March 16, 2023

Buying A Second Home?

6 minutes

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Today, I’m talking about the opportunity to purchase a 2nd home - whether that’s a rental, a snowbird spot, or a vacation home, a decline in housing prices means an even greater decline for popular vacation or 2nd home destinations. During the global financial crisis in 2008, vacation home sales dropped 30% and prices came down 23% in just one year from 2007 to 2008.

Obviously we’re not there yet, but you can take steps today if you’re serious about it:

Start shopping & decide on places you would consider buying and understand what’s happening in the market (corporate buyers are already exiting)

Story about central OR, Florida, Arizona, South Carolina - seriously considering a move

Save as much as possible and invest it in 1 year CD or Treasuries or money market where the money will be safe but grow while you wait
Crunch the numbers and figure out what you can afford, so you’ll know when the values come down to a more reasonable level and when you’re ready to buy…you don’t need to wait until the bottom (we bought our first house in Jan 2009 when prices came down, but didn’t bottom for another couple of years). Fixed rate mortgages are high, but ARMs are cheaper if you can deal with the potential uncertainty that your interest rate will increase
Be patient - this could take years to fully materialize - market cycles can be long and the last downturn in housing took about 10 years to get back to peak housing levels, so there is no rush and you have time to be prudent.

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance

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By Ashley Micciche

4.9

5252 ratings

March 16, 2023

Buying A Second Home?

6 minutes

This week’s theme on the Retirement Quick Tips Podcast is: How Pre-Retiree Homeowners Can Benefit From Higher Interest Rates.

Obviously we’re not there yet, but you can take steps today if you’re serious about it:

Start shopping & decide on places you would consider buying and understand what’s happening in the market (corporate buyers are already exiting)

Story about central OR, Florida, Arizona, South Carolina - seriously considering a move

Save as much as possible and invest it in 1 year CD or Treasuries or money market where the money will be safe but grow while you wait
Crunch the numbers and figure out what you can afford, so you’ll know when the values come down to a more reasonable level and when you’re ready to buy…you don’t need to wait until the bottom (we bought our first house in Jan 2009 when prices came down, but didn’t bottom for another couple of years). Fixed rate mortgages are high, but ARMs are cheaper if you can deal with the potential uncertainty that your interest rate will increase
Be patient - this could take years to fully materialize - market cycles can be long and the last downturn in housing took about 10 years to get back to peak housing levels, so there is no rush and you have time to be prudent.