One of today’s new housing trends was also popular more than thousands of years ago — communal living.1
In the Middle Ages, society was more interdependent. It wasn’t unusual for households to consist of far more than just biological family members; a myriad of shifting residents included townspeople, friends, poor married couples, other people’s children, widows, orphans, the elderly, servants, boarders and long-term visitors.2
Back then, it wasn’t realistic for a nuclear family to possess the time, money and resources to run a household independently. It required the collective skills and cooperation of many to provide financially; prepare meals; care for the sick, elderly and children; and all the other chores of maintaining a household with vegetable gardens and livestock.3
People face similar challenges today, allowing the concept of communal living to experience a resurgence. Retirees may live with at-risk foster kids, college students may reside in nursing homes, and young computer programmers find themselves co-living in Silicon Valley “hacker houses.”4
This trend offers several advantages in retirement planning for those who want to “age in place.” Retirees can supplement their nest egg with rental income from flexible housing configurations. This may include dual master suites, a children’s wing or a garage apartment. As they age, retirees can offer free or discounted room and board to students, single parents, widows and widowers, and others in exchange for home and lawn maintenance, errands and driving assistance.
For this reason, it may be worth keeping the big family home instead of downsizing in retirement. After all, if your mortgage is paid off and offers the flexibility for short- or long-term co-residents, a larger home could help with the goal of independent living in retirement. Plus, take into account the social benefits of living and engaging with others every day; many people do not wish to live alone in old age, nor do they generally fare well.
We would be happy to review your financial situation with you to help you determine the benefits and possibility of staying in a large home. On the other hand, your circumstances may be better suited to downsizing and leveraging earned equity in other ways for retirement.
Given that women tend to live longer than men, the fact that more single women are buying homes than single men is a trend that could lend itself to communal living down the road. In 2017, single women accounted for 18 percent of all home purchases compared to 7 percent of single men, making them the second largest home-buying demographic behind married couples.5
If you are considering selling your home to upsize, downsize or “rightsize,” recent surveys reveal that both real estate agents and economists believe our growing economy will take a turn for the worse in 2020. In other words, you might consider selling before then.6
If you’re buying a home in today’s competitive market, the best deals are typically negotiated with motivated sellers. For example, sellers who are heirs of a recently deceased parent, homeowners relocating for a job, divorcing couples or those with homes that have been on the market for several months. When house shopping, it’s a good idea to ask the seller’s agent the owner’s reason for moving.7
1 Ilana E. Strauss. The Atlantic. Sept. 6, 2016. “The Hot New Millennial Housing Trend Is a Repeat of the Middle Ages.” https://www.theatlantic.com/business/archive/2016/09/millennial-housing-communal-living-middle-ages/501467/?utm_source=twb. Accessed June 16, 2018.
5 Kenneth R. Harney. The Washington Post. May 9, 2018. “Single women account for more real estate purchases than single men.” https://www.washingtonpost.com/realestate/single-women-account-for-more-real-estate-purchases-than-single-men/2018/05/08/0f3cee66-521e-11e8-a551-5b648abe29ef_story.html?noredirect=on&utm_term=.e11dcaeec068. Accessed June 16, 2018.
6 Jacob Passy. MSN. May 24, 2018. “Thinking of selling your home? Do it before 2020, economists say.” https://www.msn.com/en-us/money/realestate/thinking-of-selling-your-home-do-it-before-2020-economists-say/ar-AAxEbqH?li=BBnbfcN. Accessed June 16, 2018.
7 Holden Lewis. Forbes. April 18, 2018. “A Home Buyer’s Guide To Motivated Sellers.” https://www.forbes.com/sites/holdenlewis/2018/04/18/home-buyers-guide-to-motivated-sellers/#79d5ce7c6015. Accessed June 16, 2018.