If there’s one thing this last year has confirmed, it’s that every healthy day is a gift. To that end, with restrictions easing and second vaccine doses being administered, it’s not surprising that many Calgary Boomers are picking this moment to downsize.
After all, the latest Calgary Real Estate Board stats show that prices in the detached market have recovered and the pent-up demand is breaking records. Why not cash in your equity so you can lead the life you want and maybe enjoy some financial freedom?
As with all things real estate, you don’t want to make a decision without having the right
information. Here are a few things to consider:
Lifestyle needs still matter
It’s important to take a few moments to think about where you are right now and, more importantly, where you’re going to be in a few years. Will you have too much yard? Too many stairs? Too much sidewalk to shovel?
It’s easy to put off this kind of thinking, especially if you’re still in great health. But why not consider your options while you have the luxury of time? Being proactive not only puts you in the driver’s seat when it comes to your living situation – it’s much preferred to waiting until you have no choice but to sell because of a health or lifestyle concern.
Downsizing does not mean retirement home
There are so many ways to downsize: maybe it’s going from a two-story to a bungalow with a small yard; maybe it’s going from a bungalow to a turn-key condo because you’ve decided to become a snowbird.
There are also lots of property options geared at seniors, and you may be surprised at how much independence you can maintain while living an easier lifestyle.
Take my one client’s parents: they were living in a bungalow in an older and more established neighborhood. They had a big yard that was getting hard to keep, but they also didn’t want to give up the enjoyment that comes with having green space.
We sold their bungalow for a great price and got them into a seniors-style villa that was located closer to their children and grandchildren. These types of villas are essentially like attached bungalows, but with the same convenient benefits as a condo (walks are shovelled, the grass is cut, etc.). It’s a great way to offload maintenance while keeping your independence.
Does it make financial sense to downsize?
You sell and buy in the same market, so it’s really important to get an accurate evaluation of what your home is worth in today’s market. This can vary widely based on neighborhood and property type.
I always recommend interviewing at least three REALTORS® and obtaining a home evaluation from each. A word of caution: your property will always have more value to you because of the memories you’ve made there, but potential buyers won’t see that.
Clients often ask about deferred maintenance in these situations. If you’ve kept up with your home’s maintenance, that’s fantastic; if you haven’t, it’s not necessarily the end of the world. Much of your home’s value – especially in older, inner city communities — will be based on land value and proximity to downtown.
For example, when you have land value that is potentially worth $600,000 to $800,000 in an
area like Kelvin Grove or Chinook Park, deferred maintenance won’t really impact your resale
value. But again, the value varies widely from neighborhood to neighborhood so connect with a Realtor that is experienced and has a deep understanding of Calgary’s market.
Weigh out the financial costs and lifestyle benefits
Once you have an idea of your home’s resale value, you need to crunch these numbers: the value of your home; the actual or anticipated balance remaining on your mortgage or line of credit; net gain after subtracting total moving costs; and the cost of a new home (plus condo fees if applicable). Add to that your lifestyle goals and you’re well on your way to making asound decision.
If you are thinking of downsizing and would like to know more about the potential resale of your home, I’m always happy to have chat.
As for my client’s parents? They are now in their 80s and still going strong. They see their grandkids every week and are living their best life in their maintenance-free dream home (with a lovely green space).