questions or comments about the housing market, or to buy or sell a home, he can be reached directly at 914-522-2076.