Baby Boomers and the Fear of Selling
Are you a Baby Boomer? Do you realize it makes financial and lifestyle sense to sell your empty nest but are afraid of the consequences or are unsure of the next steps? That fear is quite normal, and you’re not alone. But having a professional on your side who can walk you through the selling process is key.
Maybe you’re thinking: “I want to sell my home, but what do I buy now?” or, “If I buy a replacement property, my property taxes will go up.” These are valid concerns. But fear not: in California, Prop 60 and Prop 90 protect home owners and sellers age 55 and up from property tax increases when sellers replace their primary residence.
According to the California State Board of Equalization, Propositions 60/90 allow a person who is over age 55 to sell his or her principal place of residence and transfer its base year value to a replacement dwelling of equal or lesser value that is purchased or newly constructed within two years of the sale.
But despite that knowledge, Baby Boomers are still largely resisting selling their homes to downsize.
For generations, the situation went something like this: the kids grew up and moved out of the family home and Mom and Dad put a For Sale sign up on the lawn not long after. This isn’t always the case anymore, with the traditional empty nest storyline taking a backseat to the decision to remain in the family home and age in place, says CNBC.
Why They’re Not Selling
Baby Boomers have to live somewhere but they’re having an increasingly tough time downsizing and locating an available inventory. This is causing disruption – a stop-gap if you will — in the normal “move-up” market.
The oldest Baby Boomers are now in their early 70s, an age that used to spur the desire to downsize into a retirement community, condo or apartment. It doesn’t have that same effect anymore due in large part to the fact that Boomers are simply healthier and working longer than any other generation. Translation: They’re not quite ready to trade in their family homes for the Del Boca Vista retirement life in Southern Florida.
Others aren’t eager to sell because that means they have to leap into the home buyers’ market, which is stifled by low inventory and high prices at the moment, points out CBS News.
This is a tough pill to swallow in real estate circles because Americans over the age of 65 have the highest homeownership rates of any generation, with nearly 80 percent of seniors owning their homes, compared with 35 percent of Americans who are under 35.
Americans over 65 will be the fastest-growing segment of the workforce over the next six years, according to the Bureau of Labor Statistics. While the overall workforce will increase five percent during that time, people aged 65 to 74 will grow by a whopping 55 percent.
Many Baby Boomers are still working, precluding them from leaving their homes too soon. The BLS says that 9.8 million Americans over the age of 65 are still working, the highest number since 1948. In fact, older workers have been staying put in the workforce in greater numbers since the 1990s, ensuring that the prospect of retirement today is very different than it was even a generation ago.
Three decades ago, when people retired, it meant they were nearing the end of their lives as they approached 70. People are generally stronger, healthier and more fit today than their parents were. And with the life expectancy close to 80, Baby Boomers are aware they have more time to work and save before finally settling down and retiring.
Many Baby Boomers in fact do want to sell their large homes and downsize so they can start to enjoy life and travel. But what’s holding them back? They’re unsure of the process, where to start, and who to trust. They don’t want the disruption in their lives that comes with selling, yet they know downsizing is something they will need to do at some point. Perhaps they’re reluctant to let go of the home in which they had their children, built a family and made memories. They may not know what they would do with all their stuff, or where family gatherings would be held if they were to eliminate the family home.
All of these are valid concerns. Addressing them one by one is important so as to get over that fear of selling. It’s time to redefine what living means to you!
Contact Agent Prolific
If you are a Baby Boomer and are ready to face your fear of selling your home and downsizing, let us help you every step of the way. Please contact us in San Diego by phone or complete our online form.