Retirement

AARP Boomer Housing Report

AARP does a good job covering housing choices for retirement living.

Visit their housing page here, and check out “Gimme Shelter”  a high-quality video report that covers it all:  Co-housing, aging in place “village” movement, interest-based retirement communities, and remodeling for the long run.

Happy New Year

Welcome to 2012!

Our real Seattle estate market ended 2011 on up note, with increased pending sales figures, and it seems 2012 will pick up where it left off. Interest rates remain below 4% and the post-holiday listing inventory is already starting to increase.

Are you resolved to get back into real estate in 2012?

Afordablilty continues to rank high, and in some areas condo payments are below rent. Also prices have seem to have  stabilized in many areas, making the prospect of buying a safer idea.

Here are are a couple of new-years related links. The first is the top 10 retirement articles from Top Retirements blog.  This blog is mostly focused on SE United States, but has great articles even if you are not considering that area.

The second is 12 Retirement Resolutions from US News for your financial planning needs.

Can you think of any  sources of articles on downsizing or retirement that other readers may enjoy, comment below or send me an email.

Here’s to to the best Health and Wealth for all of us in 2012!

Greg

Washington state ranked as the second best state to make a living

Washington state ranked as the second best state to make a living. If you want to make a living — in other words, make enough after tax and fixed expenses to prosper — your chances of getting a job that pays enough to live in comfort varies dramatically based on the state where you live and work. MoneyRates.com pulled unemployment rates, average wages, tax rates and cost of living from all 50 states and found that the best places to find a job were not necessarily the best places to make a living. MoneyRates rankings are based on their analysis of what you have left to spend, after adjusting for paying your state taxes and dealing with the comparative cost of buying groceries and keeping a roof over your head, among other things. MoneyRates noted that Washington state has a higher cost of living than the average, but so is the average wage and the state imposes no income tax. Adjusted average income is $41,456. Illinois was ranked as the first or best state to make a living, and Texas followed behind Washington.

Buy Local in Bellingham

This fascinating article about a community developing its local economy reminded me of Bellingham.

When I speak with downsizers one common question is “Where can I have a similar quality of life for less?” We Seattlites value our older, walkable, gentrified neighborhoods, our maritime climate and proximity to water for boating or the mountains for hiking.  We also enjoy the intellectual stimulation that comes from living in a city that attracts creative types, be they artists or entrepreneurs. So, in a way this question is hard to answer, because there is really NO place just like Seattle.

Bellingham, however is one place that comes close, and at an affordable cost. It offers similar neighborhoods of older homes and view properties, lots of water related activities (it’s very close to the San Juan Islands) and Mt. Baker and the North Cascades wilderness, and it offers the stimulation of a University town.  If you need to escape to a big city, Vancouver BC is a quick drive over the border, or you can hop on Amtrack for a weekend in Seattle.

In October, 2010, the median sales price in Whatcom Co. was $244,500 vs. $350,000 in King county.  Bellingham has it’s share of pricy luxury properties like Seattle, but also offers some very tempting values as well. Here are current Bellingham listings if  you would like to browse for yourself.  If you would like to contact a good agent in Belllingham, I know one, and would be happy to connect you.

SilverPlanet.com article on Senior Real Estate Specialists

SilverPlanet.com is a website with useful information on aging, housing, finance, health and lifestyles. I spent a few minutes looking at it and found many interesting articles. You can also take a look at their Facebook page.

Here is an article introducing Senior Real Estate Specialists and how they do business differently than traditional Realtors.  The most important distinction is that we look at the big picture of a downsize move, and help with decisions about different possibilities for a downsize, including aging in place, rental,  or purchase of a single home or condo.  We also look at the process as a longer one as there are many more important decisions to be made.

Boomers are buying homes to retire in

Most of the news we have seen is about how the echo-boomers are saving the housing market by buying their first home. Now we are seeing a trend of boomers buying their next home now, and taking advantage of lower prices, (especially in resort areas)  and dirt-cheap interest rates.

The strategies have changed, as the above article reports. In the anything-goes market of a few years ago, it was nothing to take a 2nd on y0ur primary residence and buy a transitional home. Now it takes a 2nd home mortgage and an actual down payment, along with professional management if it is out of town.

Another way is to buy your next home in an IRA using a special trust company. This gets a little complex, as the house is strictly an investment that you or relatives can’t live in while its in the IRA. However, when it’s time to retire and move in, the house is taken as a distribution from your IRA.

Downsize to Investment Property

Here’s one case where downsizing can mean buying a bigger property!

As I mentioned in 10 Ways to Downsize, owning and living in a small investment property is a strategy for combining a smaller living space, and an investment that kicks off a good rate of return, plus annual depreciation to keep your accountant happy! It also involves a much more stable and tangible asset thats under your control, unlike those foreign energy stocks you may be considering.

