No time like the right time:
But is it the right time to buy?

     The real estate agents’ mantra serves them well through good markets and bad:  “It’s a great time to buy.”  Easy for them to say, since when prices increase annually, of course it is a good time to buy, the presumption being that prices will continue to trend up.  And when prices plummet, as of course they have over the last four years, the real estate industry can make the same claim because the market eventually exerts its reverse gravitational pull and restores prices to their former lofty perches (not to mention that, in a buyers market, many sellers are positively desperate to sell, with no reasonable offer refused).  Therefore, we real estate agents can never be wrong.  The sun will always come up tomorrow…unless it doesn’t.

Golf community buyers coming off the sidelines

     A recent spate of renewed buyer interest in southern golf communities and other planned developments has real estate agents from Virginia to Florida in an especially optimistic lather.  A dozen agents I have spoken with in the last month say the numbers of lookers in the first quarter of the year were significantly higher than a year ago; and a few are actually buying.
      This renewed spate of interest is hitting home for me as well.  This month, and with my help, four customers of Home On The Course LLC, my advisory business, are visiting communities in the Carolinas and Georgia, guided by real estate agents I have recommended.  I am talking with other couples planning their own prospecting trips this summer.  These folks are from all over the U.S., including Hawaii, and their timeframes to buy a retirement home have gone from an average three-to-five years in 2009 to less than two years today.  People are coming off the sidelines because they have renewed confidence in the stock market, if not the housing market.  Some saw the post-Lehman Brothers era as a great stock-buying opportunity, assuming they had anything left to invest, and their gains over the last year are fueling their decisions to buy the retirement homes they had in mind before the market kerfuffle.

Will home prices in the south drop more?  Should you care?

      I am asked frequently “Is this a good time to buy?” and the follow-up question, “Will home prices drop more?”  My honest answers are, respectively, “Depends” and “Doesn’t matter.”  To be blunt, the first question is incomplete and the second one is irrelevant.  Here’s what I mean:
      That first question should be “Is this a good time for us to buy?”  The decision to make such a big investment should always be driven by personal concerns, those related to financial and lifestyle interests.  The answer to the question may be significantly different, say, for the couple who bought their home 20 years ago and has paid off their mortgage, as opposed to the couple who bought their primary home a couple of years before the housing market tanked and will be lucky to recoup their original purchase price today.  The former could very well have enough equity to pay in cash for their new golf community home; the latter is likely to require at least some financing.  But borrowing is not necessarily a deal breaker, even for couples on essentially fixed incomes, because mortgage interest rates remain near historic lows.
      The financial component is mitigated, in many cases, by the cost of living differences between where people live now and where they might want to relocate in the south.  Where to Retire magazine, which is not my preferred source for objective information about communities and towns -– their editorial “advice” seems to track too closely with who advertises -– nevertheless provides a handy and eye-opening comparison of costs of living for major towns in northern and southern metro areas.

One way to give yourself a big raise:  Move  

     The differences are stark enough that a couple living in, say, Washington, D.C., could decrease their annual costs by 26% by moving to Asheville, NC, and by 31% by moving to Wilmington, NC.  A Boston couple would spend 29% less living in the Myrtle Beach area, or 32% less in Greenville, SC.  Spending levels are different one couple to the next, but if you factor in taxes and medical, food and entertainment costs (including golf), as well as all the other components of COLA, many couples spend more than $50,000 a year.  One New Jersey couple I am assisting told me their property taxes are $17,000 annually; comparable annual taxes in a community they are looking at in North Carolina equal one-month’s payments in New Jersey! 
     In short, a 25% or 30% annual savings on such spending can be a persuasive part of the calculation to move or not to move, regardless of what price your primary home fetches.
     Like many of you who are reading this, the value of my own primary home (in Connecticut) has dropped by double digits since 2006.  But I bought my home in the 1990s –- 1993 to be exact –- and it is worth more than my wife and I paid for it.  In the flotsam and jetsam of the housing market the last few years, the wild price appreciations of between the mid-90s and 2006 are but dim memories.  However, if you bought your home before 2000 anywhere but, say, Detroit or Las Vegas, and have not used it as an ATM, then you almost certainly have a nice down payment or the full amount for your next home.

Waiting for that perfect price could be a fool’s errand   

     It is tempting to wait until some buyer falls in love with your special house and pays you a few percentage points above its true market value.  This is a fool’s errand, though, especially for those who have planned for some time to relocate to their dream retirement home.  Your home may appreciate in the next few years -– but so too will the home you want to buy in Asheville or Savannah or Myrtle Beach.  A good percentage of the 76 million baby boomers hold to the dream of a retirement in a warm weather location, and as they begin to re-actualize their dreams, what do you think will happen to the prices of homes in the choicest locations in the southern U.S.?  You may get another 5% for your primary home in, say, Huntington, NY, but you could very well pay 10% extra for that dream home in Chapel Hill, NC.
     And that is why the question about the future of home prices is essentially irrelevant.  If prices continue to trend down, they are almost certain to do so more steeply in the less desirable north than the south.  And if they move up, which historic precedent says they will do, the increase will be faster and farther where the sun shines on the golf courses and on the cost of living.  If you have a house with equity and a plan to move to your dream retirement home, don’t let perfect be the enemy of this good time to execute your plan.

I am currently working with a half dozen couples who plan to relocate to a southern golf community in the next year or two, as well as others considering a vacation home now as preparation for a retirement home later.  I have time to take on a few more customers.  If you are considering a move to a southern golf community and would like an expert –- and free – advisory service to help you, please contact me at This email address is being protected from spambots. You need JavaScript enabled to view it. or call (860) 675-1491.