Troubles in the housing market have certainly wrought havoc throughout the economy. There may be a silver lining, though, for retirees (or those planning on retiring soon) who want to buy a retirement home, especially in the popular retirement hot spots like Palm Beach, FL and Hilton Head, SC.
According to a recent issue of Smart Money, “The National Association of Realtor’s Housing Affordability Index, which looks at home prices and interest rates to determine how cost-friendly homes are, shows that 2010 was the best year on record to buy a home since the NAR began compiling data in 1970. And 2011 is projected to be the third most affordable year. In many retirement hotspots, this is particularly true.”
It’s not the best time for everyone, since would-be buyers are also would-be sellers, but if you’ve got no mortgage or only a small one on your primary home and can afford the down payment you just might want to get your retirement home sooner rather than later. Here are a few tips to keep in mind:
Think long-term. Remember, the housing market is still unstable. Don’t buy planning on reselling right away. This is a buy-and-hold market, not a flipper’s market.
Timing matters. Housing prices in retirement / vacation venues can fluctuate dramatically throughout the year, depending on the season. Just like summer swimwear, you’ll want to buy at the beginning of the off-season, when inventories are still high, but prices are on the decline.
Know your market. Some markets offer better deals than others. Hard-hit markets like Las Vegas, Phoenix and some areas of Florida experienced high foreclosure rates – and you will have more time to find a suitable low-priced home in those markets. Other areas, like Hawaii and Cape Cod did not have such extreme conditions. Good buys in those markets will be harder to come by, and are not likely to stay on the market for long. Be ready to jump on a good deal if you are searching for a retirement home in a stronger market.