Ask Phyllis: a blog series of frequently asked real estate questions.
Financial planner urging to sell
Dear Phyllis
I’m a big admirer and would appreciate your insight on a personal financial matter. I’m a widow, and my late husband used to handle all our finances. Since his passing, I’ve hired a financial planner to help guide me. My assets include some stocks, Social Security, and a few CDs. However, my most significant asset is my home, where I currently live and feel very comfortable. I have intended to stay here as long as I’m able.
The dilemma is this: my financial planner is strongly encouraging me to sell the home now and rent instead. He believes housing prices have peaked and that I could buy again later, once the market corrects. I’m conflicted. I’d value your perspective—what do you think of this strategy? Torn
Dear Torn,
If the only reason you’re considering selling your home is because you’re betting that prices will drop, I think that’s a mistake. There’s no certainty that home values will decline. Trying to time the real estate market is unreliable. Prices may remain stable or even continue to increase. Another important consideration: if you’re out of the market for more than two years, you risk losing your current low property tax base under California’s Proposition 13. That could mean significantly higher property taxes if you decide to buy again in the future.
I understand that maintaining a home as a single homeowner can be a challenging task. Repairs, yard work, and general upkeep take time, energy, and money. These are valid concerns. If your home is starting to feel like a burden or if you’re dealing with physical limitations, considering senior housing or purchasing a smaller, lower-maintenance property might be a wise move.
But that’s very different from selling to rent while you wait for prices to fall. Renting doesn’t offer stability. Rent can increase, and landlords can decide not to renew your lease—both of which can be stressful, especially as you age. Additionally, moving multiple times in a short period can take a real emotional and financial toll.
If your home still suits your lifestyle and physical needs, and you’re comfortable there, I’d be cautious about giving that up based on a financial advisor’s market speculation. Stability, comfort, and the security of a fixed housing payment are invaluable, especially in retirement.
