Have you ever wondered, “Should I move to Philadelphia, PA?” Living in Philly is like being in a giant history book but with a modern twist. This city is famous for its cheesesteaks, passionate sports fans, and the Liberty Bell, showing off its rich history and spirited culture. Philadelphia is unique because it blends old-world charm with bustling city life, where historic sites like Independence Hall stand alongside trendy restaurants and shops. Whether you’re exploring the cobblestone streets of Old City or enjoying a picnic in Fairmount Park, Philadelphia offers a special experience that’s hard to find anywhere else.
Before packing your bags, it’s a good idea to know the city’s strengths and weaknesses to make sure it’s the right fit for you. In this article, we’ll discuss the pros and cons of living in Philadelphia that may help you make your decision. Let’s get started.
Philadelphia at a Glance
Walk Score: 75 | Bike Score: 67 | Transit Score: 67
Median Sale Price: $243,000 | Average Rent for 1-Bedroom Apartment: $1,722
houses for rent in Philadelphia | apartments for rent in Philadelphia | homes for sale in Philadelphia
Pro: Strong historical heritage
Philadelphia, often dubbed the “Birthplace of America,” is steeped in rich historical significance, offering residents and visitors a unique glimpse into the nation’s past. From the iconic Liberty Bell to Independence Hall, where the Declaration of Independence and Constitution were debated and adopted, the city is a living museum. Living in Philadelphia means having unparalleled access to these historic sites, along with numerous museums and educational opportunities that celebrate America’s journey to independence.
Con: Challenging winter conditions
One of the cons of living in Philadelphia is the harsh winters. During the winter months, it’s common to experience freezing temperatures, heavy snowfall, and icy conditions. Locals must contend with bitter cold temperatures, which can make daily activities such as commuting or running errands a daunting task. Snowstorms frequently blanket the city, causing disruptions to transportation networks and posing safety hazards for pedestrians and motorists alike. Despite the city’s efforts to maintain roadways and clear snow, the severity of winter weather in Philadelphia remains a significant inconvenience for residents.
Pro: Beautiful green spaces
Philadelphia is home to an abundance of green spaces and parks, offering residents a peaceful escape from the urban environment. Fairmount Park, one of the largest urban parks in the country, provides miles of trails for hiking, biking, and outdoor activities. The city’s commitment to maintaining and expanding its green spaces means that locals can easily find a natural retreat within the city limits, promoting a healthy and active lifestyle.
Con: Limited biking infrastructure
One notable drawback of living in Philadelphia is its lower bike score of 67. Despite efforts to improve bike infrastructure, such as dedicated lanes and bike-sharing programs, many areas still lack adequate facilities for safe and convenient cycling. The city’s narrow and congested roads can make cycling intimidating and hazardous. As a result, residents who rely on bikes as a primary mode of transportation may find their options limited and may need to exercise extra caution when riding in the city.
Pro: Dynamic culture
Philadelphia’s arts and culture scene is a significant pro for residents. The city is home to the Philadelphia Museum of Art, famous not only for its vast collection but also for the iconic “Rocky Steps.” Beyond this, there are countless galleries, theaters, and live music venues across the city, catering to a wide range of artistic tastes. The annual Fringe Festival showcases avant-garde theater and performance art, highlighting the city’s diverse and vibrant cultural landscape.
Con: High cost of living
Despite its many attractions, Philadelphia’s cost of living can be a big con for some. The cost of living in Philadelphia is 2% higher than the national average. While it is more affordable than cities like New York or San Francisco, rent prices and daily expenses can be high, especially in more desirable neighborhoods. For those with modest incomes or fixed budgets, the elevated cost of living can limit opportunities for savings, investments, and overall financial stability. As a result, many residents must carefully budget and prioritize expenses, sacrificing certain luxuries or experiences to make ends meet.
Pro: Exceptional culinary scene
Philadelphia boasts an exceptional culinary scene that goes far beyond its famous cheesesteaks. The city is a melting pot of cultures, reflected in its diverse food offerings. From high-end dining experiences like Hiroki or Fork, to local food trucks, there’s something for every palate. The Italian Market, one of the oldest and largest open-air markets in the country, offers fresh produce, meats, and specialty foods, showcasing the city’s rich culinary heritage.
Con: Public transportation challenges
With a Transit Score of 67, many people find public transportation lacking in Philly. While Philadelphia does have a public transportation system, including buses, subways, and trolleys, residents often face challenges with reliability and coverage. Some areas of the city are not well-served by public transit, making it difficult for those without cars to navigate. Additionally, delays and infrequent service can be frustrating for daily commuters.
Pro: Sports fan’s paradise
“Should I move to Philadelphia if I’m a sports fan?” Absolutely. Living in Philly is a dream for sports fans, offering professional teams across various leagues. The Philadelphia 76ers dominate basketball courts, while the Philadelphia Flyers electrify ice hockey enthusiasts. At Citizens Bank Park, the Philadelphia Phillies draw crowds with their passionate baseball games, and the Philadelphia Eagles ignite fervor in football fans at Lincoln Financial Field. Additionally, the city’s collegiate sports scene, led by universities like Temple and Villanova, adds further excitement to Philadelphia’s sports culture, making it a true paradise for those who live and breathe athletics.
Con: Minimal green building initiatives
While Philadelphia has made strides in sustainability, the city still has limited green building initiatives compared to others. This can be a con for environmentally conscious residents who prioritize living in a city that embraces sustainable development practices. Efforts to increase green buildings and eco-friendly infrastructure are ongoing, but progress has been slower than in some other major cities.
Pro: Proximity to other major cities
A significant pro of living this city is its strategic location on the East Coast, offering easy access to other major cities like New York City, Washington D.C., and Baltimore. This proximity makes it convenient for residents to explore these cities for business or leisure, without the need to relocate.
Jenna is a Midwest native who enjoys writing about home improvement projects and local insights. When she’s not working, you can find her cooking, crocheting, or backpacking with her fiancé.
It can be so hard to find the perfect apartment, sifting through a seemingly endless selection of listings to choose the space that’s right for you. While it’s important to find an apartment that fits all your needs, you also need to be aware of some common red flags that can make your life as a renter much more difficult than it needs to be. So before you sign the lease for that Denver studio apartment or a 2-bedroom apartment in Sacramento, here are some common apartment red flags you absolutely need to avoid.
1. Absence of security deposit requirement
While the idea of not having to pay a security deposit upfront might initially seem appealing, it can actually be a red flag. Security deposits serve as a form of protection for landlords against potential damages to the property beyond normal wear and tear.
Landlords who don’t require a security deposit may be taking shortcuts in their screening process or may lack confidence in the condition of their property. Without a security deposit, tenants may also find themselves financially vulnerable if there are disputes over damages or unpaid rent.
“As a tenant, who would want to give a security deposit? This means extra money that you now need in addition to the first month’s rent,” says Illinois real estate lawyer David Frank. “This also means if you don’t keep the place in the proper condition, the landlord can offset damages from that deposit. It also means you lose access to that money during your lease term. But, what if I told you that putting down that security deposit could be the BEST leverage you will ever have against your landlord if an issue should arise?”
2. Poor maintenance
When viewing the apartment, take note of any signs of neglect or poor maintenance. Look for leaky faucets, cracked walls, broken appliances, or signs of pest infestation. A well-maintained apartment is a sign of a responsible landlord who cares about their property.
3. Unresponsive landlord
Communication with your landlord is crucial, especially when emergencies or maintenance issues arise. If the landlord or property manager is unresponsive during the rental process or seems difficult to reach, it could be a sign of future difficulties in getting necessary repairs or addressing concerns.
4. Overly restrictive lease terms
Pay attention to any overly restrictive clauses in the lease agreement that could limit your rights as a tenant. This might include unreasonable restrictions on guests, pet policies that are overly strict, or clauses that prohibit certain activities within the apartment.
While some rules are necessary for a peaceful living environment, excessively strict lease terms could indicate a landlord who is overly controlling or unwilling to accommodate reasonable needs. Make sure the lease terms are fair and reasonable before committing to renting the apartment.
5. Lack of lease agreement
A proper lease agreement protects both the tenant’s and the landlord’s rights. If the landlord is unwilling to provide a written lease agreement or presents one with vague or unfair terms, it’s a major red flag. Always review the lease thoroughly before signing and seek clarification on any ambiguous clauses.
6. Inconsistent or problematic rental terms
Pay attention to inconsistencies in the rental terms provided by the landlord. This could include discrepancies in the rent amount, included utilities, or maintenance responsibilities. Clear and consistent rental terms are key for avoiding misunderstandings down the line.
“When looking for a new apartment to rent, renters should be aware of hidden or problematic lease terms,” according to Los Angeles-based law firm Schorr Law. “It is one thing to get the apartment you physically want, but renters should be aware that even if you get the apartment you want, you may not get the lease you want. Hidden lease terms include shifting hidden costs to the tenant for things like utilities or building security. Other hidden lease terms can include an ability for the landlord to terminate the lease without cause or to relocate the tenant to a different unit.”
7. Visible signs of mold or mildew
Mold and mildew pose health hazards and can indicate underlying issues such as water leaks or poor ventilation. If you notice a musty odor or visible signs of mold during the apartment tour, it’s essential to address the issue with the landlord and ensure it’s properly dealt with before moving in.
8. Unusual payment requests
Be cautious if the landlord requests payment methods that seem unusual or suspicious, such as cash-only payments or payments to a personal account rather than a professional property management company. Legitimate landlords typically accept payments through standard methods such as checks, bank transfers, or online payment platforms.
9. Excessive secrecy or evasiveness
If the landlord or property manager seems evasive or unwilling to answer your questions about the apartment, it could indicate they’re hiding something. Transparency is key in any rental agreement, so be wary of landlords who are unwilling to provide straightforward answers or disclose important information.
10. Unsatisfactory amenities or facilities
Take a close look at the amenities and facilities offered by the apartment complex. Are they well-maintained and clean? Do they meet your expectations? If the amenities fall short or appear neglected, it could be a sign of poor management and a lack of concern for tenants’ comfort and satisfaction.