I just noticed a bunch of new small apartment building listings in fantastic locations come on the market today at some very good prices. Yes, Duplexes, triplexes and more-plexes are on sale too these days. Even more so, because they are much harder to finance than single family homes in the present market. This alone should lead to some instant equity when things get straightened out.

For more info on these properties contact me here or at 206-713-2921. I can send you info about the properties, and show you how to work with the financial data.

Aging in Place

The idea of aging in place seems to be everywhere these days. We boomers like our trends, and aging is place is a popular one right now.

Aging in place refers to staying in our homes as we age, instead of moving to a retirement home or complex, and later avoiding the assisted living and skilled nursing nightmares some of us have seen our parents go through. Partially due to the economic crisis which has eaten into our home equity as well as retirement accounts, the hunker down mentality is more prevalent.

The benefits of aging in place are not having to move, and being around familiar surroundings and friends, preserving as much as we can of our same lifestyle; along with saving the cost of a move, and having to begin paying rent.

Being able to age in place does require some adjustments, though. Chances are the house will have to be adapted so it is easier to use as capabalities change. This is known as universal design, and involves changes to counter heights, floor coverings, door openings, adding grab bars, etc. If there is not a bedroom and bath on the main level, a lift can be considered.

Another change is a need for a support network of friends, family and care givers who can help out with home maintenance, shopping, and transportation. Often children don’t live nearby, or are not available to help with these chores. A notable solution to this is a community based organization in Boston called Beacon Hill Village. It’s an organization of volunteers who help each other meet these needs for a reasonable cost, and also provides a strong sense of community. In fact, there is a similar organization starting in North East Seattle called NEST.

Hanging onto a larger older home can also make sense if you want to share it. It can be as easy as renting out rooms to friends (like the “Golden Girls”) or the house may lend itself  to converting a part of it to an accessory unit, or mother in law apartment. With the slow economy and foreclosures, families are sometimes moving into to the same house, either gown children boomeranging back home, or older parents or grandparents moving in with children.

A big question still is “where will we age in place”? Some people I talk to would never leave their home. Others like the concept of staying home as they age, but can’t see aging in their same house. Many feel their present home is way is too large, or will be too expensive to maintain in the future on a fixed income. Others also feel it is easier to find something else smaller nearby rather than to go through the remodeling process or finding roommates.

No matter where you live in the area, there is a good chance there is a suitable apartment, condo, or one-level home nearby that would work better.

These days, most real estate conversations go to the subject of values, and whether they are going up or down. The answer to that question is, of course, “both”. Some areas and housing types are holding their values pretty well, and others are still declining. Now, homes in desirable areas that are close to transportation and amenities are doing well if priced low enough. The larger homes in the outer areas seem to be harder to sell, and are declining in price far more.

Interestingly, this coincides with what both planners are planning, and builders are building. Our future growth will be smaller homes in existing redeveloped areas. Transportation is a very important factor. In my career, I have noticed that what planners plan and builders build is usually what goes up in value.

So, if you are concerned about values going forward, you may want to factor this in the equation. If you live close in, in a smaller house, aging in place in your present home may make sense, and turn out to be a good investment going forward. On the other hand, if you are thinking of moving, and are in a larger home on an outer area, a move may make more sense.

Jackson Place Co-Housing Visit

Co-housing is both a way of living and a  kind of housing. Co-housing is preferred by people who prefer to be part of a community with a high degree of interaction, interdependence, and cooperation. For many, their co-housing community is like an extended family. In cohousing, all members are expected to work together in managing the community and maintaining the common areas. Participation in community meals and activities is usually optional, but many find it a convenience that they couldn’t get anywhere else.

If you visit several co-housing communities you will find houses of all sizes and styles: large and small houses, condos, and townhouses.  The buildings are often clustered in one area, leaving another large are of open space to be shared by all members, similar to cottage communities or cluster developments.  In addition to common open space, there is also a common building or area for activities that members share, such as preparing and eating common meals, recreation areas, workshop, studio, or play areas. Buildings in co-housing communities tend to be greener, and built with more durable, longer-lasting materials, and are innovatively designed by their initial occupants.

Recently I visited a friend in Jackson Place, a large community close to downtown in Seattle. I was surprised at the diversity of ages of people living there. I think what surprised me the most was what an ideal place it is for families. When visiting, I entered into the courtyard that is surrounded by the structure and was struck by what a safe place this is for children to play in. Indeed, there are many families there, along with a good number of empty nesting singles and  couples.

