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One of my "problems" is that I love my New England setting near the Berkshires, but property taxes around here are always threatening to increase (as everywhere) and my particular property is hard to maintain. (the house, like Brightdoglover's, is 1200 sq ft and perfect for me). When I first thought of moving 5 yrs ago, it was going to be to a place with low taxes, warmer winters, and a simple yard. First two above: NOT New England!
Since my investigations began I have become much, much more appreciative of where I am. There are so many amenities here that I llove and depend on. If I could sell and buy a lesser house on a smaller piece of property around here, I would do that. But...what I can get ($) for my house now will not buy me anything as nice in this state (unless I go to a nearby city where the houses are nice but the crime is high and taxes outrageous). I don't want to be forced into a mortgage or into a fixer upper (that's what this house has been---a fixer upper that's finally fixed up).
I guess the saying is not wanting to 'jump from the frying pan into the fire.'
Now I face winter again...missed the opp to try to sell this year. I wonder, with all the dire reports about how in crisis the state economies are, what it will be like in the spring. I doubt the economy will be any better then.
Interesting post. What, in actual terms, would you gain by moving to New England (what would you have here that you don't have there)?
Several things:
1. Returning home. I was born in Boston, and lived in Boston (West Roxbury) until I was 14. At that point my father was transferred to DC, and I've lived in this area ever since (started a career, got married, started a family, and so on). And as much as I have come to appreciate the DC area, it has never been and never will be "home" to me.
2. Returning to family. One sister is retired and still living in Mass - never left, and never will. My other sister is also retired and living in Vermont. I have lived away from them for over 40 years, and that's something I regret very much.
3. I love New England. More importantly, my wife loves New England. I like the weather, the people, the culture, the food, the geography, the history, the architecture ... darn near everything.
As far as tangible differences, we'd be able to buy a house without any difficulty - we both have good federal pensions. It would probably be a smaller house, and that's what we'd like anyway, with a bit more land, and that's what we want as well. We're still young (58) and in good health, and that makes it a bit easier to handle harsher winters.
As Thomas Wolfe said, you can't go home again. And while I know it won't be the New England of my youth, I think you can go home again as long as you are prepared for the inevitable changes ... in yourself as well as in the area.
Will it happen for me? I don't know. Right now, things are much better than I anticipated staying in place.
Last December we had a property on the market. It's mortgage principle was around $120k, it's assessed value was $150k, and it's annual taxes have been around $5k.
The highest offer we got was $35k; a little more than 1/3 of the principle, close to 1/4 of the assessed value.
How many years do you hold on to such a property?
Every year you pay taxes on it. After a few years you would have paid so much in taxes as to equal the selling price.
In 2008 my mother and step-father passed away. They had two homes in California: one down in the valley that was a share-holder in a private gated block 'park' with swimming pool and tennis court. Their second home was up in the mountains, a 5bdrm 'cabin'. Together the estate is still being liquidated, though it looks like what will come out of it will be less then 4 years of taxes.
We have a dear friend who inherited a property in NJ. It's property taxes are killing her. It's current market value is a tiny percentage of it's assessed value [and what she insists it is 'worth']. She clearly wants to get from it, it's 'worth', but the property taxes are more than she has.
How long do you hold onto a property?
Each year requires that you continue paying taxes, each year you must continue maintenance and repairs.
But if the market will only pay you the equivalent of 5 years worth of taxes; is it honestly worth holding on to for 5 years?
I do not see the market re-bounding any time soon.
I think I am going to make up my mind to stay in Pennsylvania and stop stressing over trying to find that perfect retirement spot. In the end, you can move and make a big change only to find out you are not happy anyway. For some a big change works out great. For the rest of us maybe we can find happiness in our own back yard with a few lifestyle changes instead.
I agree with you on this point, in an economy such as our current situation, perhaps the best thing for many folks to do is determine if they can be content in retiring where they currently reside.
What is the mortgage rate now, and how low can it go?
For those who do not have a mortgage, what is your feeling?
I've been on the fence as to whether to sell or to hang on to my home as a rental. I don't see a full recovery in the market coming anytime in the next 15-20 years from its "boom" highs. I'm waiting to see what happens in November and how that reflects on tax rates. If it becomes as unfavorable to be a landlord as Obama once indicated he would tax rental properties, then I'll probably dump it and take whatever I can. I've had full equity in my home for more than 10 yrs and so selling it at rock bottom is an option.
I agree with you on this point, in an economy such as our current situation, perhaps the best thing for many folks to do is determine if they can be content in retiring where they currently reside.
The nice part about retiring in your present community is that you have friends and family already there. And that's worth a LOT. Making new friends at age 60 and beyond is not easy--no kids to grease the way...
Last December we had a property on the market. It's mortgage principle was around $120k, it's assessed value was $150k, and it's annual taxes have been around $5k.
The highest offer we got was $35k; a little more than 1/3 of the principle, close to 1/4 of the assessed value.
How many years do you hold on to such a property?
