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Weighing the Pros and Cons of Outlying Living

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 16th, 2020

Remember when many homebuyers were going urban in a major way? To squeeze themselves into trendy city communities, they were willing to accept small condos so long as they could walk to restaurants, clubs and coffeeshops.

But suddenly much of that fondness for city life has diminished -- thanks in large measure to COVID-19. Countless young buyers, along with many elders, now hanker for the calm, safety and maximum elbow room afforded by suburbia. Indeed, some are even searching for supersized property in semi-rural exurbia.

Of course, those experiencing financial reversals due to the pandemic are in no position for home shopping. Yet many buyers lucky enough to hold jobs suited to remote work are thrilled they can now reasonably consider a large home in an outlying area, says Sid Davis, the author of “A Survival Guide for Buying a Home.”

“Demand well beyond core cities is exploding. That’s because the farther out buyers go, the more their money stretches, enabling them to fulfill their wish for an exceptionally large property,” says Davis, who’s worked as an independent real estate broker in the business for more than 30 years.

The excitement about buying opportunities in non-urban areas is reflected in soaring confidence on the part of homebuilders, many of whom focus on the construction of large properties in outlying areas, where buildable land is less pricey than near cities.

“The suburban shift for homebuilding is keeping builders busy, supported on the demand side by low interest rates,” says Robert Dietz, the chief economist for the National Association of Home Builders (nahb.org).

Dietz says builders throughout the country are now inundated with calls from those living in high-density markets who want to relocate to a spacious new home well outside their metro center.

Some housing analysts say the quest for a very spacious home -- in excess of 3,000 square feet -- represents a return to the traditional view that a large property enhances quality of life.

“There’s something beguiling about big houses. Bigger is always better in America, assuming you can afford it,” says James W. Hughes, a housing expert and dean emeritus at Rutgers University.

But Hughes and other real estate analysts caution buyers against rushing into the purchase of a huge home without considering the implications going forward --especially if you must go quasi-rural to afford an oversized place.

“Review your realistic needs. For example, if you and your spouse work from home a lot, you might truly need spare bedrooms for dedicated home-based offices. But a formal dining room could be superfluous,” he says.

Here are a couple of other pointers for buyers:

-- Don’t rule out the need for a reasonable commute.

In recent years, many people bullish on large houses were nevertheless unwilling to accept a lengthy commute in exchange for more living space and a sizable yard. It was obvious they could get more house for the money in outer suburbs, but they refused to accept such tough trade-offs.

Still, the surge in remote working arrangements brought by COVID-19 has convinced many buyers that they’ll be entitled to work from home into the indefinite future --even after the pandemic has lifted.

“The outlook for remote work has generally become quite positive on the part of employers,” Davis says.

But he urges buyers to think beyond the pandemic to a time when companies might reevaluate their remote-work policies away from what they currently allow.

“What if your boss decides he wants you in the office two or more days of the week for team-building meetings and you’ve moved to a rural area a three-hour drive away? Or what if you must change to a company that doesn’t like telework? All these are realistic possibilities post-COVID,” Davis says.

To hedge their bets on remote work going into the future, he recommends buyers consider no property that’s more than a 60-minute commute from their current office or an employment hub where they might likely work.

“After the pandemic, you don’t want to get stuck with a punishing commute that steals your personal time,” he says.

-- Realize your floor plan will matter along with square footage.

Fred Meyer, a longtime real estate broker and appraiser, says many parents of school-age children want a house with a large master suite that’s segregated from the cluster of bedrooms where their kids reside. This is especially likely if their offspring are teenagers who thrive on loud music and games.

“It’s common nowadays for homebuyers to ask for ‘his and hers’ home offices. They want these home offices separated from the main living areas of the property. This requires lots of space,” Meyer says.

In addition, many buyers continue to yearn for exceptionally large kitchens with professional-grade appliances that flow into a great room where everyone can gather. Plus, they’re more eager than ever for a large yard.

But as Meyer notes, many buyers of very large houses make minimal use of some of their spaces. For example, he questions whether home fitness rooms will be as appreciated after public gyms fully reopen.

