Retirees or those about to retire are so worried about the current economic crisis that they fear even trying to sell their homes, even though many have planned to move upon retirement. There is news every day that home prices have dropped and are still dropping.
The Decline in Housing Prices
One of the reasons for the current recession is that housing was overbuilt during the last few years and housing prices went up artificially. Homes were priced too high. More than a year ago, home prices started to drop and the housing bubble burst. If you lived in a $300,000 home, it may be worth $240,000 now, depending on where you live. Home prices have dropped 20% - 40%.
The good news, if you have always dreamed of moving to your dream destination, is that you still may be able to move. Housing prices have dropped everywhere. Even though you may have to sell your current home at a lower price than you anticipated, if you have a lot of equity in your home, you will still be able to buy a home in another area of the country.
Moving to Another Area of the Country
Recently, President Obama went to Fort Myers, Florida to give a speech on housing since Fort Myers has one of the highest foreclosure rates in the United States. Fort Myers is also a very desirable retirement location. If you look at the Reality Check blog, you will see that you can get a very nice home in Fort Myers for less than the equity you have in your home in the example given above.
Phoenix, Arizona is another desirable retirement spot. Arizona is one of the top three states with regard to foreclosures. It is also in the top 10 cities in the United States in the number of foreclosures. Buying a home in a desirable area of Phoenix used to be prohibitively expensive, but that is no long the case. As in the previous example, you can take $240,000 in equity or even less and buy a nice home in Phoenix now due to the high foreclosure rates and the drop in home prices.
Another state where the foreclosure rate is high is Nevada. That means that home prices are affordable if you are interested in living in that state.
Other Issues to Consider
There are other issues you must take into consideration when you think about moving to another area. Cost of living issues are of key importance. Home prices are only important if you can afford to live in your dream retirement destination. You can do a side-by-side comparison of different areas and cities at Fast Forward. This site helps you compare climate, cost of living variables, and crime for different locations. You can then put these variables into your moving equation and make your decision about moving.
 |
