Column: Is aging in place and millenials leaving L.I. the new norm

Philip A Raices

Over the last few years inventory of available homes, co-ops, condos and townhomes has obviously decreased to an astonishing 30-year low, mainly due to a 35-year high in demand and also more and more individuals deciding to “age in place, and not putting their homes on the market.

We are at less than a four- month supply, whereby six to seven months is a normal supply of homes. It’s an experience and phenomenon that I cannot recall occurring previously. The norm used to be, retire, sell the home, then move to a warmer climate, like Florida, southern locations or south western states.

The children would go and visit their parents one or two times or more per year.

However, we are living much longer today and it appears that some of the kids and their families, who can afford to, are living nearby or they have moved out of New York, due to the high cost of homes and general expenses.

 

So now the parents, who may be living and staying in place on Long Island, are they themselves going out of state to visit their kids or visa versa. No one can force a seller to consider selling, because when you have grown roots in your town and are very happy and healthy, that’s enough to stay put.

More important, I am sure some may have a vacation home or condo and avoid the winter by going south. Again, as prices have been escalating over the last four years, for many, it’s better than money in the bank (assuming you have no mortgage or a small one) and you are earning on paper, more than any other place you could place your money; another reason not to consider selling. However, you have to figure out all of your monthly expenses in holding onto your home (heating, electric, water, mortgage, if any, real estate taxes, gardener, repairs, etc. and comparing it against the increase in value as well as your health and happiness in staying in place.

Prices have gone up on average 6.5- 6.9 percent, depending on your particular location. Moreover, sometimes, it’s not always about the money but your peace of mind and being comfortable where you are in life.

Homeownership, as we get older can be a “pain in the butt” and one is not always up to it mentally or physically to maintain their residence or spend needless dollars just to stay in place.

Yeah, that accumulation of stuff over the years can be overwhelming to have to deal with, so maybe you will just let the kids worry about it in the long run or you could seek their help or a private company to begin the task of decluttering, just to not have so much stuff around you in your home.

You just might be happier too! A fresher and new look and environmnet than what you have been accustomed to. You might want to give your place a new coat of paint too, maybe?

Don’t get me wrong, I am not telling everyone to go and get their homes ready to sell, but I am saying to give it serious thought.

If you are happy where you are, then get your home setup up to be friendlier to you as you “age in place” and think of those situations that you will need a simpler layout, a chair lift, if your master bedroom is on the second floor; or if you can move to a bedroom on the first floor.

If you were in a wheel chair, are your tables easily accessible to go under. Lastly, is everything reachable?

There are more than 100 million homes in the U.S. cities, suburbs and rural areas, yet only about 1 percent of them are conducive to aging in place, says Rodney Harrell, director of livability thought leadership for AARP, who serves as the organization’s housing expert. Meanwhile, 10,000 Americans turn 65 every day, and more than 80 percent of those 65 and older say they want to stay in their homes.

If you Google the magazine, “Next Avenue,” there is a more complete article, about aging in place by Angelo Gentile.

So as you can see, this has become a problem for those buyers, who are willing and able to purchase, but are up against a severe critical lack of available inventory.

We are at an impasse, and on one hand we have a majority of homeowners who want to age in place and on the other hand a continuous influx of millennials, (the largest buying group in our history) and other purchasers, whose capability in buying, being excellent and at the same time, the current affordability factor also being superb; even when you factor in inflation over the last 10 years since the collapse of the housing market.
Affordability is better today than in the 15 years prior to the boom and bust in 2007-2008. CoreLogic just published a report showing the National Homebuyers’ “Typical Mortgage Payment.”

If you go to Corelogic.com you will find some excellent statistics, showing that, although a few years ago the cost of purchasing was less, it is still apparent today that owning is still more financially advantageous than renting, as I have repeatedly explained in previous articles.
Mark Fleming, chief economist at First American, explained it best and I quote:
“While borrowing power for the potential home buyer has fallen relative to the low point of 2012, it remains high today and will remain high next year, relative to the long run average. If you don’t want to rent anymore and are considering becoming a homeowner, even if mortgage rates rise next year, your borrowing power will remain strong by historic standards.”
To conclude, there has to be a way for builders, state and the federal government to get together and be able to get some lower priced land in Suffolk or in areas in Nassau, if any exists, and create some kind of a plan enabling lower priced homes to be constructed on Long Island, so our children can also stay in place with their parents.

This would be a fantastic concept and a long term solution to stem a major loss of our children and the continued, “Brain Drain” from leaving Long Island.

Phil Raices is the owner/Broker of Turn Key Real Estate at 7 Bond St. in Great Neck. He has earned the designations as a graduate of the Realtor Institute and is a certified international property specialist. He can be reached by email: Phil@TurnKeyRealEstate.Com or by cell (516) 647-4289 to answer any of your questions or article suggestions or provide you a free Comparative Market Analysis on your property. 

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