“Check online reviews to see how current and former tenants rate the apartment complex in terms of amenities, handling of maintenance requests and property management staff,” says Stephen J. Anthony of Anthony Law Group. “If there are many bad reviews, this can be a good indicator of serious problems with how the apartment complex is managed that you do not want any part of as a tenant.”
11. High turnover rate
Lastly, inquire about the turnover rate of tenants in the building or complex. A high turnover rate could indicate underlying issues such as dissatisfaction with the property, difficult landlords, or maintenance problems. While some turnover is normal, excessive turnover should raise concerns about the quality of the living experience.
Being observant during the apartment hunting process can help you avoid potential pitfalls and find an apartment that meets your needs and expectations. By paying attention to these 11 red flags, you can make an informed decision and enjoy a positive renting experience
Millennials are a favorite societal punching bag for things like destroying industries — including diamonds and casual chain restaurants — and being cringe. But another gripe some have with Generation Y is that they believe millennials aren’t having enough kids, or any kids at all.
Of millennials who are opting out, many are doing so because raising children is simply too expensive. A new NerdWallet survey finds that just a quarter of parents of minor children (25%) plan to have more children and only 27% of non-parents under age 60 plan to have any children at all. Of millennials (ages 27-42) who aren’t parents, just 25% say they plan to have kids, while 61% don’t and 14% aren’t sure. When millennials who don’t have kids or plan to have kids were asked why, nearly 2 in 5 (38%) said it’s because the overall cost of raising a child is too high.
How much are millennial parents paying for child care?
One major expense parents may have to contend with, at least in the early years, is child care. According to the NerdWallet survey, millennial parents who pay for full-time child care — care at least four days a week — report paying $665.70 a month, on average, per child. Nearly a quarter (23%) are paying $1,000 or more a month, per child.
The estimated median U.S. household income is $77,221 for 2023, according to NerdWallet’s household debt analysis. Assuming monthly child care costs of $665.70, or $7,988 annually, that represents more than 10% of gross income, per child. That’s if you make the median income, if you don’t pay more than the surveyed average for child care and if you only have one child. Plus, child care is only one expense, albeit one of the pricier kid costs you’ll likely have. It’s no wonder the survey found that a quarter of millennial parents of minors (25%) identify child care costs as their biggest financial stressor.
Options for cutting child care costs
If you’re currently struggling to pay for child care, or child care costs are holding you back from having children, there are ways to get these expenses down. Some are more ideal and some are less so, and all depend on what you want for your and your child’s life.
According to the survey, nearly 4 in 5 millennial parents of minors (79%) took steps to lower child care costs, like working opposite shifts from their partner so they didn’t need child care (20%) and working from home while caring for their children (17%). The hard truth is that sacrifices are often made in service of keeping child care within budget, and some of them could require major upheaval. Here are some other ways parents have cut down on child care costs.
Use accounts and programs available to you. The survey found that 15% of millennial parents of minors used a dependent care FSA to pay for child care. The dependent care flexible spending account (DCFSA) allows you to deposit up to $5,000 pretax per household to be used for child care expenses within a given year. Look into the benefits your employer provides to see if you have access to a DCFSA to put some money aside for child care and lower your taxable income.
It’s also a good idea to see if you can apply for need-based financial assistance for child care costs, particularly if your family qualifies as low-income. One-tenth of millennial parents of minors (10%) say they receive/received need-based assistance for child care costs, according to the survey. You can also ask local child care centers if they offer scholarships and, if so, what criteria they use to determine eligibility.
Seek out a lower-cost child care option. According to the survey, 15% of millennial parents of minors used a lower-cost alternative to a day care center, like a co-op or home-based day care. Home-based child care may be more affordable than traditional child care centers or a dedicated nanny. This option could provide your child with a cozy environment to spend their days in with a tight-knit group of kids. A few things to know: In-home child care may include mixed-age groups and could lack a structured curriculum, compared with center-based options. Also, your point of contact for any issues at a co-op or home-based day care will be the provider themself; there likely won’t be a corporate office or formal administrator like you might find at a day care center.
Move closer to family, or to a more affordable community. The survey found that 17% of millennial parents of minors say they moved closer to their or their partner’s family to get help with child care, while 10% moved to a location with cheaper child care. This may be ideal for those parents who already want to move, particularly for those who want to be closer to family and whose family has offered assistance with child care. Whether this works for you will likely depend on your job, social and property ties in your current location, familial relationships and willingness to relocate.
Leave the workforce temporarily. According to the survey, 13% of millennial parents of minors say they left the workforce to take care of their children and 13% say their partner left the workforce. This is a highly personal decision. If you or your partner wants to be a stay-at-home parent and the other partner can earn enough to support the family, it could be a good idea. If this isn’t something you particularly want, but you’re open to the possibility, do the calculations to figure out which path makes most financial sense. Make sure to factor in the costs of missing years of career training, promotions and raises, and the challenges of reentering the workforce after several years away.
Wait it out. If you can cover child care costs but have to temporarily scale back on other financial goals to do so, that’s OK. While the hefty bill can be hard to stomach, most children won’t require long-term child care, at least not on a full-time basis. So if you can swing it, it might be worth it to cut back on other things for now and make plans for how to reallocate those funds toward making financial progress when your child no longer needs that full-time care.
Selling your house is often one of the largest financial transactions you’ll make in your life. It can be complex and emotionally challenging, especially if it’s your first time dealing with a home sale or if the house is full of family memories.
Despite these challenges, millions of people successfully sell their homes each year. The process is well-trodden, but each sale has its unique circumstances and can come with many curveballs.
Whether you’re downsizing, upgrading, relocating, or just ready for a change, selling your house is a big step. The task might seem daunting, but remember, you’re not alone. Many resources can guide you through this process, providing advice and support along the way.
This guide aims to simplify the process and provide you with step-by-step instructions to help sell your house.
From setting your objectives to finally handing over the keys, we’ll walk you through each stage. We will address common challenges and offer expert insights to ensure you’re well-prepared for the journey ahead. Our goal is to help you sell your house at the best possible price within your desired timeline, while minimizing stress and maximizing satisfaction.
Understand Your Selling Objectives
The first step in any successful real estate transaction is understanding your motivations and objectives for selling. Be clear about your goals and timeline to create a selling strategy that will get you the price you want for your home within the timeframe desired.
Why are you selling?
Your motivations for selling might be tied to lifestyle changes, financial circumstances, or relocation for work. Perhaps you’ve outgrown your current house, or maybe it’s become too big after the kids have moved out. You might need to relocate for a new job or prefer a change in scenery as you approach retirement. By identifying your reasons for selling, you’ll have a clearer idea of what you want to achieve with the sale.
What’s your timeline?
Your timeline can significantly influence your selling strategy. If you’re in a rush due to reasons like a job relocation or closing on another home, you may have to price your property more competitively to attract a faster sale. However, if you have the luxury of time, you can afford to be patient and wait for an offer that matches your ideal price.
Evaluate Your Financial Position
Understanding your financial situation is essential in the home-selling process. A realistic view of your finances will help you make informed decisions, particularly in setting a reasonable asking price.
Understand Your Home Equity
Equity refers to the portion of your property that you truly “own” – it’s the difference between the current market value of your home and the remaining balance on your mortgage. Knowing your equity can give you an idea of your potential profits from the sale.
Consider Your Outstanding Mortgage
The amount left on your mortgage is another critical factor. If your outstanding balance is more than your home’s sale price, you may need to consider a short sale, which requires your lender’s approval and can affect your credit score.
Estimate Closing Costs
Closing costs are the fees and expenses you pay to finalize your home’s sale, excluding the commission for the real estate agent. They may include title insurance, appraisal fees, and attorney fees, among other costs. These are usually about 2-5% of the purchase price. Understanding these costs is crucial as they directly impact your net proceeds from the sale.
Taking the time to clarify your selling objectives and understanding your financial position will pave the way for a more streamlined and successful home-selling experience. These factors are not just critical for setting a realistic asking price but also for aligning your home sale with your larger financial or life goals.
Prepare Your House for Sale
Once you’ve identified your selling objectives, the next step is to prepare your house for the market. A well-prepared home can catch the attention of more prospective buyers and even command a higher sale price.
Home Improvements and Necessary Repairs
Before you list your home, assess its overall condition. Some minor upgrades and necessary repairs can significantly enhance your home’s appeal, often leading to a faster sale or higher selling price.
Deep Cleaning and Carpet Cleaning
Begin with a deep clean to ensure your home looks its best. Pay attention to often-overlooked areas, such as baseboards, window sills, and ceiling fans. If you have carpets, consider hiring a professional carpet cleaning service to remove any stains or odors. Cleanliness can significantly influence a buyer’s first impression.
Minor Upgrades and Fixes
Next, tackle minor upgrades and repairs that could deter potential buyers. This could include painting walls with a fresh, neutral color, fixing any plumbing or electrical issues, and ensuring all appliances are in working order. Although these tasks may seem small, they can make a big difference to potential buyers.
Stage Your House
Staging your house involves preparing it for viewing by potential buyers. It can significantly impact how quickly your home sells and the price.
Hire a Professional Stager
A professional stager, although an extra cost, can be a worthwhile investment. For a few hundred dollars, they can transform your space and make it appealing to as many potential buyers as possible. They use strategies like optimal furniture placement, accentuating natural light, and choosing neutral decor to make your home attractive and inviting.
Depersonalize Your Home
Part of effective staging involves depersonalizing your home. This means removing personal items like family photos, collections, and mementos. The aim is to create a neutral space where potential buyers can easily envision themselves and their own belongings. It’s all about helping buyers picture your house as their future home.
In the competitive real estate market, first impressions count. By investing time, money and effort in staging your house for sale, you can stand out from the competition and make a great impression on prospective buyers. These preparations could translate into a quicker sale and potentially a higher price.
Set the Right Price
One of the most critical decisions in the home-selling process is determining the right asking price. Setting a competitive price can help attract more prospective buyers, shorten the time your home spends on the market, and potentially yield a higher sale price.
