We just got rid of all our rental condos, but now I’m wondering if there will soon be an opportunity to get more short sales/foreclosures for retirement income. This feels like the crazy times of overinflated home prices, lending to anyone of the early 2000’s. A family member was able to purchase a home with zero down, borrowed closing costs, not a particularly high income, and nothing in the bank. How do you do that? We went through the ringer refinancing our house with over 70% equity, substantial savings and salary a few years ago.
It makes me think that if money is this easy to get, a lot of people are overextended, and the housing market is going to crash.
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Yikes about that @busdriver11!
I see some signs of crazy flipping of vacation properties… like someone buys a condo in Hawaii and then resells it 3 month later for $100k plus profit. This is not going to end well. Someone will end up holding the bag. I bet it will not be the realtors who did the initial turnover!
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For people’s plan with retirement, often the decision of continued ownership of current property, purchasing into a community, purchasing another property by ‘downsizing’ or retiring somewhere geographically elsewhere. Having personal savings/investing, having some kind of cash flow in retirement (various sources - pension, SS, etc.), and health issues/health care/health insurance all play into ‘how much do you think you need to retire, and at what age’. I do think some people (young and older) do over-extend when purchasing a home - and pre-retirement, do not have enough savings or any kind of safety net to keeping up payments with a loss of a job, loss of health to be able to continue in current job, etc. Maybe some people now are having very thin household budgets due to gas costs requiring more spent for their work transportation costs. I know some people have made home purchases with larger commuter times with their vehicle.
The current situation with home prices - partially influenced with supply and demand along with climbing rental costs. I wonder with the situation you describe - along with first time purchasers of home next to my sister’s home (now in foreclosure and the young couple divorcing and abandoning the property all together). Some people are getting money ‘easy to get’ for a home loan.
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I get cold calls/cold texts literally every day from people who want to buy my rentals. Somehow my son’s number got associated, and he gets them too.
There’s nothing else I could reinvest in that would come close to generating the cash flow we get from these, so…
Plus the tax bill would be huge.
The housing market is definitely cooling off. Whether prices drop meaningfully like in 2008 is an interesting question. There’s a large housing shortage and this may prevent any large downward pressure on prices. There hasn’t been a foreclosure in two years, no one really knows how that is going to affect things either.
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House prices per Case Schiller have only increased 130% since the 2009 trough whereas the S&P 500 has gone up about 500%. So “meaningfully” means different things to different people, but compared to many other countries the US has had much less of a housing bubble and more of a stock market bubble. So any problems for housing are more likely to be limited to those people with excessive levels of leverage.
I also think the more appropriate comparison is the 1970s when there was high and persistent inflation. For much of that decade the stock market was a disaster whereas housing was relatively insulated because prices were underpinned by increasing rents.
I know some young adults that are getting into their first home as a single person - some with parental help on down payment (as well as searching help on the properties), and some being single for some years, realizing home prices are escalating and jumping in. Some married couples with two strong incomes have gone in with facing competing offers on properties; one couple was fortunate that even w/o the highest offer the seller sold to them because she wanted the home to go to a family that will own the home (it was what they could qualify for, and the competitors were either flippers or buying property to rent/manage) - she was going into assisted living. This trend for our children’s home purchasing certainly affects some of us retirees because we want to see our DDs get into homes where they are stabling living. We are holding off on some home improvements so we can keep funds available - will see what the next six months bring on DDs’ situations. We were thrifty DINKS getting into our first home in 1979 at ages of 22 (college graduates in 1978) - but we did not do all these ‘extra’ activities young people do - and we shared a paid for car to get into a home ASAP. Salaries were relative to house prices, but interest rates were high compared to now - we assumed a 8.5% interest and paid prime (12% at the time) on a second mortgage which was paid off quickly – we were paying bills with one salary and paying off 2nd mortgage with other. Took a company move and ‘made’ money, although that is relative due to whatever taxes we did pay with the company move benefits - and we got stuck paying down points when we thought we were locked in with 12.5% interest on newly built home (paid 4 discount points) - realtor was weak IMHO - in hindsight we should have sold our home, moved into new home/closed back to back, and then had the lower interest rate ‘secured’. “Wisdom through experience”. Our DDs definitely can benefit from our experiences and help.
