Navigating Housing Market Projections in an Uncertain Real Estate Market

Nationwide, housing prices that were soaring since before the COVID-19 pandemic are finally cooling off. Some regions of the U.S. are experiencing significant declines in median home prices. However, in Iowa, home prices jumped 6.5% in September 2023 compared to the same month in 2022, according to Redfin.

Housing market projections may cause uncertainty if you are contemplating your next move — possibly to independent senior living. Should you sell now and enjoy a nice return on your investment? Or do you wait and see if the local real estate market continues to surge but risk the possibility of it crashing? Answering these questions may not be easy in the current economic environment, but this might be a time when patience isn’t necessarily a virtue.

Housing Market Projections: How Home Prices Could Affect Your Living Decisions

In 2020, home prices began increasing more than double their usual rate. However, inflation has taken hold since the pandemic, and interest rates increased to try to slow down that inflation. The average 30-year fixed mortgage interest rate, as of October 2023, is approaching 8% — two years ago, it was almost as low as 3%. As a result, fewer would-be buyers can afford the current market, reducing the demand.

And yet, prices are rising in parts of the country, including Iowa. The supply of available homes — which was already facing a shortage — has shrunk even more. Homeowners with a sweet mortgage aren’t considering selling because they fear a larger monthly payment. Less supply inevitably keeps prices steady, if not increases them. Housing market projections from multiple experts forecast prices will continue to rise into 2024 and ahead of the September 2023 inflation rate of 3.7%. 

What does all this mean if you are considering independent living? Housing market projections aside, nothing with the economy is certain; today’s surge is tomorrow’s bubble. Selling your home to fund the entry cost for independent living also means you aren’t trying to secure another mortgage, which is a barrier for many buyers right now. 

Moreover, if you’ve owned your house for several years, you’ve likely already built some equity. Is waiting a couple of years to sell in hopes of netting a few extra thousand dollars worth keeping yourself from the lifestyle you want to lead? That’s a question you must answer, but you should also be aware of everything independent senior living brings to the table. 

The Benefits of Choosing Independent Living

Some older adults are excited about the prospect of a low-stress, amenity-rich lifestyle, whereas others may not know the benefits of choosing independent living:

• You’ll enjoy a wide range of amenities that are difficult (and expensive!) to access at home, such as a pool, fitness center, green spaces, walkable trails, beautiful community spaces, and exceptional meals, just to name a few.
• Your quality of life may improve when you don’t need to spend time on home maintenance or worry about budgeting for home repairs. 
• You can access more opportunities to build meaningful relationships. Independent living fosters a rich sense of community, and your friends and family will love visiting your convenient, stylish new home. 
• You may find greater peace of mind. Should you ever need more help, it’s readily available from friendly team members you already know and trust.

How to Make the Decision

There’s no one-size-fits-all guide to housing decisions. Every person faces unique challenges, so carefully consider your personal needs and concerns. These tips can help you make a decision that honors your needs and values: 

• Speak with a financial planner about your financial needs over the next decade. 
• Talk with an attorney about how various living scenarios could affect your assets and, potentially, your estate. 
• Consult a knowledgeable real estate agent who can advise you about when and how to sell your home. 
• Research various senior living communities. Be sure to ask about the price so you can begin structuring your budget and assessing how senior living might fit.
• Compare the costs of staying at home with moving. Because senior living includes so many amenities and services, many residents save money when they move. Be sure to look at expenses such as entertainment, transportation, meals, and memberships to a gym or fitness center. 
• Focus on your quality of life. You deserve a life of joy and meaning. Ask yourself whether you’re happy living at home and whether a different setting might help you write a more rewarding next chapter. 

Need some help making the decision? This five-minute questionnaire can start the process on whether it is the right time to downsize.