Understand the Importance of Pricing
Choosing the right price is not just about the amount you’d like to receive. It’s also about understanding buyer psychology and local market trends. Pricing your home correctly can result in more interest, more showings, and ultimately, more offers.
Get a Comparative Market Analysis
A key tool for setting the right price is a Comparative Market Analysis (CMA). A CMA provides information about recent home sales in your area, adjusted for differences in features and conditions, giving you a good idea of what buyers might be willing to pay for your home.
Hire a Great Real Estate Agent
A great real estate agent can provide an accurate and comprehensive CMA. They have the experience and local market knowledge to understand which homes are truly comparable to yours and how various features and upgrades impact pricing.
Consider Comparable Sales
Comparable sales, or “comps,” are recent home sales in your area that are similar to your property in size, condition, and features. Your real estate agent will look at these comps, adjust for differences, and use the information to guide you towards a fair and attractive list price.
Adjust for Features and Conditions
Every home is unique, and its features and condition will impact its value. Your real estate agent will consider these factors when setting your home’s list price. For example, if your home has a new roof or a remodeled kitchen, it might command a higher price compared to a similar home without these upgrades.
Setting the right price is both an art and a science. It requires an understanding of the local real estate market, an evaluation of comparable sales, and an assessment of your home’s unique features. By enlisting the help of a great real estate agent and leveraging their expertise, you can set a competitive price that will attract serious buyers and maximize your profits.
Market Your House
Once your house is ready for sale and priced right, the next step is to get the word out to prospective buyers. Effective marketing can attract more interest and lead to quicker, more competitive offers.
Use High-Quality Professional Photos
Professional photography plays a crucial role in marketing your house. High-quality photos can showcase your home’s best features and give potential buyers a good first impression. Homes listed with professional photos tend to receive more views online, which can lead to faster sales and often at higher prices.
Craft a Compelling Listing Description
A well-written listing description can spark interest and invite potential buyers to learn more. Highlight your home’s unique features, recent upgrades, and what makes it special. Remember, you’re not just selling a property, you’re selling a lifestyle. Allow your real estate agent to offer feedback and help you create an enticing, optimized listing that will also show up in search results when people are looking for a home like yours.
Host Open Houses and Private Showings
Open houses and private showings are opportunities for potential buyers to experience your home in person. Be flexible with your schedule and make your house available for viewing as often as you can. The more people who walk through your door, the better your chances of receiving an offer.
The Role of a Good Real Estate Agent in Marketing
Marketing a house involves a significant time commitment and a specific set of skills. This is where a good real estate agent comes into play.
Leverage the Multiple Listing Service (MLS)
A good real estate agent can list your property on the Multiple Listing Service (MLS), a database of homes for sale that’s used by real estate professionals. An MLS listing can increase your home’s visibility, attracting other real estate agents and their clients.
Find a Realtor with A Proven Track Record
Choose a real estate agent with a proven track record of sales in your area. Their experience and local market knowledge can be invaluable in promoting your home effectively and attracting serious buyers.
In a crowded real estate market, standing out is key. By leveraging professional photography, crafting a compelling listing description, and utilizing the expertise of a good real estate agent, you can market your home effectively, attracting more potential buyers and increasing your chances of a successful sale.
Evaluate Offers and Negotiate
Once your marketing efforts start paying off and offers begin to come in, it’s time to shift focus to negotiation. The goal here is to achieve the best possible terms that align with your selling objectives.
How to Evaluate Offers
When you receive an offer, it’s essential to look beyond the offered price. While the highest offer might seem the most appealing, it’s not always the best choice.
Consider the Buyer’s Lender
Understanding where the buyer’s financing comes from is important. Offers from buyers who are pre-approved by a well-known lender may carry less risk than those from buyers who are not pre-approved or who are using a less established lender.
Assess the Down Payment
The size of the buyer’s down payment can indicate their financial stability. A larger down payment may suggest that the buyer has solid finances and is serious about purchasing your home.
Understand the Buyer’s Timeline
A buyer’s timeline can be just as important as their offered price. A qualified buyer who can close quickly might be more attractive than a higher offer that’s contingent on selling a current house.
How to Manage Multiple Offers
Receiving multiple offers can be exciting, but it can also be overwhelming. Your real estate agent can help you with this process.
Consult with Your Real Estate Agent
Your real estate agent’s experience can be invaluable in this situation. They can guide you through your options, help you compare offers side by side, and give advice based on their understanding of the current real estate market and the specifics of each offer.
Make the Best Decision Based on Your Needs
When reviewing multiple offers, it’s important to consider your own needs and priorities. For example, if you need to sell quickly, you might prioritize a buyer who can close sooner, even if their offer is not the highest.
Negotiating and accepting offers can be a complex part of the selling process. It’s not just about accepting the highest offer, but understanding the nuances of each proposal and making the best decision for your circumstances. With the right real estate agent by your side, you can handle this process confidently and successfully.
Close the Sale
After you’ve accepted an offer, the next step is to finalize the transaction. The closing process involves several stages, including a home inspection, title search, potential repair negotiations, and final paperwork signing. Here’s what to expect:
The Due Diligence Period
The due diligence period allows the buyer to further investigate the property after their offer has been accepted. During this time, the buyer’s agent will arrange for a home inspection.
Home Inspection and Report
A professional home inspector will thoroughly examine your property and generate an inspection report. This document details the condition of the house and outlines any potential issues, from minor maintenance concerns to significant structural problems.
Negotiating Repairs
If the inspection report reveals necessary repairs, there may be further negotiations. Buyers might ask you to handle the repairs, reduce the sale price, or offer a credit at closing to cover the repair costs.
The Title Search and Insurance
As part of the home buying process, the buyer’s lender will work with a title company to conduct a title search. This ensures the house is free from liens or claims and that you have a clear title to transfer to the new owners.
Understanding Title Insurance
Buyers might also negotiate for you to pay for title insurance as part of the closing costs. Title insurance protects the buyer and their lender from future property ownership claims, unexpected liens, or undisclosed property heirs.
Sign the Final Paperwork
The last step in the home sale process is the closing meeting. Here, you’ll sign the final paperwork, which includes key documents such as:
The Bill of Sale
This document transfers the ownership of personal property (like appliances or furniture) included in the home sale.
The Deed
This legal document transfers ownership of the property from you, the seller, to the buyer.
Documents Prepared by a Real Estate Attorney or Real Estate Brokerage
The closing process involves many legal documents. These might be prepared by a real estate attorney or real estate brokerage to ensure everything is in order.
Closing the sale of your house can be a complex process. However, understanding each step can help you proceed with confidence and reach a successful conclusion to your home sale journey.
Post Sale Considerations
Even after the final paperwork has been signed, and the new owners have the keys, there are a few additional factors to consider. The sale of your house doesn’t just end at the closing table. Let’s delve into these post-sale considerations.
Understand the Tax Implications
Selling your house can have significant tax implications. The application of taxes largely depends on the profit you make from the sale and how long you’ve lived in the house.
Capital Gains Tax Exemption
If the house was your primary residence for at least two of the last five years before selling, you might qualify for a capital gains tax exemption. This can significantly reduce your tax liability.
Consult with a Tax Professional
However, tax laws can be complex, and every situation is unique. Consult with a tax professional or a certified public accountant to fully understand the potential tax impacts. They can provide guidance tailored to your specific circumstances.
The Move to Your New Home
Moving to your new home involves logistical and financial considerations. Plan ahead for moving costs, including professional movers, moving supplies, and potential temporary housing.
Keep Records of Your Home Sale Expenses
It’s wise to keep a comprehensive record of all home sale-related expenses. This includes real estate agent commissions, home improvements made before the sale, and any fees or costs associated with closing. These records can be crucial for your future tax returns or financial planning.
Some of your moving costs may be tax-deductible if you or a member of your household is in the military, and you are moving due to a military order. Previously, moving costs were tax-deductible for many people who were relocating due to a job. After 2025, these deductions may return.
Conclusion
Selling your house is a significant event, and educating consumers about the process can reduce stress and result in a better outcome. By preparing your home, pricing it right, and working with a competent real estate agent, you can complete the transaction smoothly and efficiently.
The selling process might seem overwhelming, but with thorough preparation and the right team on your side, it can be an exciting time. Remember, every house can sell, it just requires the right strategy, a competitive price, and a bit of patience.
Frequently Asked Questions
What should I do if my house isn’t selling?
If your house isn’t attracting buyers, various factors could be at play. The asking price may be too high, marketing efforts might be insufficient, or the house’s condition could be deterring potential buyers. Consult with your real estate agent to pinpoint potential problems and devise solutions. You may need to reduce the price, enhance your marketing strategy, or invest in necessary home improvements.
Can I sell my house myself instead of using a real estate agent?
Yes, selling your house yourself is an option. This is known as “For Sale By Owner” (FSBO). However, selling a house involves complex tasks like pricing, marketing, negotiating, and handling legal paperwork. Real estate agents possess the expertise and experience to deal with these challenges. If you opt for FSBO, be prepared for a significant time commitment and be ready to handle these tasks yourself.
How long does it usually take to sell a house?
The timeline for selling a house can vary greatly and depends on numerous factors, such as local market conditions, the home’s condition and price, and even the time of year. On average, it can take anywhere from a few days to a few months. Your real estate agent can give you a better estimate based on local trends and your specific situation.
What is a seller’s market, and how can it impact my home sale?
A seller’s market occurs when the demand for homes exceeds the current supply. This often results in homes selling more quickly and at higher prices. If you’re selling your house in a seller’s market, it can be an advantage as you may get multiple offers and a higher sale price.
Should I make repairs before selling my house?
Whether to make repairs before selling your house often depends on the type and extent of the repairs and the overall condition of your house. Small repairs and improvements, like painting or fixing leaky faucets, can make a good impression on buyers. If your home has more more substantial issues, discuss the repairs with your real estate agent to weigh the cost against the potential return on investment.
