Thanks for checking out the Real Estate Today Podcast. Right now let’s talk about the downsizing trend.
Bob Nelson: I’m Bob Nelson, real estate investor and broker with Pacwest Real Estate Investments.
Marcia Edwards: I’m Marcia Edwards, residential broker with Windermere Real Estate. We want to talk to those of you who can choose your timing for your next move, and often the situation is downsizing. Downsizing the square footage for whatever reason. First, most obvious, is the kids have left and you got extra square footage, but there’s also those millennials who say I want a simple life and I want to travel more.
Bob Nelson: Simple life and traveling more does not necessarily include the ownership of a home, which is interesting. They’re willing to rent. They’re willing to rent at an extremely high level of rent as long as they’re close to the coffee shop, they’re close to the whatever. Walking distance. High walk score, all of a sudden, very high rent.
Marcia Edwards: Walk score …
Bob Nelson: A classic example’s the Pearl District in Portland.
Marcia Edwards: Walk score is something that hasn’t hit the Eugene market well, but in other areas it’s extremely significant. The walk score is basically a website that will score the livability without a car, so to speak, and the transportation and efficiency from your residence to whatever’s important to you.
Bob Nelson: Right. Whatever it takes to sustain your life. Close to a grocery store, close to medical, close to employment sources and so forth. The closer you are the higher the walk score and this is becoming increasingly important to millennials who may be willing to share a car as opposed to everybody’s got to have one and one and a half of their own.
Marcia Edwards: And the empty nesters on the other end of that. So we have a huge population and when you think about the description we just made of how their lifestyles going to move forward thinking, you realize we don’t have that inventory in Eugene. We don’t have that simply your lifestyle inventory in residential real estate right now. I have seen many people do the first part of their downsizing, eliminate that 3500 square foot or larger home and not be able to replace it and actually go into high end renting, month to month, hoping that they’ll have another opportunity come up.
Bob Nelson: And if they don’t they’re probably not going to be too particularly offended because they’re sitting on all the cash that was their equity and they can afford to probably retire the rest of their life as a residential tenant.
Marcia Edwards: That’s right. They’ve got the capital gains tax that they’ve waived because of their circumstance of losing, or selling, their personal residence. So they’re not necessarily getting a tax hit that gives them the incentive to move that money. So we’ve got a circumstance here, an opportunity. I do know that builders are driving towards that as quickly as they can. One level homes. Clean simple lines. Patio living instead of big yards. So there’s going to be some response in the inventory side, but it won’t be fast. I’m Marcia Edwards, Windermere Real Estate.
Bob Nelson: I’m Bob Nelson, real estate investment broker with Pacwest Real Estate Investments.
For more expert insight and analyses of the investment real estate market, listen to more podcasts by clicking on the button below.
Leave a Reply