I was just walking by a school bus yard near my home, and a guy out front asked me, “Hey, do you want to drive a school bus? It pays $31 per hour”. Which is kind of humorous, because I just retired from driving a bus (an Airbus, that is). It did start me thinking about getting a part time job for health insurance when (if) things slow down in the future. Definitely not doing something dealing with kids, however, I would want to reduce stress! And at this point, I have very limited qualifications.
I wonder how many people are now going back to work part time instead of volunteering. Seems like inflation would be a serious motivator to do so.
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Congrats on your retirement!
We have a friend that retired very early (around age 50). He ended up doing a bus driver gig, mostly for health insurance and something to do. He enjoyed it, and after 10(?) years has qualified for some retirement / healthcare discounts. He likes the fact that it is not too many hours, with big mid day gap for his hobby. Also summers off. No interest from me or hubby for this sort of thing, but it could make a decent semi-retirement job.
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Thanks! Sounds like it would be a good gig for some. Definitely no interest from me…driving…kids, nope! But I’ll bet there are many part time jobs out there for retirees right now.
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Several of the school districts around us have been advertising for bus drivers. I have thought about doing that at some point. Or maybe drive buses in a national park.
I expect that given what is happening in the stock market and with inflation, some people who have retired or are nearing retirement are looking to either work again or work a little longer. Not all though clearly.
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It looks like there are tons of web sites looking for retired pilots - corporate gigs, training, etc. Or volunteering at the Museum of Flight - but not if you want to keep away from kids ;).
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I have been paying a lot of attention to our market. I find it fascinating how much prices have risen and which houses sell quickly and which don’t. Last year, one house was on the market in our entire 'hood of about 750 homes; two weeks ago, eight homes were listed. People are trying to cash out while they can. Our good friends got only one offer for their home, but it was for list price including all closing costs. All you need is one, right? However, another home listed on the same day for $950k got many offers really quickly and took one for $1.15M, making it the second-most expensive house in our area.
What I found interesting about my friends’ offer was the financing. The bidder, a single woman, put $100k up as earnest money and is paying $550,000 cash plus taking out a small mortgage. I don’t know why, but I found that fascinating – not enough to pay cash outright (or just unwilling to) but also not wanting to finance much.
This is more about rental prices but dovetails nicely with the discussion here, especially if you are considering retiring, selling your house and renting. Also the Dakota Johnson bit at the beginning is hilarious, especially if you’ve ever staged a house.
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Did not want to sell other investments and got the max mortgage she can qualify for income-wise?
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I work a whopping 200 hours per year, as a retiree. If I work more than that it impacts other sources of retirement income. I planned to volunteer during retirement, but COVID has slowed that plan. My husband retires later this year, and maybe we will do some volunteer work together.
Several years ago I liked the idea of volunteering with or for kids during retirement. Now I realize “I’m too old for that.”
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That sounds right to me. She works for a nonprofit so maybe she’s a trust fund baby. Googling tells me she owned a business in Mexico so maybe sold that for a chunk and that’s where the cash comes in? I like speculating! 
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I found out at niece’s wedding that former sister in law is driving bus and really liking the schedule. I guess the benefits and pay were enough for her, and she is a few years away from 65. I imagine she may continue to do it as well for income as she will need to continue having the cash flow after 65.
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Not me, I don’t like volunteering either, however I like booking trips, travel agent job without pay.
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A friend became a bus driver when the bottom fell out of journalism. Poor pay with no benefits is the norm around here, as the service is subcontracted out to various companies. I am guessing the pay has gone up considerably.
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