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Real Estate 2006: Where Do You Go From Here?
In this season of uncertainty, we asked financial, economic and property pros to tackle a bunch of real-world real estate scenarios. Their advice for everyone from nervous new owners to antsy empty nesters could help you protect your investment, too
By Kathleen Fifield
EMPTY NESTERS
Big house. Kids finally out of it. Prices still high. Is it time to cash in — even if we’re not really ready for retirement?
Experts agree that selling the family homestead without having your next move mapped out isn’t the ideal way to kick off retirement. As Glenn Meyer, a certified financial planner in Jenkintown, puts it, “This is a major lifestyle decision that requires significant research, including visiting possible retirement locations for extended periods. A terrible scenario would be if you sell your current residence, purchase your retirement home, and discover 18 months later that you made a mistake.” Besides, you could be wrong about what the market will do. “Pundits don’t know any more than the rest of us,” Meyer says. “Don’t base any real estate decision on what you read.” Steven Savitz, owner of APM Real Estate in Center City, notes that he’s worked with nervous sellers for the past three or four years. “They’ll say, ‘We’re not going to retire for two years, but we want to sell now because we think we’re at the height of the market.’ It’s funny, because they’d get so much more selling today than two years ago.”
Jason Cole, managing director of Abacus Wealth Partners in Center City, adds that while many people think they’ll sell high, downsize, and wind up with a jumbo retirement cushion, it doesn’t always work that way. Sure, you may want your next home to be slightly smaller and with a lot less upkeep, but you might also want it to be newer and on a golf course. Many of his investment clients, Cole says, are the boomers buying luxury condos in Center City, and they’re spending more on their ultra-modern lofts than they recouped from their colonials on the Main Line. So unless all of your personal equity is tied up in your house (in which case, advisers say, you should rent or downsize for purely financial, not market, reasons), resist the temptation to make a bundle by acting fast.
The bottom line: Moving is never easy. Unless your nest egg is woefully small, don’t rush to sell until you’ve nailed down what you want your next step in life to be.
Big house. Kids finally out of it. Prices still high. Is it time to cash in — even if we’re not really ready for retirement?
Experts agree that selling the family homestead without having your next move mapped out isn’t the ideal way to kick off retirement. As Glenn Meyer, a certified financial planner in Jenkintown, puts it, “This is a major lifestyle decision that requires significant research, including visiting possible retirement locations for extended periods. A terrible scenario would be if you sell your current residence, purchase your retirement home, and discover 18 months later that you made a mistake.” Besides, you could be wrong about what the market will do. “Pundits don’t know any more than the rest of us,” Meyer says. “Don’t base any real estate decision on what you read.” Steven Savitz, owner of APM Real Estate in Center City, notes that he’s worked with nervous sellers for the past three or four years. “They’ll say, ‘We’re not going to retire for two years, but we want to sell now because we think we’re at the height of the market.’ It’s funny, because they’d get so much more selling today than two years ago.”
Jason Cole, managing director of Abacus Wealth Partners in Center City, adds that while many people think they’ll sell high, downsize, and wind up with a jumbo retirement cushion, it doesn’t always work that way. Sure, you may want your next home to be slightly smaller and with a lot less upkeep, but you might also want it to be newer and on a golf course. Many of his investment clients, Cole says, are the boomers buying luxury condos in Center City, and they’re spending more on their ultra-modern lofts than they recouped from their colonials on the Main Line. So unless all of your personal equity is tied up in your house (in which case, advisers say, you should rent or downsize for purely financial, not market, reasons), resist the temptation to make a bundle by acting fast.
The bottom line: Moving is never easy. Unless your nest egg is woefully small, don’t rush to sell until you’ve nailed down what you want your next step in life to be.
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