It’s a Great Time for Seniors to Sell Their Homes… but for How Long?
National home prices rose by 7 percent in 2015 over 2014 according to Redfin, a national real estate brokerage, or by 4.6 percent according to the S&P/Case-Shiller U.S. National Home Price Index. Meanwhile, the growth of home values is accelerating again, according to the Zillow Home Value Index. By any metric, home prices are growing faster than the costs of senior living, which grew by 2.7 percent in 2015 according to our Senior Living Cost Index.
All these numbers point to a hyper-competitive real estate market with historically low inventory but steady demand. That means it’s a good time for seniors to sell a home and move to senior living, reports McKnight’s Senior Living.
But for how long?
2015 Year-Over-Year Growth of Home Prices and Senior Living Costs
|Redfin Real-Time Data Center||7.0 percent home price growth|
|Case-Shiller National Index||4.6 percent repeat-sale home price growth|
|A Place for Mom Senior Living Cost Index||2.7 percent senior living cost growth|
Trouble Ahead in the Housing Market?
Redfin and Zillow are reporting some possible signs of a market shift driven by buyers at the low- to mid-end getting priced out of the market. But are those signs strong enough to overwhelm the evidence that a booming sellers’ market will continue?
Selected Headlines from Redfin and Zillow
It’s a booming sellers’ market…
- With Prices So High, Why No Supply? – Redfin Chief Economist Nela Richardson gives three reasons homebuyers can’t find their dream house. “Chronic short supply has dealt sellers a strong upper hand,” Richardson writes.
- February Market Report: Peeking at Home Value Peaks – Zillow Chief Economist Svenja Gudell writes, “Median home values in more than a quarter of the nation’s metro housing markets are currently, or were recently, as high as they’ve ever been.”
- Now is a Great Time to Sell, Unless You’re Also a Buyer – Jeffery Marino at Redfin tells it like it is. Senior homeowners, take note and feel relieved you’re not looking to buy.
- Growth and Growing Pains in Denver: Migration, Millennials, Retirees and Renters – Sarah Mikhitarian at Zillow tells a tale of rapid home price (and rent) growth in Denver.
…but for how long?
- March Case-Shiller Forecast: Expect the Slowdown to Continue – Zillow Chief Economist Svenja Gudell forecasts steady national Case-Shiller growth at 5.3 percent but a 0.3 and 0.4 percentage point slowdown in growth for the 10- and 20-City Composites.
- San Francisco Home Prices Fell for the First Time in Four Years in March – Troy Martin at Redfin asks, “Is San Francisco previewing what’s to come?”
- Homebuyer Demand Ebbs for Fourth-Straight Month – Rachel Musiker at Redfin writes that home tours are up 19 percent but offers are down 8 percent, echoing Nela Richardson’s sentiment in the San Francisco article that, “there simply aren’t enough homes for sale to maintain such a torrid [home price growth] pace again this year.”
Two things are certain. First, the housing market has recovered in a way that prices a lot of homebuyers out of the market. Second, the few homes that are on the market sell like hot cakes and at high prices. Put those two things together and it looks good for seniors with a home to sell. But what’s uncertain is how long that sellers’ market will last. Seniors and their families should follow the real estate market closely to make sure they can take advantage of favorable market conditions in a way that suits their needs, priorities and timelines.
We Can Help! Our local advisors can help your family make a confident decision about senior living.