A personal trainer earns an average of $67,012 a year, according to the latest data from Salary.com. However, salaries typically fall somewhere between $48,347 and $82,320.
How much you can make as a personal trainer depends on several factors, including where you live, who you work for, your training experience, and your areas of expertise. Let’s unpack this.
What Are Personal Trainers?
A personal trainer develops customized exercise programs for clients based on individual skill levels, health goals, physical limitations, and other considerations. These professionals work with clients of all ages and skill levels to improve strength, flexibility, and endurance; complete workouts safely and without injury; support them on their weight loss journey; and more.
Trainers are often paid hourly, but they may earn a yearly salary if they work for a gym or high-end client. How much money a personal trainer makes depends on the range of services and level of attention they provide — in general, the more, the better.
It also helps if you have good people skills, as you’ll be working closely with clients. (Not much of a people person? You may want to look into jobs for introverts instead.) 💡 Quick Tip: When you have questions about what you can and can’t afford, a spending tracker app can show you the answer. With no guilt trip or hourly fee.
Check your score with SoFi
Track your credit score for free. Sign up and get $10.*
How Much Do Starting Personal Trainers Make an Hour?
The average entry-level wage for a personal trainer in the United States is $29 per hour, or $61,104 a year, according to ZipRecruiter. But depending on a host of factors, personal trainers can earn anywhere from $11.06 to $51.92 an hour.
So is it possible to make $100,000 a year or more as a personal trainer? Short answer: yes. A six-figure income may be attainable once you gain enough experience and establish a steady client base. But keep in mind that those things often take time to develop.
Recommended: What Is Competitive Pay?
What Is a Personal Trainer’s Yearly Salary by State?
Location can play a major factor in a personal trainer’s income. A professional who’s established in their career may earn an average of $67,012, but as the chart below shows, take-home pay can vary significantly from state to state.
The Average Personal Trainer Salary by State
State
Median Salary for a Personal Trainer
Alabama
$53,023
Alaska
$59,756
Arizona
$54,514
Arkansas
$45,525
California
$61,037
Colorado
$57,837
Connecticut
$53,361
Delaware
$66,789
Florida
$43,714
Georgia
$49,394
Hawaii
$57,813
Idaho
$58,505
Illinois
$53,350
Indiana
$55,666
Iowa
$53,072
Kansas
$49,804
Kentucky
$47,885
Louisiana
$48,567
Maine
$59,455
Maryland
$64,637
Massachusetts
$60,291
Michigan
$47,929
Minnesota
$55,627
Mississippi
$52,898
Missouri
$51,521
Montana
$53,693
Nebraska
$63,126
Nevada
$56,502
New Hampshire
$57,587
New Jersey
$58,470
New Mexico
$55,489
New York
$64,556
North Carolina
$49,937
North Dakota
$58,914
Ohio
$54,118
Oklahoma
$61,134
Oregon
$58,939
Pennsylvania
$59,132
Rhode Island
$54,591
South Carolina
$50,988
South Dakota
$55,680
Tennessee
$51,669
Texas
$58,217
Utah
$51,630
Vermont
$63,225
Virginia
$65,639
Washington
$71,304
West Virginia
$45,668
Wisconsin
$57,762
Wyoming
$56,523
Source: ZipRecruiter
Recommended: The Highest-Paying Jobs in Every State
Personal Trainer Job Considerations for Pay and Benefits
When you’re just starting out as a personal trainer, there are many factors that may influence the direction of your career. For instance, working at an established commercial gym can offer an opportunity to gain experience, build up a client network, and receive job benefits.
If you’re more of a self-starter and prefer a degree of independence, working as a self-employed personal trainer might be the better fit. You’ll have the ability to set your own hours and hourly rate; however, you’ll also have to pay for health benefits and set money aside for retirement.
Here are some questions to ask yourself when starting a career as a personal trainer:
• How many hours are you willing to work?
• Would you rather work for someone else or be your own boss?
• Do you need health insurance benefits?
• Where do you see yourself in five to 10 years?
• What type of clients do you want (ex. senior citizens, athletes)?
• Are you willing to commute or relocate?
• What additional certifications might you need?
• What are your financial goals?
Establish what you need to earn as a personal trainer in order to cover your expenses and maintain the lifestyle you want. It can help to sit down and create a budget.
As your personal trainer career gets going, you can lean on financial tools like a money tracker app to help you monitor your spending and saving.
Tips to Increase a Personal Trainer’s Salary
Clients can come and go for a number of reasons, but there are some things you can do as a personal trainer to keep the ones you have and attract new ones. Here are some strategies to consider:
• Listen to your clients, and be willing to adapt to their needs.
• Sharpen your motivational skills. Pay attention to other successful trainers and how they inspire their clients.
• Be empathetic. Many clients may struggle during their workouts, both physically and psychologically. Empathy can go a long way in maintaining healthy client relations.
• Go where you’re needed. Investigate niches where your expertise can be of use, be it an elderly care center, health center, or a new neighborhood gym.
• Network and market yourself. Chat up members at your gym and discuss their fitness goals. You can also promote your own fitness journey and methods on social media.
• Earn new certifications. Get certified in CPR, yoga, Pilates, and nutrition. The more you know, the more in-demand you may be.
Pros and Cons of Being a Personal Trainer
As with any job, there are pluses and minuses to working as a personal trainer. Here are some of the benefits and challenges of the field:
Pros:
• Flexible hours. You can often schedule clients when you want to.
• Professional control. You’re able to build up your business through marketing and networking, adding clients as you raise your earning goals.
• Staying physically fit. You’ll have to practice what you preach. Staying in shape is a job requirement.
• Personal satisfaction, especially when you help a client meet their goals.
Cons:
• Fluctuating income/job security. There’s no way to predict how many clients you may have month-to-month or year-to-year.
• Lack of benefits. Many personal trainers work for themselves and have to pay for their own health and dental insurance, plus save for retirement.
• Nontraditional work hours. Although you have the ability to make your own schedule, most of your working clients will likely request early morning, evening, or weekend sessions.
• Shorter career lifespan. Even the most in-shape trainer ages, and there may come a day where you struggle to physically keep up with your clients.
💡 Quick Tip: Income, expenses, and life circumstances can change. Consider reviewing your budget a few times a year and making any adjustments if needed.
The Takeaway
A personal trainer’s salary can rise and fall with the ebb and flow of clients, but there is also no limit to the amount of money you can make. Whether you are working with a few dedicated clients or creating your own global fitness brand, being a personal trainer can be a great way to earn a salary while keeping yourself and your finance goals in shape.
With SoFi, you can keep tabs on how your money comes and goes.
FAQ
What is the highest paying personal trainer job?
Personal trainers to wealthy clients and celebrities typically command lucrative salaries. The most popular fitness influencers on TikTok and Instagram, for example, can make over $1 million a year.
Do personal trainers make $100k a year?
A well-established personal trainer can make $100,000 a year with experience, marketing savvy, good time management skills, and a loyal client base.
How much do personal trainers make starting out?
The average starting wage for a personal trainer in the United States is $29 per hour, or $61,104 a year.
Photo credit: iStock/Drazen Zigic
SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.
*Terms and conditions apply. (Must click on the link to be eligible.) This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the Rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed into SoFi accounts such as cash in SoFi Checking and Savings, SoFi credit cards or loan balances, and fractional shares subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Your first home has served you well, but now you’re ready to move on. What can you expect as a second-time homebuyer? Whether it’s been years or decades since you bought your home, you’ll find some aspects of the home buying process similar and others quite different.
With this guide, you’ll dive into the world of second-time home buying so you can feel confident taking the next step in your homeownership journey.
Defining a Second-Time Homebuyer
So, who exactly is a second-time homebuyer? A second-time homebuyer is someone who has previously owned a home and is purchasing another one. They may be moving with the desire to upsize, downsize, relocate or enhance their lifestyle. Or they may be interested in buying an investment property or vacation home.
Benefits of Being a Second-Time Homebuyer
Second-time homebuyers enjoy several advantages, including the following:
They may have a clearer understanding of the home buying process.
The sale of their current home may provide a source of down payment funds on their second home.
They may have a more established financial situation and credit history, potentially increasing their loan options.
When Are You Considered a First-Time Homebuyer Again?
It’s important to note that not all previous homeowners are considered second-time homebuyers. If you’re applying for a conventional loan, you could qualify as a first-time homebuyer if you meet the following criteria:
You have not owned a principal residence in the last 3 years.
You have not owned a home jointly as a married couple within the last 3 years (if you owned a home but your spouse hasn’t, you can still qualify).
You’re a single parent who has only owned a house with a former spouse while married.
You have only owned property prior to applying that didn’t comply with building codes.
You have only owned property that didn’t have a permanent foundation.
First-time homebuyer status could give you access to certain programs that offer closing cost aid, down payment assistance, tax benefits and other types of support.
If you currently have a Federal Housing Administration (FHA) loan, you may be able to take out another FHA loan for a new primary residence.
The Mortgage Process
The mortgage process for a second-time homebuyer generally follows the same steps as a first-time homebuyer. As with your first mortgage, a lender will evaluate the following during the underwriting process:
Credit score
Liquid reserves
Available funds for down payment
Proof of income
However, if you haven’t applied for a mortgage within the last 15 years, you may notice some differences:
Depending on the loan program, the credit score requirements may be more stringent.
More documentation may be required.
There may be more rigorous underwriting practices to evaluate a borrower’s creditworthiness, financial stability and ability to repay the loan.
Much of the application process can be conveniently conducted entirely online.
Potential for No Down Payment
While most mortgages require a down payment, you may qualify for a zero-down payment VA loan if you’re a veteran, service member or military family. With a VA loan, there are:
No down payment on home purchase loans*
Lower closing cost limits
Lower interest rates
Relaxed credit requirements
No monthly mortgage insurance premiums
Already have a VA loan for your first home? As long as your new home will be your primary residence, you may be eligible for another VA purchase loan.
Keep in mind that the less you put down, the greater your monthly mortgage payment will be, and you’ll be paying more in interest over the long term.
