Pocketing Housing Equity Nearly Impossible

Downsizing for retirement and pocketing housing equity is typically the retirement choice, but is now nearly impossible. Mortgage-free homeowners seem to have made equity gains when selling the family home. However, with the soaring real estate market, downsizing is no longer a certainty for the future. Retirees that were hoping to save the equity from selling their mortgage-free homes (for travel or leisure), are severely disappointed. Less-expensive communities to purchase their retirement homes in are getting harder to find. The problems for those hoping to move to a smaller town or even a cottage property are the same as in a big city. Pocketing housing equity is nearly impossible.

“Side-sizing”

“Side-sizing” has become a more reasonable goal than downsizing. This involves moving to a different community, rather than a smaller space in the current community. However, rural communities’ property prices have more recently surged as fast as big-city prices. One example is Metro Vancouver, where prices increased 18.2 percent vs rural where it rose up to 37.4 percent. Another is the Greater Toronto Area where urban areas grew by 33.3 percent vs either comparable or greater amounts for rural. Halifax area’s urban properties increased by 30 percent vs South Shore properties that grew up 56.1 percent.

Alternative solutions to pocketing housing equity

Some see going even farther afield as a solution. But consequences include weather, transportation costs, grocery costs, as well as medical access. Another, more creative solution, is helping their children buy their first home, and relocating to an in-law suite on the same property. First-time homebuyers are finding it impossible to find the cash to purchase a home. With this solution, two birds are killed with one stone.

To view this entire article, visit Why downsizing your home in retirement may not be as simple as you think – The Globe and Mail.

For all things real estate, visit XLR8 Realty.