Changing Housing Needs As We Grow Older

 What I discovered in caring for my 87 year old mother when she moved into a senior living community was that over time, services and security or feeling safe were far more important than space.  Initially, when my mother moved in to a very nice senior community, she had a larger one bedroom apartment while she was pretty much in independent living for the first 3 years of the 7 she lived in the senior community.  Once she needed more care, which added monthly expense, it became pretty obvious that it was time to downsize her apartment to a smaller one bedroom so we could buy her more care.  

During the last year of her life at about 93, we downsized her again to a much smaller apartment because at that point she needed around the clock care with staff right outside her door rather than the larger apartment.  Fortunately, we were able to do all of this within the same senior community that offered independent living, various stages of assisted living and memory care.  Of course, more care came with much higher monthly fees. 

As we all grow older and even before the need to move into a senior community, the odds are pretty good that many people over the age of 55 are probably living in a lot more space than they really need.  Certainly, once the kids move out and couples become empty nesters, it may be time to downsize to a home that meets current needs.  That may mean fewer bedrooms and maybe a great room instead of both a living room and family room.  And, just maybe at that point, the need for a formal dining room no longer exists.  The trend is moving away from formal living to a more open concept that combines space. 

It could be too that in planning for retirement cutting housing expenses long before age 65 is logical for typical working people.  Clearly none of this matters much for the rich that have more than enough money to last them to age 90 or older; but to most people, it could be necessary to stretch savings to cover additional medical and other expenses that will occur as we all grow older. 

At Paragon, we assist clients with selling and buying homes through all the stages of life.  We understand that needs change as we grow older.  What made sense at 40 years old may not make any sense at 55 years old.  Ultimately, it is about living a great life to the very end.  Housing decisions are important to making this happen.    

Beware Pocket Or Whisper Real Estate Listings

 Since we have a very hot real estate market in many parts of the country, in some cases real estate agents are not even putting listings on the MLS, the multiple list service and or they are not even listing the property for sale.  In essence, they are hoarding sellers in an attempt to get both sides of the sale to increase their commission income.  There is nothing illegal about doing this; but once a property is officially for sale as a listing, it really should be put on the MLS to get maximum exposure.  

In some cases a real estate agent may know of someone that might be interested in selling the property at the right price; but is not actively looking to sell the property for the moment.  In that situation, if an agent brings a buyer to the table without listing the property at all, there is nothing illegitimate about that transaction.  Of course, the commission will be subject to negotiation when that happens.  It is not likely that a seller will pay a full commission in that quick sale scenario. 

Greed is obviously at play in Pocket or Whisper listing.  The real estate agent is attempting to keep a great home that will sell quickly off the market even though it may have officially been listed.  Sometimes, the real estate agent will wait a week or two before putting it on the MLS to work with any potential buyers that they know of.  Again, nothing illegal; but in this market where listing sometimes get multiple offers above the list price; not listing on the MLS would prevent a bidding war, which is not in the best interest of the seller.  In any case, real estate agents often get creative to maximize their commission earnings, which is all fine provided they abide by the law.  

At Paragon, we work clients to sell and buy homes all over the country.  When selling a home, we work to get our clients the highest price possible so we would insist that the property after listing be placed on the MLS because we know that competition is the best way to get the highest price.  

Preparing For A Natural Disaster

If you live in an area prone to forest fires, hurricanes, tornadoes, or floods as many do, are you prepared if you need to evacuate and or be without electricity for days or weeks.   Since we live in an area that has forest fires and earthquakes, we have had to evacuate more than once.  And, we have been without electricity for a number of days and it is not fun.  If you think it will never happen to you, think again. 

When growing up, we lived through the Sylmar and Northridge earthquakes in California and they were both devastating.  Matter of fact the apartment building I lived in while going to university completely collapsed as did many buildings on my university campus.  We have had to evacuate three times for fires that burned right up to our homes in three different locations and two states; California and Nevada.  In another case, we were visiting our son and family in Dallas when the tornado sirens went off, which required moving to the middle of the house, since they have no basement.  It was pretty scary.  