Selling Your Current Home and Buying a New One
While it is common to sell your current home and buy your new one simultaneously, you may choose to do one transaction before the other.
Selling Before Buying Pros and Cons
Most people choose to sell before buying, which offers the following benefits:
You can access the equity and any profits from your current home to buy your next home, without having to include a contingency clause.
A contingency clause in the purchase contract allows you to back out of a contract if the sale of your current home doesn’t go through within a specified timeframe.
Coordinating this can be tricky, however. If your home fails to sell, your new home closing may be affected.
You won’t be responsible for paying two mortgages at once.
You can take your time negotiating with prospective homebuyers.
There are a few drawbacks to be aware of, including:
You’ll require temporary housing and storage.
Interest rates could rise as you search for your new perfect place.
You’ll need to pay for moving costs twice, once to your temporary home and storage, and again to the new home.
Buying Before Selling
If you choose to buy your new home before selling your current one, you will:
Avoid paying for temporary housing or an expensive storage unit
Usually have up to 60 days after closing to move in, so you can take your time furnishing and remodeling
Be able to act fast when you find your ideal home
Some of the disadvantages of taking this route include:
If your current home doesn’t sell quickly, you run the risk of having to carry two mortgages at the same time.
Purchasing a new home while carrying your current loan without selling makes it extremely difficult to qualify for a mortgage. Since you are carrying two mortgages, your debt-to-income ratio can be very high.
Other home expenses, such as property taxes, utilities, homeowners insurance and often costly homeowners association (HOA) dues, will also continue until you sell.
You won’t be able to use your home’s sale proceeds for your purchase and may need other financing, such as a bridge loan or home equity loan.
Best Practices on How to Sell Your House
Whether you sell or buy first, you’ll need to get your current home market-ready. Here are some best practices and tips for home-selling success.
Research the housing market. The housing market plays a significant role in the home-selling process. It impacts your pricing strategy, potential time on the market, competition and negotiating power.
For example, in a buyer’s market, homes tend to remain listed for longer and may sell at a lower price. This is great for you as a buyer but not as a seller. You’ll want to price your house competitively, make necessary repairs and stage your home to attract buyers. You may also need to offer buyer incentives, such as paying for some closing costs.
On the other hand, during a seller’s market, strong demand for homes can create bidding-war conditions. You may attract eager buyers willing to pay a premium for your home. Plus, you may sell quickly, providing the down payment funds to purchase your new home soon.
Find a reputable and licensed real estate agent. While you may have used a real estate agent to find your first home, hiring one to sell your current house is a good idea. Selling a home involves many moving parts, and a real estate agent can guide you through the process. They are knowledgeable about market conditions, marketing, negotiating and the steps required to achieve a positive outcome.
Locate a lender. Secure an experienced lender that can help you with your mortgage once you’re ready to purchase a new home. You’ll want to find one that offers a range of loans and competitive rates, as well as a written commitment to lend you a specific amount of money, subject to certain conditions. This type of certification, such as a Pennymac BuyerReady Certification,* demonstrates that you are a serious buyer and can give you the confidence that you’ll be able to obtain the funding you need.
Deep clean, declutter and stage your home. Present your home in its best light by deep cleaning, decluttering and staging. These three steps enhance the visual appeal of your home, create a welcoming atmosphere and allow buyers to envision their belongings in the space.
Make repairs and updates. Potential buyers will be looking for a home in good condition. Make sure your exterior and landscaping are well maintained. Fix broken fixtures, give walls a fresh coat of paint and verify your plumbing, HVAC and electrical systems are all working properly. Consider getting a home inspection before putting your home on the market to identify priority projects. Your real estate agent is also an excellent resource for determining which repairs and updates you should focus on.
The Home Buying Process the Second Time Around
The second-time home buying and mortgage process is similar to that of a first-time homebuyer. You’ll need to:
Prepare financially
Search and find a property
Make an offer and negotiate
Get a home inspection
Finalize the mortgage
Close and move in
But while the process is basically the same, some other factors, such as those below, may have changed and will influence your next home purchase.
Financial Aspects to Consider
As you navigate the second-time buying process, take into account the following financial considerations:
Shifted market conditions. The real estate market might have changed dramatically since your first home purchase. For example, if you purchased your current home in a buyer’s market, you perhaps had a lot of options and negotiating power. If it’s a seller’s market now, you might encounter tight inventory. Listed homes will sell rapidly, and you may need to be prepared to pay more and forego contingencies to get the home you want.
Your financial situation. How has your financial status evolved over the years? Has your income increased? What expenses do you have now that you didn’t have when you bought your home? Your current financial health will play a role in what loans you will qualify for.
Mortgage underwriting changes. Over the past 15 years, mortgage qualifications have become more stringent and interest rates may have changed significantly. However, if your financial circumstances have improved, you may have increased financing opportunities.
Down Payments and Benefits
As a second-time homebuyer, you can take advantage of all that equity you have built over the years and put it toward your new home. After closing, you’ll receive the proceeds from your home sale minus any outstanding mortgage balances and transaction costs. You can use those proceeds, as well as any additional savings, for a down payment.
Exploring Second-Time Homebuyer Programs
While there are many programs to help first-time homebuyers, there are some that assist individuals in purchasing their second home. Visit the U.S. Department of Housing and Urban Development (HUD) or a local government website to explore options in your area. And remember, if you meet first-time homebuyer criteria, don’t rule out first-time homebuyer programs.
In terms of mortgages, second-time homebuyers have numerous options, including conventional, FHA and VA loans. A Pennymac Loan Expert can help you compare loans and work with you to find the one that best fits your needs.
Key Differences Between First and Second-Time Buying
The main differences between first-time and second-time home buying are typically related to mortgage considerations, market conditions and experience.
The Requirements and Challenges
As a second-time homebuyer, you will not be eligible for grants and other initiatives that aim to assist first-time buyers in obtaining down payment funds. This means that you will likely need some down payment. If you are selling your home, you can use the sale proceeds for your down payment.
Today’s stricter underwriting practices, including more stringent credit standards, are aimed at protecting consumers and the housing market. However, individuals with credit challenges may find it more difficult to qualify for a favorable home loan.
Experience Factors
You can leverage your prior experience as a second-time homebuyer. You’ve been through the home buying and mortgage process and may be familiar with the documentation required and the timeline involved. And while the process and market have evolved over the years, your knowledge can equip you with valuable insights and confidence throughout the journey.
Frequently Asked Questions (FAQs)
Check out these FAQs for answers to some of the most common questions that second-time homebuyers have about mortgages.
Can a Second-Time Home Buyer Get an FHA Loan?
Yes, Federal Housing Administration (FHA) loans are available to qualified homebuyers who wish to put less than 20% down on their home purchase. Income, debt and credit history requirements are more flexible than conventional mortgages.
FHA loans are also a great option for borrowers who may want to put more than 20% down. They allow for a 580 credit score, whereas conventional loan pricing gets expensive the lower the credit score is.
What Are the Common Requirements for Second-Time Buyers?
Common requirements for second-time homebuyers depend on the type of loan, but a lender will consider your credit score, income, debt and down payment when evaluating your mortgage application.
Are There Specific Programs or Grants Available for Second-Time Buyers?
Yes, Federal Housing Administration (FHA) loans and VA loans are available to second-time buyers. States and local governments may also offer programs to help second-time homebuyers. Check the U.S. Department of Housing and Urban Development website or your local government website to explore available options in your area.
Make the Move to Your Next Home With Confidence
Moving to your next home is exciting, but being prepared before diving into the home-selling and buying process is essential. Reach out to a Pennymac Loan Expert who will help guide you through the mortgage process, answer your questions and discuss a variety of competitive rates and loan options.
*As long as the sales price does not exceed the appraised home value.
**Customers with a Pennymac BuyerReady Certification prior to locking any Pennymac purchase loan get $1,000 applied as a discount off total closing costs and/or principal curtailment, subject to investor guidelines. Excludes Jumbo, refinance, third-party and in-process loans. Offer subject to change or cancellation without notice.
A condo is a privately owned unit in a community of other units, often with shared areas or amenities. If you’re considering whether to buy or rent a condo, you’ll want to think about the costs, benefits, and responsibilities of each option.
Of course, those who are deciding whether or not to rent have much less riding on their choice, but it’s still worth delving into the pros and cons of this kind of property and if it suits your needs.
Here, you’ll learn about the characteristics that define condos, the pros and cons of these units, and what it’s like to rent or buy a condo.
What Is a Condo?
As noted above, a condo is a privately owned unit that is part of a community of other units, whether that means there are a couple of other residences or dozens. Typically, a condo owner only possesses their unit, unlike the situation with a single-family homeowner, who owns the home and the land under it.
You may be familiar with condos that are rented out for income. If you’ve ever rented an apartment in, say, a complex by the beach, with a shared pool and patio, there’s a chance you’ve been in a condo. Real estate investors often buy condos and rent them out in this way. 💡 Quick Tip: You deserve a more zen mortgage. Look for a mortgage lender who’s dedicated to closing your loan on time.
Characteristics of a Condo
Individual condo units are owned by private owners, while common areas are owned and maintained by an association or organization. This might be called a condo association (CA) or a homeowners association (HOA). These groups are not identical, but they do manage a multi-unit residential community.
Your ownership rights may be limited to the space within your condominium, as is the case with most condo high-rises, or you may own an entire standalone structure within a larger community. In a condo situation, the CA or HOA owns the land. In a planned unit development, the homeowners own their lot and share the common area.
Maintenance and Finances of Condos
Condos are popular starter homes, thanks to their low maintenance, relatively cheap purchase price, and general convenience. They may also appeal to investors and people who are downsizing.
With detached single-family homes, you’re on the hook for the bill if any repair issues arise, whether it’s a broken water heater, leaky roof, or malfunctioning air conditioner. This generally isn’t the case with condos, as the property management company employed by the CA or HOA maintains common areas and shared amenities.
Convenience comes with a price, though. Condo owners share maintenance costs, and the expense of a master insurance policy, by paying dues monthly or quarterly. It’s important to budget for these costs. HOA fees,for example, have recently been rising 10% per year. Atop those fees, special assessments can be levied if the HOA needs to pay for a major project.