Every year you pay taxes on it. After a few years you would have paid so much in taxes as to equal the selling price.
In 2008 my mother and step-father passed away. They had two homes in California: one down in the valley that was a share-holder in a private gated block 'park' with swimming pool and tennis court. Their second home was up in the mountains, a 5bdrm 'cabin'. Together the estate is still being liquidated, though it looks like what will come out of it will be less then 4 years of taxes.
We have a dear friend who inherited a property in NJ. It's property taxes are killing her. It's current market value is a tiny percentage of it's assessed value [and what she insists it is 'worth']. She clearly wants to get from it, it's 'worth', but the property taxes are more than she has.
How long do you hold onto a property?
Each year requires that you continue paying taxes, each year you must continue maintenance and repairs.
But if the market will only pay you the equivalent of 5 years worth of taxes; is it honestly worth holding on to for 5 years?
I do not see the market re-bounding any time soon.
It is AWFUL to have to contemplate nearly giving away a property just to get out from under it. This is, quite frankly, what I personally feel boomers are facing and will face even more within the next ten years. Is it better not to sell, but to rent out your property, for many years? Then, you have the problem of being an absentee landlord, paying for someone to do the fixings, having to carry more house insurance, having to worry about someone smoking in the house or using the wood stove incorrectly, or ruining your hardwood floors or partying till the place falls down. And, you still haven't liquidated that property for the cash you want.
Maybe the only other thing is to move away and leave the house empty, take a reverse mortgage on it for many years and let it sit (minimally heated). What about that idea?
I am big on not having "the complication factor." I'd rather sell a place and take a hit if necessary than have it hanging around causing complications. (This is why I am not a landlord and have decided never to buy another property).
Sometimes you just have to take the hit. If you're up there in age, it seems to me unpleasant to spend one's younger/healthier years not doing what you want strictly because you don't want to take the hit on a housing sale. That's just me, not a judgment on anyone else. I took the hit twice when younger just to get away from complications (a condo in Cambridge, a modest house in SW Colorado). Just wanted to get out from under, from the lawyer's fees (Cambridge) and the tenant/damage/infrastructure long-distance I had in Colorado.
I don't see the housing market "coming back." It was out in outer space, and some people might have had the bad fortune/choice to buy high. Those years were the aberration, not the current downturns. "Coming back" to another bubble? Unlikely, and certainly not soon. It will stabilize. It will stabilize high in some areas (areas that were always already high). It will stabilize differently elsewhere. It will not go up. The numbers and demographics just aren't there.
As someone who remembers the days of double-digit interest rates (and whose first property was 9.75 percent interest), the days of such low interest rates are at bottom, pretty much. Now, they are unlikely to zoom up, but there is only one way to go, and that IS up. My very small understanding of major finance/deficits/etc. is that they will go up at some point, so any increase in house selling price might well be mitigated by an increase in interest. Plus, potential buyers will be affected by both increases.
The market has been way too high for years (related to income, etc.) It's overall good that it ended. A lot of people got caught in the change and the change in the way of thinking.
I wouldn't put off my plans or dreams even if it meant taking a hit, assuming I could manage with the hit.
Mnay boomer tho are lukier than the new owner. Even if they sell how they will come out with a substantail profit compared to what they paid. if you bought in the last decade you might take a huge losss. Its not so much the apreaised vlue as thyat can go up or down.but hwat you paid esepcailly considering what you might hae piad in rent otherwise. But its not the huge investment profits of not long ago.Besides the original qustion is for those who want to move ;not whether they want to or not.Even if I sold now at present pirces I would make a huge profit besides the usage I got out of it in the years I have owned.But I agree thyat unrented retal property is expensive to hold on to.But where I live rental peroperty especailly residences is at a premiimum i this econmy when so mnay are being thrown inot the market because of not being able to qaulfiy for financing now and thsoe that are hunkered down on buying.
It is AWFUL to have to contemplate nearly giving away a property just to get out from under it. This is, quite frankly, what I personally feel boomers are facing and will face even more within the next ten years. Is it better not to sell, but to rent out your property, for many years? Then, you have the problem of being an absentee landlord, paying for someone to do the fixings, having to carry more house insurance, having to worry about someone smoking in the house or using the wood stove incorrectly, or ruining your hardwood floors or partying till the place falls down. And, you still haven't liquidated that property for the cash you want.
Maybe the only other thing is to move away and leave the house empty, take a reverse mortgage on it for many years and let it sit (minimally heated). What about that idea?
You must live in the house in order to take a reverse mortgage. You can use the proceeds from a reverse mortgage to buy a " vacation home" however.
If you can work it out , I think that is not a bad way to go. I am considering a reverse mortgage on my new build this winter when I am done with it.... For a lot of people in retirement , they do not qualify for a conventional mortgage , due to the income requirements.... A reverse maybe the only way to get that second home for most people. And with the values being so low ( including few qualified buyers) , ...its something to think about.
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I like the weather, the people, the culture, the food, the geography, the history, the architecture ... darn near everything.
Staying Put