The southern part of the complex is townhouse style units, whose back doors all opened to the common courtyard area. The back doors of the units entered to the kitchen area, which most of us consider to be the informal part of the house. It reminded me of my childhood, where friends visited each others’ homes in the back doors, and the front door was the formal entry, used more by more formal visitors who were not as close (or the Fuller Brush man). A 3+ bedroom townhouse unit I visited had a lower level with a formal entry on the street side. Also on the lower level was a room with a bathroom, that could be used as separate living quarters, and rented out. Another option could be a live-work situation, using the street entrance as an entrance for clients or customers. The main level was the living areas with a half bath, and the upper level had 2 more bedrooms plus a den area with a balcony. It seemed like a small space for a family of four, but cohousing spaces tend to be smaller, as a lot of life takes place in common areas.

The northern part of Jackson Place contains apartment style flats above the common areas. In the hallway was posted a cat-stitting schedule, where neighbors post when they will be gone, and other neighbors look after their cats. There was also the front entry lobby, which, of course, gets little use as an entrance because everyone enters from the back entrance! They are considering turning the lobby into a library.

What also struck me is that this complex is unique to any condo complex that I had ever visited, both from how it looked, and how it felt to be there. As my friend showed me around, more unique features came up, including the cat-sitting cooperative, a large workshop for projects, a very nice play area for kids including a tree house, and an on-site pea patch. Already, this has more and better amenities than almost any other condo complex. Then, there’s common dining  area and huge well-equipped kitchen, along with the system of assigning cooking or cleaning tasks for the members who partake in the community meals 3-4 days a week. It was explained to me that to participate, a member had to cook or clean only 3 times a month, nd contribute to the food, and in return could eat 12-16 meals there a week! The only downside it seems could be the amount of time it sometime takes to finish a meal that has turned into a conversation.

There are three communities in  Seattle, a couple in Bothell, Bellingham, and others on Whidbey, Vashon and Bainbridge Islands and in Port Townsend and Indianola near Polsbo. More are being planned. Starting a cohousing community is very labor intensive, according to those who have done it. As anyone who has built a house knows, there are easily over a million decisions involved in the process, and I am only exaggerating a little. Imagine the decisions in building a community with a group of people, using a  consensus decision making process! Apparently it is worth it.

Cohousing has been growing nationally. The best website to find out more is cohousing.org. A rapidly growing sub-group of cohousing is senior housing. The Elder Co-housing website tells more about that.

The local cohousing community is especially energized about the upcoming National Cohousing Conference they are hosting at the University of Washington this June 24-28.

There are two ways to live in co-housing, either get together with a group and found a community and participate in cohousing from the ground up, or buy into an existing one. As good a life as it is, usually units sell by word of mouth to people who are known to existing groups, and occasionally some do get listed on the MLS. For info on listed properties, contact Greg.

The Future: Big Picture

Glen Hiemstra is a futurist based out of Kirkland. Here is a video of an interview in which he talks about the future of Atlanta from a wide perspective. He could be talking about Seattle, or any other major American city. The formative factors are the environment, energy, technology and an aging population. Watch the video to see how he puts them all together. Applying what he said, Seattle seems to be progressing along in its own unique way in term of transportation and land use planning. The one piece that will be the most difficult to address is the need for affordable housing for aging boomers.

According to Hiemstra, most of the aging boomers will want to be near family. And family is……everywhere. Dwellings will need to be about half the size of what we are accustomed to, or 1200 to 2000 square feet, if they are condos they need to be accessable with as few steps as possible, in a walkable neighborhood, and close to accessable public transportation.

Being a north end resident all of my life, I can think of a few developments that hit all of the requirements that hit on all cylinders, and many more that hit on some. The ones that have it all are in neighborhoods that are walkable and have transportation right now, such as Ballard, Wallingford, Greenlake, Queen Anne. Outside of the older neighborhoods, other neighborhood have their local higher density areas of condos, some in areas that are walkable and others that are not. Then there are the recent planned larger developments with their own center of gravity like Point Edwards in Edmonds, and the mother of all transit oriented developments, Thornton Place at Northgate. There are also other areas that were built in the 1970′s for the leisure retired population like in the Sand Point area, that worked well for a car oriented culture, but come up short for safe, walkable, interesting neighborhoods.
Not surprisingly, the large newer developments are priced at high levels, and the older or smaller developments are are at more affordable levels. It will be interesting to see what buyers in our “reset” economy will be willing to pay.

Popular Conversion Tax Holiday has Ended

It used to be a tax loophole, now the loophole is closing. sometimes called a conversion, I am referring to the ability to avoid capital gains tax on an appreciated investment home or vacation property by converting it to a personal residence. Up until Congress started looking for sources of tax revenue to pay for last summer’s housing bill, you could buy an investment property, or 1031 exchange into one, have it increase in value, then move in to it. After living in it for 2 years, you could sell it as your residence, and use the regular exclusions of $250,000 of gain for a single person. or $500,000 of gain for a married couple, thus eliminating the capitol gains tax on the combined gain of all the propertes! But…now the party’s over.