Condos tend to appreciate at a slower rate than traditional single-family homes, but they cost less. So buyers may want to take both realities into consideration when deciding on house vs. condo.
Recommended: First-Time Homebuyers Guide
Types of Condos
Condos vary widely in structure and appearance, ranging from high-rise buildings to communal developments. Take a closer look:
Condo Developments
These are communities of standalone homes where maintenance of both the interior and exterior are carried by the condo owner, but services like the maintenance of common areas and snow removal are typically handled by a property management company.
All properties within a condo development are bound by the rules of the CA or HOA, so it’s similar to a traditional neighborhood with fixed rules and less upkeep.
Condo Buildings
These are high-rise apartments consisting of individual condo units. The maintenance of the structure, shared utilities, and common areas are the responsibility of the property management company.
If you’re looking at buying or renting an apartment in a large metropolitan area, make sure you understand what it means to choose between a condo and a co-op.
High-rise condo buildings are more common in urban areas and may have higher fees in order to cover the greater costs of maintaining an apartment building and often the salaries of full-time maintenance staff members and doormen.
Pros and Cons of Condos
Next, take a look at the pros and cons of a condo.
Pros of Condos
Here are the upsides of condo life:
• Less maintenance since the CA or HOA is responsible for many aspects of upkeep.
• Affordability. Since you don’t own the land, the price can be lower.
• Possible investment opportunity; can use a condo for rental income.
• Security. Some people appreciate having a condo staff and neighbors nearby.
• Social life. You’re part of a community and will likely know and connect with your neighbors to some extent.
• Amenities. There are often such features as gyms, pools, dog run, coworking space, party rooms, and other perks to enjoy.
Cons of Condos
Next, consider the potential downsides of a condo:
• Association rules. You have to adhere to the guidelines of the community, which may or may not suit you. This can include everything from the appearance of your home’s exterior to when and for how long you may rent your place out.
• Higher interest rates. If you are shopping for a condo to purchase, you may find that the mortgage rates are somewhat higher than what you’d be quoted if you were buying a single-family home.
• Investment risk factor. If you are buying a condo, its value could depend to some extent on other residents and how well they maintain their property.
• Lack of privacy and land. You will have neighbors…so the experience is different from being in your own single-family home on your own land. And you likely won’t have acres of property to plant and use as you wish.
• Rising costs. Your association payments can rise considerably, and assessments are possible as well. That can throw a wrench in your budget.
Recommended: Most Affordable Places to Live in the US
Buying or Renting a Condo: Which Is Better?
Whether you’re better off buying or renting a condo — or any of the other types of houses, from modular home to manufactured home, tiny house to townhouse — depends as much as your own circumstances as it does the cost of buying vs. renting in an area.
• Buying: Assuming you’ve decided to settle down in an area for the next three to five years, you might be better off buying a condo if you have a stable income stream and can cover the down payment and closing costs without emptying your emergency fund.
Given how real estate values have risen in the past few years, buying a condo may be a good choice if you’re looking for long-term investment and a chance to build home equity over time.
• Renting: You may be better off renting if there’s a chance you’ll need to relocate within the next few years, or if any upcoming life events might require you to upsize your residence, like having children.
Here’s a closer look at these scenarios.
Pros of Renting a Condo
Renting a condo gives you all of the benefits of living in a private condo unit without the long-term commitment and upfront costs.
• Few maintenance responsibilities: If you’re renting a condo unit in an apartment building, the association is responsible for maintenance, or in the case of an individually owned HVAC system, the owner is.
• More leeway for negotiation: Reliable renters are hard to come by; some condo owners may be more willing to negotiate your monthly rent than professional property managers are.
• Flexibility to end or extend your lease: As a renter, you can often decide whether to end or continue your lease. This makes it easy to cut ties if needed.
Pros of Buying a Condo
Taking out a mortgage to buy a condo more or less freezes your living costs into the future. This will help you avoid rising rents, though association fees can certainly rise.
• More affordable than single-family homes: The price of a condo is usually lower than a single-family home in a given area. This makes it attractive to homebuyers on a budget.
• Freedom to make it your own: Owning a condo gives you more freedom over such features as the appliances and color palette than you’d likely have with a rental.
• Rental potential: Depending on the rules of your association, you may have the right to rent out your condo to generate income.
Finding a Condo
If you’re ready to go out and shop for a condo, you’ll want to assemble a list of must-haves to narrow your search. This applies whether you’re looking to rent or buy.
Are you looking for a more affordable apartment condo or something with more space like a community development? Browse local listings for condo units that match your requirements.
For those seeking to buy a condo, it’s a good idea to find a real estate agent who’s well versed in condo sales. They know the area and can obtain vital info regarding association rules and financials. It’s important to review the rules and fees, and check for any special assessments and their frequency over the years.
Condo Tips
A few more suggestions as you start your hunt:
• If you are planning to buy, it’s also a good idea to thoroughly understand mortgage basics and have financing lined up with a mortgage company so you’re ready to make a bid on a property.
• Know your budget. A mortgage calculator is an excellent tool for helping you figure out your costs.
• Consider checking this HUD site for FHA-approved condos as your primary residence if you are seeking financing with an FHA loan.
💡 Quick Tip: Keep in mind that FHA home loans are available for your primary residence only. Investment properties and vacation homes are not eligible.1
The Takeaway
What is a condo? A condo is a privately owned unit within a community that can be a good starter home or a place to downsize. Or it might be a wise investment property that can bring in rental income. If you’re able to rent a condo, it’s much like renting an apartment, except your landlord may be the owner.
If you’re interested in buying a condo, realize that condo buyers are able to access the same kinds of loans available to buyers of single-family homes, though rates may be slightly higher.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% – 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It’s online, with access to one-on-one help.
SoFi Mortgages: simple, smart, and so affordable.
FAQ
What’s the difference between an apartment and a condo?
A condo can be a kind of apartment, which is a residential unit that’s part of a larger building. An apartment can be owned or rented, as can a condo. However, a condo is a specific kind of unit ownership in which there are communal facilities and shared maintenance charges.
What is the difference between a condo and a townhouse?
With a condo, you own your unit but not the land under and around it. You pay for your unit (rent or mortgage). Association charges cover maintenance and repairs, and property taxes apply to owners. With a townhouse, the property includes the residence and the land it sits on and that surrounds it. You will pay your rent or mortgage and real estate taxes, but may not be part of an association or obligated to pay those fees.
Is a condo the same as a flat?
Many people use the terms condo, apartment, and flat interchangeably. While an apartment and a flat are the same thing, a condo refers to a style of ownership of a dwelling unit that’s part of a community. It may be an apartment, but the way it’s bought or rented can differ.
Photo Credit: iStock/Edwin Tan
*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
SoFi Loan Products SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC). For additional product-specific legal and licensing information, see SoFi.com/legal. Equal Housing Lender.
SoFi Mortgages Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.
You can sense it in the ubiquitous “Help Wanted” posters in artsy shops and restaurants, in the ranks of university students living out of their cars and in the outsize percentage of locals camping on the streets.
This seaside county known for its windswept beauty and easy living is in the midst of one of the most serious housing crises anywhere in home-starved California. Santa Cruz County, home to a beloved surf break and a bohemian University of California campus, also claims the state’s highest rate of homelessness and, by one measure based on local incomes, its least affordable housing.
Leaders in the city of Santa Cruz have responded to this hardship in a land of plenty — and to new state laws demanding construction of more affordable housing — with a plan to build up rather than out.
A downtown long centered on quaint sycamore-lined Pacific Avenue has boomed with new construction in recent years. Shining glass and metal apartment complexes sprout in multiple locations, across a streetscape once dominated by 20th century classics like the Art Deco-inspired Palomar Inn apartments.
And the City Council and planning department envision building even bigger and higher, with high-rise apartments of up to 12 stories in the southern section of downtown that comes closest to the city’s boardwalk and the landmark wooden roller coaster known as the Giant Dipper.
“It’s on everybody’s lips now, this talk about our housing challenge,” said Don Lane, a former mayor and an activist for homeless people. “The old resistance to development is breaking down, at least among a lot of people.”
Advertisement
Said current Mayor Fred Keeley, a former state assemblyman: “It’s not a question of ‘no growth’ anymore. It’s a question of where are you going to do this. You can spread it all over the city, or you can make the urban core more dense.”
But not everyone in famously tolerant Santa Cruz is going along. The high-rise push has spawned a backlash, exposing sharp divisions over growth and underscoring the complexities, even in a city known for its progressive politics, of trying to keep desirable communities affordable for the teachers, waiters, firefighters and store clerks who provide the bulk of services.
A group originally called Stop the Skyscrapers — now Housing for People — protests that a proposed city “housing element” needlessly clears the way for more apartments than state housing officials demand, while providing too few truly affordable units.
City officials say the plan they hope to finalize in the coming weeks, with its greater height limits, only creates a path for new construction. The intentions of individual property owners and the vicissitudes of the market will continue to make it challenging to build the 3,736 additional units the state has mandated for the city.
“We’ve talked to a lot of people, going door to door, and the feeling is it’s just too much, too fast,” said Frank Barron, a retired county planner and Housing for People co-founder. “The six- and seven-story buildings that they’re building now are already freaking people out. When they hear what [the city is] proposing now could go twice as high, they’re completely aghast.”
Susan Monheit, a former state water official and another Housing for People co-founder, calls 12-story buildings “completely out of the human scale,” adding: “It’s out of scale with Santa Cruz’s branding.”
Housing for People has gathered enough signatures to put a measure on the March 2024 ballot that, if approved, would require a vote of the people for development anywhere in the city that would exceed the zoning restrictions codified in the current general plan, which include a cap of roughly seven or eight stories downtown.
The activists say that they are trying to restore the voices of everyday Santa Cruzans and that city leaders are giving in to out-of-town builders and “developer overreach laws.”
