The 2022 competitive housing market is an advantage for 55+ buyers. Cash is king when buying a home in the current market and most 55+ buyers have built up a large amount of equity in their homes which have skyrocketed in value over the last few years. This gives them the option to sell their current home and pay cash for their dream retirement home giving them a competitive edge in a tight housing market.
Housing Market 2022
During the past couple of years, the real estate market has seen rising home prices and limited supply. The global pandemic has contributed to the competitive seller’s market with many people realizing they no longer want or need to live in a crowded, expensive metropolitan area. With a migration to less crowded, less expensive areas in the country, the need for housing in those areas has greatly increased. Unfortunately, supply chain issues and labor shortages have prevented inventory from keeping up with demand.
According to ATTOM Data Solutions, a leading curator of real estate data, all-cash single-family home purchases accounted for 34.2 percent of home sales in 2022 Q1. That’s the highest level since 2015 Q1.
It’s not surprising that Redfin reports, “Prospective homebuyers who offered all cash were more than four times as likely to win a bidding war as those who didn’t in 2021, making it by far the most effective strategy to win a home when there are multiple offers.”
With many 55+ buyers in a position to use the large increase in equity of their current homes to pay cash for a new retirement home, the current competitive housing market is an advantage for this demographic.
Home and Community Needs
Many 55+ buyers are either retired or contemplating retirement in the near future. This is causing many of these buyers to contemplate selling their homes to buy a single-level home that is built for aging in place in a low-maintenance community.
According to an AARP survey, three out of four American adults over age 50 would like to stay in their homes through retirement, although many don’t think it would be practical. As we age, our housing and community needs will change. Remodeling an older house could end up being a disappointing compromise compared to buying a new house with new systems, designed for aging in place.
55+ buyers often pay just as much attention to the community as they do to the homes in the community when shopping for a new home. Building a home in a low-maintenance community with amenities such as a clubhouse with pool, exercise room and walking trails is a major benefit for most 55+ buyers.
Many of these communities have tennis, pickleball or bocce ball courts as well as planned activities that encourage a sense of community. HOA fees may be higher in a master-planned community, but the benefits and convenience of the resort-style amenities and social gatherings close to home can make it well worth it.
The Time to Buy Is Now
While some 55+ buyers are still on the fence about buying a new home in a seller’s market, housing prices are not likely to come down and will most likely continue to rise along with the interest rate. According to a recent article from time.com, experts say it’s unlikely prices will drop much anytime soon and that a big drop is very unlikely.
For those remembering the housing bubble and market crash in 2008, it was very different from the current market. In the years preceding the 2008 crash, there was a surplus of inventory, and some lenders and investors were careless about whether their buyers could afford the mortgage payments. This made it easy for the buyers to walk away from their homes when the bubble burst as they owed more than their home was worth.
As anyone trying to buy a house in the last few years knows, there is an undersupply of homes on the market these days. The rising prices are not being caused by an investment bubble but rather by limited supply with large demand. The price of land, materials and labor are not going to suddenly drop but will most likely continue to rise over time. This means home prices should be stable even as the market cools slightly because of increased prices and interest rates.
The current competitive housing market is an advantage for 55+ buyers because of an unprecedented increase in home equity making this the perfect time to buy. Waiting could mean paying a lot more for a house even for cash buyers. For those who want to finance their new home, higher interest rates may make it difficult to get the home of their dreams if they wait too long to buy.
Epcon Communities makes it simple to find the home of your dreams in a low-maintenance community with resort-style amenities in areas across the country. We offer luxury ranch homes with single-level living designed with open floorplans that wrap around a private courtyard for ample natural light and enjoyable outdoor living space.
If you are considering buying your dream home and want to tour our new homes, contact us for expert advice. Discover the benefits of living in an Epcon community and how the low-maintenance lifestyle can give you more time to enjoy life!