New data suggests a third of homes across America are being paid for in cash – Downsizing your home may be a good option for you.
A report from Redfin says its latest data reveals 33.4%of deals were conducted with buyers who didn’t need a bank loan – that’s the highest level recorded for almost a decade.
As an experienced local agent, I believe the percentages are also swinging in favor of cash payments because many buyers needing loans are not moving until mortgage costs fall.
The good news on that front is America’s inflation continues to taper down. It’s now sitting at 4.05% after peaking at 9.1% 13 months ago. Mortgage rates stand in the vicinity of 7.5% if you have a Loan-to-Value Ratio (LVR) of 60% or more.
Many folks who’ve retired or are approaching the end of their working days may have an excellent opportunity to cash out in the current market. Downsizing can allow you to sell, pay off any residual mortgage, buy a smaller home in cash and still have money in the bank.
If your senior years are just around the corner and you still have a loan, the option to downsize could be a smart play to offset the impact of rising rates.
If this is your headspace, you’re not alone. The US Alliance for Aging Research says 71 million people will be 65+ by 2030, with another 33 million aged 75 or over.
Six tips for downsizing your home in today’s market
New chapter – Downsizing is an opportunity to simplify your life and create a more efficient living environment that aligns with your current lifestyle needs and aspirations.
Your priorities – Evaluate your lifestyle and how it might change as you age. What are the features of a home that are essential for you? Consider factors such as location, proximity to amenities and the number of rooms you really need.
Money question – Downsizing is a huge decision, so talk to your professional financial adviser before making any decisions as well as your tax advisor. By selling your current home, you want to achieve the financial goals you’ve set for retirement.
Best property – Successful downsizing depends so much on choosing the right property. Having a secure home is a great play if you want to travel. Apartments and condos are popular choices for would-be travelers.
Use every inch – Focus on floor plans that use every square foot. Downsizers often find it hard to adjust to smaller living areas, so knowing you’ve bought a place with no “dead-space” can be a comfort.
Possessions purge – You’ll likely have to downsize your possessions and furniture. This can be hard, of course. Offer items to family and friends so you know they’re going to good homes, or donate to a charity.
And if I can help you sell your current property and find your next home, please do not hesitate to contact me.