The nascent campaign has generated spirited debate. Opponents contend the slow-growth measure would slam on the brakes, just as the city is overcoming decades of construction inertia. They say Santa Cruz should be a proud outlier in a long string of wealthy coastal cities that have defied the state’s push to add housing and bring down exorbitant home prices and rental costs.
Diana Alfaro, who works for a Santa Cruz development company, said many of the complaints about high-rise construction sound like veiled NIMBYism.
“We always hear, ‘I support affordable housing, but just not next to me. Not here. Not there. Not really anywhere,’ ” said Alfaro, an activist with the national political group YIMBY [Yes In My Back Yard] Action. “Is that really being inclusive?”
The dispute has divided Santa Cruz’s progressive political universe. What does it mean to be a “good liberal” on land-use issues in an era when UC Santa Cruz students commonly triple up in small rooms and Zillow reports a median rent of $3,425 that is higher than San Francisco’s?
Beginning in the 1970s, left-leaning students at the new UC campus helped power a slow-growth movement that limited construction across broad swaths of Santa Cruz County. Over the decades, the need for affordable housing was a recurring discussion. The county was a leader in requiring that builders who put up five units of housing or more set aside 15% of the units at below-market rates.
But Mayor Keeley said local officials gave only a “head nod” to the issue when it came to approving specific projects. “Well, here we are, 30 or 40 years later,” Keeley said, “and these communities are not affordable.”
Today, with 265,000 residents, the county is substantially wealthy and white.
An annual survey this year found Santa Cruz County pushed past San Francisco to be the least affordable rental market in the country, given income levels in both places. And many observers say UC Santa Cruz students contend with the toughest housing market of any college town in the state.
Advertisement
State legislators have crafted dozens of laws in recent years to encourage construction of more homes, particularly apartments. While California has long required local governments to draft “housing elements” to demonstrate their commitment to affordable housing, state officials only recently passed other measures to actually push cities to put the plans into practice.
Regional government associations draw up a Regional Housing Needs Assessment, designating how many housing units — including affordable ones — should be built during an eight-year cycle. The state Department of Housing and Community Development can reject plans it deems inadequate.
For years 2024 to 2031, Santa Cruz was told it should build at least 3,736 units, on top of its existing 24,036.
Santa Cruz and other cities have been motivated, at least in part, by a heavy “stick”: In cases when cities fail to produce adequate housing plans, the state’s so-called “builder’s remedy” essentially allows developers to propose building whatever they want, provided some of the housing is set aside for low- or middle-income families. In cities like Santa Monica and La Cañada-Flintridge, builders have invoked the builder’s remedy to push ahead with large housing projects, over the objections of city leaders.
The Santa Cruz City Council resolved to avoid losing control of planning decisions. A key part of their plan envisions putting up to 1,800 units in a sleepy downtown neighborhood of auto shops, stores and low-rise apartments south of Laurel Street. Initial concepts suggested one block could go as high as 175 feet (roughly 16 stories), but council members later proposed a 12-story height limit, substantially taller than the stately eight-story Palomar, which remains the city’s tallest building.
City planners say focusing growth in the downtown neighborhood makes sense, because bus lines converge there at a transit center and residents can walk to shops and services.
“The demand for housing is not going away,” said Lee Butler, the city’s director of planning and community development, “and this means we will have less development pressure in other areas of the city and county, where it is less sustainable to grow.”
A public survey found support for a variety of other proposed improvements to make the downtown more attractive to walkers, bikers and tourists. Among other features, the plan would concentrate new restaurants and shops around the San Lorenzo River Walk; replace the fabric-topped 2,400-seat Kaiser Permanente Arena, which hosts the Santa Cruz Warriors (the G-league affiliate of the NBA’s Golden State Warriors), with a bigger entertainment and sports venue; and better connect downtown with the beach and boardwalk.
Business owners say they favor the housing plan for a couple of reasons: They hope new residents will bring new commerce, and they want some of the affordable apartments to go to their workers, who frequently commute well over an hour from places such as Gilroy and Salinas.
Restaurateur Zach Davis called the high cost of housing “the No. 1 factor” that led to the 2018 closure of Assembly, a popular farm-to-table restaurant he co-owned.
“How do we keep our community intact, if the people who make it all happen, the workers who make Santa Cruz what it is, can’t afford to live here anymore?” Davis asked.
The city’s plan indicates that 859 of the units built over the next eight years will be for “very low income” families. But the term is relative, tied to a community’s median income, which in Santa Cruz is $132,800 for a family of four. Families bringing home between $58,000 and $82,000 would qualify as very low income. Tenants in that bracket would pay $1,800 a month for a three-bedroom apartment in one recently completed complex, built under the city’s requirement that 20% of units be rented for below-market rents.
The people pushing for high-rise development say expanding the housing supply will stem ever-rising rents. Opponents counter that the continued growth of UC Santa Cruz, which hopes to add 8,500 students by 2040, and a new surge of highly paid Silicon Valley “tech bros” looking to put down roots in beachy Santa Cruz would quickly gobble up whatever number of new units are built.
Advertisement
“They say that if you just build more housing, the prices will come down. Which is, of course, not true,” said Gary Patton, a former county supervisor and an original leader in the slow-growth movement. “So we’ll have lots more housing, with lots more traffic, less parking, more neighborhood impacts and more rich people moving into Santa Cruz.”
Leaders on Santa Cruz’s political left say new construction only touches one aspect of the housing crisis. Some of the leaders of Tenant Sanctuary, a renters’ rights group, would like to see Santa Cruz tamp down rents by creating complexes owned by the state or cooperatives and enacting a rent control law capping annual increases.
“No matter what they build, we need housing where the price is not tied to market swings and how much money can be squeezed out of a given area of land,” said Zav Hershfield, a board member for the group.
The up-zoning of downtown parcels has won the support of much of the city’s establishment, including the county Chamber of Commerce, whose chief executive said exorbitant housing prices are excluding blue-collar workers and even some well-paid professionals. “The question is, do you want a lively, vital, economically thriving community?” said Casey Beyer, CEO of the business group. “Or do you want to be a sleepy retirement community?”
Just days after the anti-high-rise measure qualified for the March ballot, the two sides began bickering over what impact it would have.
Advertisement
Lane, the former mayor, and two affordable housing developers wrote an op-ed for the Lookout Santa Cruz news site that said the ballot measure is crafted so broadly it would apply to all “development projects.” They contend that could trigger the need for citywide votes for projects as modest as raising a fence from 6 feet to 7 feet, adding an ADU to a residential property or building a shelter for the homeless, if the projects exceed current practices in a given neighborhood.
The authors accused ballot measure proponents of faux environmentalism. “If we don’t go up,” they wrote, “we have less housing near jobs — and more people driving longer distances to get to work.”
The ballot measure proponents countered that their critics were misrepresenting facts. They said the measure would not necessitate voter approval for mundane improvements and would come into play in relatively few circumstances, for projects that require amendments to the city’s General Plan.
While not staking out a formal position on the ballot measure, the city’s planning staff has concluded the measure could force citizen votes for relatively modest construction projects.
The two sides also can’t agree on the impact of a second provision of the ballot measure. It would increase from 20% to 25% the percentage of “inclusionary” (below-market-rate) units that developers would have to include in complexes of 30 units or more.
The ballot measure writers say such an increase signals their intent to assure that as much new housing as possible goes to the less affluent. But their opponents say that when cities try to force developers to include too many sub-market apartments, the builders end up walking away.
Advertisement
Santa Cruz’s housing inventory shows that the city has the potential to add as many as 8,364 units in the next eight years, when factoring in proposals such as the downtown high-rises and UC Santa Cruz’s plan to add about 1,200 units of student housing. That’s more than double the number required by the state. But the Department of Housing and Community Development requires this sort of “buffer,” because the reality is that many properties zoned for denser housing won’t get developed during the eight-year cycle.
As with many aspects of the downtown up-zoning, the two sides are at odds over whether incorporating the potential for extra development amounts to judicious planning or developer-friendly overkill.
The city’s voters have rejected housing-related measures three times in recent years. In 2018, they decisively turned down a rent control proposal. Last year, they said no to taxing owners who leave homes in the community sitting empty. But they also rejected a measure that would have blocked a plan to relocate the city’s central library while also building 124 below-market-rate apartment units.
The last time locals got this worked up about their downtown may have been at the start of the new millennium, when the City Council considered cracking down on street performers. That prompted the owner of Bookshop Santa Cruz, another local landmark, to print T-shirts and bumper stickers entreating fellow residents to “Keep Santa Cruz Weird.”
Santa Cruzans once again are being asked to consider the look and feel of their downtown and whether its future should be left to the City Council, or voters themselves. The measure provokes myriad questions, including these: Can funky, earnest, compassionate Santa Cruz remain that way, even with high-rise apartments? And, with so little housing for students and working folks, has it already lost its charm?
If you spent your teenage years waiting anxiously for one of your siblings to get out of the shower, the idea of selling your spacious, multi-bathroom home and moving into a smaller house or condo may feel like a reversal of fortune.
Yet for many retirees, downsizing makes financial and practical sense. Younger baby boomers — those currently ranging in age from 57 to 66 — made up 17% of recent home buyers, while older boomers — ages 67 to 75 — accounted for 12%, according to a 2022 report from the National Association of Realtors Research Group. Boomers’ primary reasons for buying a home were to be closer to friends and family, as well as a desire to move into a smaller home, the report said. Both younger and older boomers were more likely than others to purchase a home in a small town, and younger boomers were the most likely to buy in a rural area.
Save up to 74%
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail.
Profit and prosper with the best of expert advice – straight to your e-mail.
For retirees Fred and Shelby Bivins, selling their home in Green Valley, Ariz., will enable them to realize their dream of traveling in retirement. The Bivinses have put their 2,050-square-foot Arizona home on the market and plan to relocate to their 1,600-square-foot summer condo in Fish Creek, Wis., a small community about 50 miles from Green Bay. They plan to live in Wisconsin in the spring and summer and spend the winter months in a short-term rental in Arizona, where they have family.
