September 22nd, 2007 10:31 PM by Karyn Smith
With a large inventory of homes available, days on market has increased to 137 days -- from 98 in 2006 and just 61 in the boom year of 2005.
Homes are selling for around 95.20 percent of their asking price.
With prices in many areas at a low ebb, baby boomers should consider buying their retirement home now, even if they’re still years away from actually moving, allowing renters to pay the bills for now. Here’s some advice for people considering this strategy:
• Shop carefully. Buy a home that can be rented for a rate that, after tax considerations, covers the mortgage, real estate taxes and insurance. • Study housing trends. Ask the local or state planning department for demographic and economic data. The information can reveal facts that will influence whether or not to buy. For example, big companies going out of business or military base closings can be bad news. • Don’t forget maintenance. Property managers usually charge a percentage of the monthly rent. Family members may do the job for free but could be ill equipped to make repairs. • Consider financing. Boomers with sufficient equity in their current home can tap it to either buy their retirement home outright or secure a much lower mortgage rate compared to the loan rate usually charged to buyers of investment property.