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May 28, 2016

Many Retirees Defy Real Estate Stereotypes

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Many Retirees Defy Real Estate Stereotypes

Eighty percent of adults 45-plus say that they plan to age in place and “remain in my local community” when they retire, according to a survey by the AARP. But as they approach retirement, some are choosing to do the opposite of what they once thought: They’re either moving to the city or choosing to upsize their digs.

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Retirees Choosing to 'Upsize' Homes

In 1999, Charlene Zimmerman and her husband Jack moved away from the suburbs of Chicago into a loft-style condo in the West Loop neighborhood near downtown. She told The Chicago Tribune that they have no regrets about moving to the city in retirement. “When I lived in the suburbs, the last thing I wanted to do when I got back from work was drive downtown to do something,” she says. “And now I go places all the time, and I think it’s the most wonderful change.”

Some retirees are not always choosing to downsize either, despite their empty-nest. A survey by Age Wave – a firm that studies the aging population – shows that only about half of retirees 50-plus who move after retirement choose a home that is smaller than their previous one. About 19 percent move into a home that is similar in size while 30 percent opt to upsize and increase their square footage in retirement.

For some retirees, the upsize may not come in the form of square footage but instead in the amount they pay for their home, especially if they’re heading into places in the city.

“I find a lot of sticker shock,” Matt Silver, president-elect of the Chicago Association of REALTORS®, told The Chicago Tribune. “Lots of people living in the suburbs are sick of home maintenance, sick of shoveling the driveway. They want an easier way of living.”

Still, couples like the Zimmerman’s – who moved to the city and increased the amount they paid for their home – are exceptions to the norm in retirement. Data from the National Association of REALTORS® shows that only about 12 percent of “repeat buyers” (who are most likely to be in the baby boomer and Gen Xer cohort) buy a home in an urban area. As for the others? About 12 percent of “repeat buyers” buy a home in a rural area, 20 percent head to small towns, and the majority – at 53 percent – buy in the suburbs.

Source: “Checking in with Retirees Who Have Moved Back Downtown: How Do They Like It?” Chicago Tribune (March 8, 2016)