Boomer Markets: Retiree Havens See Steep Price Cuts
Even if you're a decade or more away from quitting time, you may be thinking about buying a retirement home right now.
The prices for condos in popular retirement areas like Napa, Calif., and Naples, Fla., have come down 44 percent or more since the boom, substantially more than the average 32 percent that home prices have fallen nationwide, according to the latest data from Fiserv. And mortgage rates recently hit record lows once again.
For baby boomers in particular, "Many realize that they'll never see this scenario again in their lifetimes," says Jim Gillespie, CEO of Coldwell Banker Real Estate.
If you vacation in the same place several times a year and can pay for some or all of a property in cash, owning might not cost much more than hotel stays, especially as you get closer to chucking your briefcase and use the place more frequently.
Still, no matter the price, buying now isn't a no-brainer. The costs of owning two properties can be greater than you'd expect, even if you plan to rent one out most of the time. Before you shop, answer the following questions.
Can you truly afford it?
You should be socking away the max in your 401(k)s and IRAs, particularly during your prime earning years. If a second home makes that impossible, don't buy, says Grand Rapids financial planner Ryan Sheffer.
Moreover, the true cost of home ownership doesn't end with the mortgage payment, taxes and insurance. You'll probably spend several thousand dollars a year on everything from regular lawn care to ongoing utility bills.
Read the full story on CNNMoney
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