If the day comes when you have to evacuate, you better know what you are going to take with you because you will not have much time to react.  So, things like important documents should all be in one place.  Family photographs that may be irreplaceable should be in one big box.  If you own valuable jewelry or art that you can be put in an SUV or car get ready to take it with you.  And by the way, take all cars, since if your home burns down the last thing you need is your cars lost too.  Clothing can all be replaced; but you will need enough things to get you by for a week or two.  

If you plan to stay in your home after the natural disaster occurs, there is a pretty good chance that you may not have drinking water so having several gallons of bottled water in storage is a good idea.  This also means that toilets may not be functional so staying in your home may be impossible.  And, if you own a generator make sure it is operating outside your home to avoid asphyxiation from the smoke it releases.  

Most important, if you live in an area where natural disaster frequently occur, you better make sure you have insurance to cover the complete destruction of your home.  Regular home insurance does not cover floods or earthquakes.  You must buy specific insurance to cover damage from those events.  And, make sure you have enough coverage to rebuild your home.  It is a good idea to meet with your insurance agent every few years to determine if your coverage is currently sufficient to cover building cost.  We see terrible things happen in various areas of the country and we assume it could never happen to us.  Well think again because natural disasters can impact anyone.   

Real Estate Values & Public Schools

 90% of children in the United States attend public schools.  10% attend private or non-government controlled charter schools.  Generally, areas with the best public schools and or neighborhood schools tend to have the highest home values.  So, when searching for a home even if you don't have children, it is a good idea to buy in an area with a great school district, or at least great neighborhood schools that would service the area where the home is located even you don't have children.  One day you may choose to sell that home and so though you will pay more to be in a good school district,  resale value will also be higher because many people shop school districts.  

The good news is that there is lots of information on the Internet related to public schools.  You can check out the Great Schools Rating for the school district, or even individual schools.  If the rating is below 8 out of 10, it means that the particular school may have some issues that cause a lower score.  It may be a good reason to buy in another area.  

We could see public schools become even more important in the future because there is talk in Congress of funding pre-school for children as young as 3 years old.  If that happens, local public schools could end up with more children attending them.  

Public Schools have become controversial as of late.  Some school districts are making curriculum decisions that are opposed by parents.  We are seeing parents show up at school board meetings in some cases for the first time to voice their opinions.  That is a good thing.  However,  you should be aware of what is happening in your local school district before you make a buy decision to be sure you agree with whatever curriculum design is being proposed.   Because of all of this, there is a movement to allow for School Choice so that parents have more say as to the schools their children attend.  That is a good thing.  Parent should have options.  In any case, real estate values are directly tied to public schools in the area.  Before buying a home, do your homework. 

Understanding All The Rules That Drive Real Estate Values

 In every real estate class, the question is always posed, "What Are The Three Most Important Elements of Real Estate Value"?   And, the answer is always, Location, Location, Location.  And, while it is absolutely true that location is critical, there are also other rules that are just as important as follows:

1. If you buy crap, you will own crap.  

2. There are no bargains in real estate.

3. Buying in a great school district is critical.

4. Real Estate always go to it highest and best use.

5. Land values drive total value.

6. Once real estate becomes a non performing asset, it is time for redevelopment.

7. Crazy government regulations result in higher home prices.  

8. If it is cheaper to own a home in terms of the payment than renting, it is time to buy.

Each of these rules have their own reasoning.  Buying a home on a busy street, too near commercial property, or in view of power lines will be cheaper, but you will be buying crap.  If the home is cheaper than surrounding homes, it is because it has a fatal flaw.  Good schools matter and add to value.  So even if you don't have children buying in a good school district is all about resale value.  Eventually, when land values are very high, it is probable that higher density housing will be built on the land because single family homes are no longer practical.  Very old homes that become tear downs happen when it is cheaper to tear down the home than repair it.  In those cases, you are really just buying the land.  Some cities, counties and states have crazy regulations that significantly add to the cost of building a new home driving up prices.  And, finally today with mortgage interest rates so low, it may be cheaper to own than to rent.  

There are many rules related to real estate value beyond just location, location, location.  Understanding them all will help you get a better deal when buying or selling a home.  Paragon works with customers all over the country to sell and buy homes.  We understand all of these factors to help our customers get the best price when selling or buying.