The Pandemic is Reshaping How & Where We Live
The pandemic has changed the way we live, including working and schooling remotely. These changes have impacted our priorities when choosing a home. For example, today's remote workforce demands move-up homes that offer more space and second homes that provide a convenient escape.
According to a recent survey by The Harris Poll, 75% of respondents who have become remote workers would like to continue doing so—and 66% would consider moving if they no longer had to commute as often. Some of the top reasons were to gain a dedicated office space (31%), a larger home (30%), and more rooms overall (29%).1
And now that virtual school has become a reality for many families, that need for additional space has only intensified. A growing number of buyers are choosing homes further from town as they seek out more room and less congestion. A recent survey found that nearly 40% of urban dwellers had considered leaving the city because of the COVID-19 outbreak.2
But not everyone is permanently sold on suburban or rural life. Instead, some choose to purchase a second home as a co-primary residence or frequent getaway. Without the requirements of a five-day commute, many homeowners feel less tethered to their primary residence.
If you're feeling cramped in your current space, you've probably considered a move. But what type of home would suit you best: a move-up home or a second home? Let's explore each option to help you determine which one is right for you.
WHY CHOOSE A MOVE-UP HOME? A move-up home is typically a more extensive or nicer home. It's an excellent choice for families or individuals who need more space, a better location, or want features their current home doesn't offer—like an inground pool, a different floor plan, or a dedicated home office. In addition, most move-up buyers choose to sell their existing home and use the proceeds as a downpayment on their next one.
If you're struggling with a lack of functional or outdoor space in your existing home, a move-up home can significantly improve your everyday life. And with mortgage rates at their lowest level in history, you may be surprised how much home you can afford to buy without increasing your monthly payment.3,4
One significant benefit of choosing a move-up home is that you can typically afford a more excellent place if you spend your entire budget on one property. However, if you're longing for that vacation vibe, a second home may be a better choice for you.
WHY CHOOSE A SECOND HOME? Once reserved for the ultra-wealthy, second homes have become more mainstream. Home sales are surging in many resort and bedroom communities as city dwellers search for a place to escape the crowds and quarantine in comfort.5 With air travel on hold for many families, some are channeling their vacation budgets into vacation homes that they can use throughout the year.
A second home can also be a good option if you're preparing for retirement. By purchasing your retirement home now, you can lock in a low-interest rate, start paying down the mortgage and begin enjoying the perks of retirement living while you're still fit and active. Plus, it's easier to qualify for a mortgage while you're employed, although you may be charged a slightly higher interest rate than on a primary home loan.6
One advantage of choosing a second home is that you can offset a portion of the costs—and in some cases turn a profit—by renting it out on a platform like Airbnb or Vrbo. First, however, be sure to consult with a real estate professional or rental management company to get a realistic sense of the property's true income potential.
WHICH ONE IS RIGHT FOR ME? You may read this and think: I'd like both a move-up home AND a second home! But if you're dealing with a limited budget (aren't we all?), you'll probably need to make a choice. These three tactics can help you decide which option is right for you.
- Determine Your Time and Financial Budget You may meet the bank's qualifications to purchase a home, but do you have the time, energy, and financial resources to maintain it? These concerns are essential questions to ask yourself, no matter what type of home you choose.
Most buyers realize that a second home will mean double mortgages, utilities, taxes, and insurance. But consider all the extra time and expense to maintain two properties, such as two lawns to mow or two houses to clean. In addition, two sets of systems and appliances can malfunction. Second homes aren't always a vacation. Make sure you're prepared for the labor and carrying costs of maintaining another residence.
Of course, some move-up homes require more work than a second home. For example, if your move-up option is a major fixer-upper, you'll probably invest more energy and capital than you would on a small vacation condo by the beach. Have an honest discussion about how much time and money you want to spend on your new property. Given your parameters, would a move-up home or a second home be a better fit? - Rank Your Priorities If you're still undecided, make a wish list of the characteristics you'd like in your new home. Then rank each item from most to least important.
- Explore Your Options Once you've determined your parameters and priorities, it's time to begin your home search.
If you're still unsure whether a move-up home or a second home is right for you, we can help. First, contact us to schedule a free consultation. We'll discuss your options and help you assess the pros and cons of each, given your unique circumstances. We can also send you property listings for both move-up homes and second homes within your budget so you can better envision each scenario. Sometimes, viewing listings of homes that meet your criteria can clarify the decision.
LET'S GET MOVING Whether you're ready to make a move or need help weighing your options, we'd love to help. For example, we can determine your current home's value and show you local properties that fit within your budget. Or, if your heart wants a second home in another market, we can refer you to an agent in your dream locale. So contact us today to schedule a free, no-obligation consultation!
Sources: Zillow – https://www.zillow.com/research/coronavirus-remote-work-suburbs-27046/ The Harris Poll – https://theharrispoll.com/should-you-flee-your-city-almost-40-have-considered-it-during-the-pandemic/ MarketWatch – https://www.marketwatch.com/story/mortgage-rates-keeping-falling-so-will-they-finally-drop-to-0-2020-08-13 Toronto Star – https://www.thestar.com/business/2020/08/07/you-can-get-a-fixed-rate-as-low-as-184-per-cent-which-is-unbelievable-low-mortgage-rates-driving-up-home-prices.html Kiplinger – https://www.kiplinger.com/real-estate/buying-a-home/601091/timely-reasons-to-buy-a-vacation-home The Press-Enterprise – https://www.pe.com/2018/11/17/5-tips-on-when-should-you-buy-a-retirement-house-hint-before-you-quit-work/
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Eric Slifkin, Team Lead
Your local real estate expert
Are you seeking a home that suits your lifestyle, community, and neighborhood needs? Eric offers home buyers a turn-key approach to finding and purchasing real estate from the Treasure Coast to the Palm Beaches and beyond with his team.
Contact us today to schedule a free consultation or call us at 772-678-1600 for immediate service. Whether buying or selling a home on the Treasure Coast, we are always happy to meet with you to discuss your wants and needs, with no obligation.
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