Fred, 65, says the decision to downsize was precipitated by a two-month stay in Portugal last year, one of several countries they hope to visit while they’re still healthy enough to travel. “We’ve had Australia and New Zealand on our list for many years, even when we were working,” says Shelby, 68. The Bivinses are also considering a return visit to Portugal. Eliminating the cost of maintaining their Arizona home will free up funds for those trips.
With help from Chris Troseth, a certified financial planner based in Plano, Texas, the Bivinses plan to invest the proceeds from the sale of their home in a low-risk portfolio. Once they’re done traveling and are ready to settle down, they intend to use that money to buy a smaller home in Arizona. “Selling their primary home will generate significant funds that can be reinvested to support their lifestyle now and in the future,” Troseth says. “Downsizing for this couple will be a positive on all fronts.”
Challenges for downsizers
For all of its appeal, downsizing in today’s market is more complicated than it was in the past. With 30-year fixed interest rates on mortgages recently approaching 8%, many younger homeowners who might otherwise upgrade to a larger home are unwilling to sell, particularly if it means giving up a mortgage with a fixed rate of 3% or less. More than 80% of consumers surveyed in September by housing finance giant Fannie Mae said they believe this is a bad time to buy a home and cited mortgage rates as the top reason for their pessimism. “This indicates to us that many homeowners are probably not eager to give up their ‘locked-in’ lower mortgage rates anytime soon,” Fannie Mae said in a statement. As a result, buyers are competing for limited stock of smaller homes, says Hannah Jones, senior economic research analyst for Realtor.com.
Here, though, many retirees have an advantage, Jones says. Rising rates have priced many younger buyers out of the market and made it more difficult for others to obtain approval for a loan. That’s not an issue for retirees who can use proceeds from the sale of their primary home to make an all-cash offer, which is often more attractive to sellers.
Retirees also have the ability to cast a wider net than younger buyers, whose choice of homes is often dictated by their jobs or a desire to live in a well-rated school district. While the U.S. median home price has soared more than 40% since the beginning of the pandemic, prices have risen more slowly in parts of the Northeast and Midwest, Jones says. “We have seen the popularity of Midwest markets grow over the last few months because out of all of the regions, the Midwest tends to be the most affordable,” she says. “You can still find affordable homes in areas that offer a lot of amenities.”
Meanwhile, selling your home may be somewhat more challenging than it was during the height of the pandemic, when potential buyers made offers on homes that weren’t even on the market. The Mortgage Bankers Association reported in October that mortgage purchase applications slowed to the lowest level since 1995, as the rapid rise in mortgage rates has pushed many potential buyers out of the market. Sales of previously owned single-family homes fell a seasonably adjusted 2% in September from August and were down 15.4% from a year earlier, according to the National Association of Realtors. “As has been the case throughout this year, limited inventory and low housing affordability continue to hamper home sales,” NAR chief economist Lawrence Yun said in a statement.
However, because of tight inventories, there’s still demand for homes of all sizes, Jones says, so if your home is well maintained and move-in ready, you shouldn’t have difficulty selling it. “The market isn’t as red-hot as it was during the pandemic, but there’s still a lot to be gained by selling now,” she says.
Other costs and considerations
If you live in an area where real estate values have soared, moving to a less expensive part of the country may seem like a logical way to lower your costs in retirement. While the median home price in the U.S. was $394,300 in September, there’s wide variation in individual markets, from $1.5 million in Santa Clara, Calif., to $237,000 in Davenport, Iowa. But before you up and move to a lower-cost locale, make sure you take inventory of your short- and long-term expenses, which could be higher than you expect.
Selling your current home, even at a significant profit, means you will incur costs, including those to update, repair and stage it, as well as a real estate agent’s commission (typically 5% to 6% of the sale price). In addition, ongoing costs for your new home will include homeowners insurance, property taxes, state and local taxes, and homeowners association or condo fees.
Nicholas Bunio, a certified financial planner in Berwyn, Pa., says one of his retired clients moved to Florida and purchased a home that was $100,000 less expensive than her home in New Jersey. Florida is also one of nine states without income tax, which makes it attractive to retirees looking to relocate. Once Bunio’s client got there, however, she discovered that she needed to spend $50,000 to install hurricane-proof windows. Worse, the only home-owners insurance she could find was through Citizens Property Insurance, the state-sponsored insurer of last resort, and she’ll pay about $8,000 a year for coverage. Her property taxes were higher than she expected, too. When it comes to lowering your cost of living after you downsize, “it’s not as simple as buying a cheaper house,” Bunio says
Before moving across the country, or even across the state, you should also research the availability of medical care. “Oftentimes, those considerations are secondary to things like proximity to family or leisure activities,” says John McGlothlin, a CFP in Austin, Texas. McGlothlin says one of his clients moved to a less expensive rural area that’s nowhere near a sizable medical facility. Although that’s not a problem now, he says, it could become a problem when they’re older.
If you use original Medicare, you won’t lose coverage if you move to another state. But if you’re enrolled in Medicare Advantage, which is offered by private insurers as an alternative to original Medicare, you may have to switch plans to avoid losing coverage. To research the availability of doctors, hospitals and nursing homes in a particular zip code, go to www.medicare.gov/care-compare.
At a time when many seniors suffer from loneliness and isolation, a sense of community matters, too. Bunio recounts the experience of a client who considered moving from Philadelphia to Phoenix after her daughter accepted a job there. The cost of living in Phoenix is lower, but the client changed her mind after visiting her daughter for a few months. “She has no friends in Phoenix,” he says. “She’s going on 61 and doesn’t want to restart life and make brand-new connections all over again.”
Time is on your side
Unlike younger home buyers, who may be under pressure to buy a place before starting a new job or enrolling their kids in school, downsizers usually have plenty of time to consider their options and research potential downsizing destinations. Once you’ve settled on a community, consider renting for a few months to get a feel for the area and a better idea of how much it will cost to live there. Bunio says some of his clients who are behind on saving for retirement or have high health care costs have sold their homes, invested the proceeds and become permanent renters. This strategy frees them from property taxes, homeowners insurance, homeowners association fees and other expenses associated with homeownership
The boom in housing values has boosted rental costs, as the shortage of affordable housing increased demand for rental properties. But thanks to the construction of new rental properties in several markets, the market has softened in recent months, according to Zumper, an online marketplace for renters and landlords. A Zumper survey conducted in October found that the median rent for a one-bedroom apartment fell 0.4% from September, the most significant monthly decline this year.
In 75 of the 100 cities Zumper surveyed, the median rent for a one-bedroom apartment was flat or down from the previous month. (For more on the advantages of renting in retirement, see “8 Great Places to Retire—for Renters,” Aug.)
Aging in place
Even if you opt to age in place, you can tap your home equity by taking out a home equity line of credit, a home equity loan or a reverse mortgage. At a time when interest rates on home equity lines of credit and loans average around 9%, a reverse mortgage may be a more appealing option for retirees. With a reverse mortgage, you can convert your home equity into a lump sum, monthly payments or a line of credit. You don’t have to make principal or interest payments on the loan for as long as you remain in the home.
To be eligible for a government-insured home equity conversion mortgage (HECM), you must be at least 62 years old and have at least 50% equity in your home, and the home must be your primary residence. The maximum payout for which you’ll qualify depends on your age (the older you are, the more you’ll be eligible to borrow), interest rates and the appraised value of your home. In 2024, the maximum you could borrow was $1,149,825.
There’s no restriction on how homeowners must spend funds from a reverse mortgage, so you can use the money for a variety of purposes, including making your home more accessible, generating additional retirement income or paying for long-term care. You can estimate the value of a reverse mortgage on your home at www.reversemortgage.org/about/reverse-mortgage-calculator.
Up-front costs for a reverse mortgage are high, including up to $6,000 in fees to the lender, 2% of the mortgage amount for mortgage insurance, and other fees. You can roll these costs into the loan, but that will reduce your proceeds. For that reason, if you’re considering a move within the next five years, it’s usually not a good idea to take out a reverse mortgage.
Another drawback: When interest rates rise, the amount of money available from a reverse mortgage declines. Unless you need the money now, it may make sense to postpone taking out a reverse mortgage until the Federal Reserve cuts short-term interest rates, which is unlikely to happen until late 2024 (unless the economy falls into recession before that). Even if interest rates decline, they aren’t expected to return to the rock-bottom levels seen over the past 15 years, according to a forecast by The Kiplinger Letter. And with inflation still a concern, big rate cuts such as those seen in response to recessions and financial crises over the past two decades are unlikely.
Note: This item first appeared in Kiplinger’s Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
As companies gradually enforce back-to-the-office policies, the share of homebuyers trying to relocate to a different metro area decreased in November for the third month in a row. The share dropped to 23.9%, the lowest level seen in a year-and-a-half, according to Redfin.
Compared to November 2022, the share of homebuyers trying to relocate fell 20 basis points from 24.1%. It was the first annual decline ever recorded since 2017. It is also down from this summer’s peak of 26%.
For this report, Redfin monitored the searches of about 2 million Redfin.com users who viewed for-sale homes online across more than 100 metro areas from September 2023 to November 2023.
Some Americans are still chasing affordability
In November, all of the 10 most popular migration destinations posted lower prices than the most common origin of buyers moving in.
Sacramento, Las Vegas and North Port Sarasota, Florida were the three most popular destinations for net migration. Meanwhile, Spokane, Washington, landed on the list of popular destinations for the first time, ranking number 10.
The largest number of homebuyers moving to Spokane were from Seattle, followed by Los Angeles and Portland, Oregon. According to Redfin, the typical Spokane home sold for $416,000, compared to $775,000 in Seattle.
Homebuyers are leaving Los Angeles more than any other metro area in the country
For the first time, Los Angeles topped the list of metros homebuyers want to leave. San Francisco and New York came in second and third position, respectively. San Francisco fell from the top spot for the first time in two years.
Even if home prices increased in popular migration destinations during the pandemic, the median sale price for a home in Los Angeles ($1,025,000) remains twice more expensive than that of Las Vegas ( $411,000).