“Especially in areas where property taxes are high and rising, you don’t want to own a house with extra rooms you’ll never use,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Planning Ahead for a Post-Pandemic First Home

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 9th, 2020

Now that summer has morphed into fall and the prospect of a COVID-19 vaccine is in sight, many young Americans are eager to make up for lost time toward their big life goals. Topping many lists: buying a first home.

The urge to move forward to homeownership has been intensified by alluringly low mortgage rates. But housing economists say that in many cases rising property prices are canceling out the added buying power that comes with low rates.

For wannabe owners, the underlying problem is an extreme shortage of available homes at the affordable end of the price spectrum, says Daryl Fairweather, chief economist at Redfin, a national real estate firm.

“Because there hasn’t been an increase in the number of homes for sale since rates started dropping with the onset of the pandemic, many buyers end up competing for the same homes, driving up prices,” Fairweather says.

Those competing forces have made the current market a wash for many homebuyers -- especially those seeking a single-family home in a popular suburban neighborhood, though the picture is more positive for those wanting a condo.

“Buyers searching for condos can find a better deal, both on overall price and mortgage payments, because most condos are less competitive than single-family homes as people move out of densely populated urban areas,” Fairweather says.

Regardless of the market conditions they’re facing, many young buyers -- restless after months of pandemic restrictions -- are determined to plow forward with their purchasing plans, according to George Ratiu, a senior economist for Realtor.com, a home-listing company.

He says one sure sign of confidence on the part of home sellers involves the stunning rise in the list prices they’re posting.

“Currently, median listing prices are 10.6% higher than a year ago. Meanwhile, the low supply of homes for sale has meant that properties are coming off the market in record time,” according to Ratiu.

Under such competitive circumstances, one risk facing frustrated young buyers is that they’ll allow their judgment to be influenced by the competition, especially if they’ve lost out on one or more properties to rival bidders.

“Don’t lose your head in the process. You never want to pressure yourself into buying an inappropriate property or paying way too much just to beat out other buyers,” says Tom Early, a veteran real estate broker.

Although mortgage rates are currently very attractive, Early cautions novice buyers against rushing into any deal solely to take advantage of low-cost home finance.

“There are a multitude of lifestyle factors related to the home you buy beyond mortgage rates. Because where you live is just a huge element in your happiness, take your time,” says Early, a past president of the National Association of Exclusive Buyer Agents (naeba.org).

Here are a few pointers for buyers:

-- Consider the most spacious place your finances will allow.

Clearly, you’ll want to postpone home-buying if your future is uncertain. Suppose, for example, that you or your spouse are considering law school in another city or a potential out-of-state job move. Contrast that with a couple holding down two steady jobs.

Early urges first-time buyers to look beyond their present situation.

“Forget buying a home the way you’d buy a pair of shoes -- to fit your current needs. In the ideal world, you’ll choose a place where you could live comfortably for at least seven to 10 years, giving you the option to remain there for as long as you want without outgrowing the house,” Early says.

-- Place a high priority on school quality.

Right now the parents of school-age children are grappling with the tough trade-offs involved with online versus in-person learning for their kids. But families plotting a home purchase also face longer-term issues. They’ll want access to quality schools well after the pandemic is over.

In most areas, it’s now easy to find online comparisons of schools based on test scores. That’s because most school systems freely disseminate test results on their websites. Also, there are a number of independent websites that use publicly available data to rank schools, says Kate Barrington, who blogs for one such site: Public School Review (publicschoolreview.com).

Under normal circumstances, agents recommend that home shoppers make in-person visits to schools in a neighborhood of interest. But the pandemic is making such site visits difficult. Thus, Barrington encourages buyers to reach out to parents’ groups through social media.

-- Always keep your eye on resale value.

As Early notes, rising demand for affordable properties among young adults means available homes will likely remain in very short supply going forward.

“No matter how long you intend to stay in the home, I strongly recommend you buy with resale in mind. A house with several bedrooms should prove more marketable than a smaller one, especially now that many people want two dedicated home offices,” Early says.

The bathroom count also matters.