From now on, you will owe capital gains tax on the total gain times the ratio of time it was an investment property or second home divided by total years of ownership. This tax on the period of time you occupied the home falls under the $250,000 and $500,000 exclusions. Here’s a Kipplinger article on the subject.

Multi-Generational Living, it’s Becoming a Trend

A trend that is often cited by urban planners is the shrinking household size. There are less of us living in each  home now for various reasons, therefore home size should shrink. This last year, average home square footage has inched downward for the first time.

However, there is a counter-trend of household size increasing due to more generations living together. Grandparents moving in with their children’s families is something  Realtors are seeing more and more of recently. It’s a trend we became aware of as more immigrants buy houses locally, as it is very common in other cultures worldwide. Now it is escalating out of economic necessity. As our economy constricts more of us rugged individualist Americans are realizing that all of that independence can get expensive. See an AARP article here with stories of families that moved together, and tips for making it work.

So, if you have a larger house to sell to downsize, do not fear! Demand is slowly rising again. Or, you may want to move the kids in….and the grandkids too!

Some types of  houses lend themselves better to accommodating multiple generations. For many families, having more than one kitchen makes a huge difference.

To add a separate living unit, nothing beats the Seattle area’s seemingly endless supply of basement ramblers and split entrys! These were built in north and south parts of Seattle and Bellevue, and the close-in suburbs from the 1950′s thru the 1970′s. They are also the cheapest to buy per square foot. They usually have 3 bedrooms and 1 or 2 bathrooms on the main level, and most already have bathrooms in the lower level, and adding another kitchen there is usually pretty easy.   If you do remodel, be sure to visit your city planning office and get the necessary permits. While you are there, ask if you can make your extra unit a legal accessory unit, (MIL) as this will add value at resale time. In some areas you may be able to make it a legal duplex, which is even better.

Another approach is to finish an attached garage. Again, check with your local planning and building dept first, as they may want to know where the cars are going to park.

Sometimes you can be lucky and find a property with 2 houses on it already. These are rare, but we do see them. Seattle has a provision to add detached accesory units in some parts of the city. This could be new construction, or possibly a garage conversion.\

Update: msnbc report 3/12/09

AARP Livable Communities Awards

Admitting that you are maybe finally beginning to get “up there” is not easy. However, I find myself running into AARP more often these days in housing issues. So, the last time their membership offer came in the mail, I sent it in. It’s the best $12 I ever spent! I cold go on about all the benefits, but I won’t bore you.

What is fascinating is what AARP has been doing lately in housing research. A recent survey they comissioned showed that of boomers who expect to move for retirement, (21%),  59% will look for a home that’s all on one level, 49% will look for a smaller home, and 50% will look for a newer home.

Their Livable Communities Awards, co-sponsored with the NAHB, shows the detail they get into when working with what makes our homes and communities livable. Go here to see more. By the way, one of the award winners was Vineyard Lane on Bainbridge Island!

New Retirement Strategies for After the Crash

After the financial challenges our economy has had, we are all, working or retired, facing new challenges. If you are retired now, it can be more challenging with less resources.

I read this article today at RIS Media about 4 possible solutions.

1. Revisit your budget, and see if other assets can be better utilized to generate income.

2. Get a reverse mortgage. Most people know about these, in which the lender pays you your home’s equity in return for access to the proceeds of your home’s sale after you no longer need it. What many people don’t realize is that you can downsize and buy your next home with a reverse mortgage!

3. Get a life settlement from your life insurance policy. You can get a lump sum now for your life insurance policy that is greater then its surrender value. See your financial planner for details on this.

4. Adjust your Social Security. If you are drawing Social Security now, it may be possible to discontinue, and start again later when you will receive a higher payment.

Again, for more information, see the info and links at the article here.

Bothell Proceeding with Revitalization Despite Economy

The city of Bothell seems to be surviving the economic slowdown, and is proceeding with its downtown revitalization, including the relocation of two highways. Its strong technology employment base, along with the presence of the UW branch campus. Some projects are done now, and several others are planned. It will be an exciting place to live, and a good place to invest now. Times article.

Bothell’s location has been favored by families who work on both the East Side and Seattle, and the downtown offers both a small-town main-street type atmosphere, and the Bothell landing park along the river is a pleasant place to spend a summer day. Their new urban plan is very well done, especially the way it will blend quality mixed-use development with the Bothell-Everett highway.

Click here to see listings in Downtown Bothell   Houses Condos

Next Page »