“Remember that very few people, including singles, want to live in a place with just one bathroom. I’ve never seen a house with too many bathrooms,” he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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COVID Upending Housing Plans

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 2nd, 2020

Millennials and Gen-Xers aren’t the only ones the pandemic is making restless to buy a bigger home. Some baby boomers are also planning their future housing purchase with a more spacious place in mind.

Take the case of a university professor and his wife, who runs a small antique business. This Social Security-age couple raised their three kids, now grown, in a three-bedroom rancher. Before COVID-19, they’d imagined moving to a condo in their college town. But pandemic living has shifted their priorities. Now they plan to upsize to a five-bedroom house with a pool.

“COVID taught us family overtakes all else. Our new vision is for a really big place where the whole family -- including the grandkids -- can visit often and stay over for holidays and vacations,” the husband says.

Moreover, all the months of home-centered living have intensified this couple’s interest in several luxury features, like a sumptuous home theater, a fitness center, a playroom for the grandchildren and -- most importantly --two dedicated home offices.

“We’ve had it sharing the dining room table for makeshift offices. I love my wife, but I also need square footage where I can do my own thing on the internet,” the husband says.

Stacy Berman, a longtime real estate agent who specializes in luxury home sales, doesn’t know the couple in this true story. But she works with many seniors who are revamping their housing plans in pursuit of a larger home, where family is more central.

For example, she cites the case of a couple in their 60s -- a soon-to-retire neurosurgeon married to a homemaker -- who are selling their suburban Virginia house in favor of a much larger place in Tennessee to be closer to the grandchildren they haven’t seen for months due to COVID.

“Many boomers are now revising their housing plans. The isolation caused by COVID has convinced many older people that bigger is better if it brings family together,” Berman says.

Of course, there are still numerous homeowners of boomer-age -- born between 1946 and 1964 -- who can’t afford to upsize. These are empty nesters who must stay put or downsize.

Even so, numerous boomers are sitting on enough home equity from homes they’ve owned for many years to give them a range of housing choices, says Ken Dychtwald, an expert on aging trends.

Dychtwald, co-author of “What Retirees Want” and other books on seniors, characterizes the boomers as a generation constantly reinventing itself.

“Boomers have lived in multiple homes. They’re comfortable with change and moving. And they’re determined to make their own choices. This is natural,” he says.

Here are a few pointers for senior buyers:

-- Try to reconcile differing views between you and your partner.

Rosemary McMonigal, a residential architect who’s advised clients for more than two decades, recommends that older couples with different visions create priority lists and acknowledge the validity of each other’s preferences.

Though many seniors favor a smaller property, McMonigal says it’s not unusual for one spouse to prefer a larger habitat.

“Americans have more square feet per person than people in any other country. So, emotionally, we’re accustomed to having a lot of private space,” she says.

-- Look for a home with intimate rooms if you want a supersized house.

Are you planning to buy a much more spacious domain? In that case, Ashley Richardson, a veteran real estate agent affiliated with the Residential Real Estate Council (crs.com), recommends you seek a home that seems intimate despite its large size.

“You don’t want to feel you’re rattling around in an oversized place that seems lonely, especially when you’re there by yourself,” says Richardson, who works for the Long & Foster company.

To find a large home where you’ll feel at ease, she recommends you avoid a property with a two-story atrium or ceilings that soar 10 feet or higher. Likewise, avoid a home with an oversized formal living room you’ll rarely use.

“The coziest arrangement is to have your big family room right off the kitchen, because people spend most of their time in the kitchen area,” Richardson says.

-- Don’t assume the home you buy post-COVID will be your last one.

Many older people think any place they buy after retirement will be the last place they live. But Dychtwald says it’s common for buyers in their 60s to live in two or three more places during their retirement years.

Dychtwald says those who want to buy a big home right after retirement often reverse course after they’ve gotten the “dream home phase” out of their systems. To simplify their lives to travel or reduce upkeep demands, they may later opt for a much smaller place.

He says someone who would like to downsize but accedes to a spouse who wants a big property can take comfort in the expectation that sooner or later the other person will likely also want a smaller home.

“Sometimes, you have to compromise. But that’s not so bad when your next move won’t necessarily become permanent,” Dychtwald says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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