| LI seniors flying the coop
Discovering the nest egg is shrinking, some intrepid retirees have concluded the best path is bail from the nest.
Even if home prices aren’t encouraging, many Long Islanders are finding the time is right to trade the big house with its maintenance, high tax and utility bills for a more manageable, affordable home that fits their lifestyle – on or off Long Island.
Marie Montchal was recently involved in the sale of units in a senior housing community in Port Washington. “The seniors that were moving in had been reluctant to sell their homes, because they were still attached to the idea that they were losing money, since their homes are not worth what they were five or six years ago,” said Montchal.
But despite the fact median home sale prices dropped from $490,000 in Nassau County in July 2006 to $423,000 in July 2011, and from $410,000 to $321,000 in Suffolk County over that span, it’s not a bad time for retirees or those approaching retirement to sell.
“Capital gains taxes are at historic lows,” said Harvey Susnick, a partner in the Jericho office of the accounting firm Berdon. Currently, there’s a $500,000 exclusion for a married couple and a $250,000 exclusion for individuals, and after the exclusion, the federal capital gains tax is just 15 percent.
The high exclusion and low taxes are particularly important for homeowners who have had their home for decades. “There are people who bought their house 30 years ago for $70,000 and now it’s worth $800,000,” Susnick said.
For capital gains tax purposes, homeowners can deduct what they paid for capital improvements. “If you have been in a house for 30 years, chances are you have made improvements like finishing the basement, redoing the kitchen or adding rooms,” said Susnick, who noted the real estate commission from the sale is deducted from the capital gain, as well.
And although there is a surplus of supply on the market, there are buyers looking to take advantage of low interest rates, ready to pounce on homes priced right. “Buyers are looking at a lot of properties, and they know what’s overpriced,” Montchal said.
A Ronkonkoma-based licensed associate broker, counsels sellers on the importance of coming into the market at an “impact” price. “If you come in too high, you will wind up chasing the market and getting less money in the end,” she said. “When a house sits on the market for a long time, potential buyers will think it’s undesirable. Serious buyers are waiting for good houses to come on the market and the best opportunity to get them is to price the home right out of the gate.”
Getting the house ready for sale is another story. “Seniors have difficulty parting with their stuff,” said a senior housing specialist, who noted that typically many of the excess items belong to the senior’s children.
“Updates don’t have to be expensive – there are probably wood floors under the shag carpeting, and if you take down the heavy drapes and put a fresh coat of paint on the walls, the home will have more mass appeal,” Karhu said.
Baby Boomers who sell their homes are generally looking for a condo or stand-alone unit in a planned community, with social activities on premises. “They want to be able to walk down to the common room and play cards and not have to worry about the roof, gutters and the lawn,” Carillo said. Most want one-story living. “Seniors don’t want to have to go downstairs to do the laundry or upstairs to the bedrooms,” Montchal said. Continuum of care facilities – which allow seniors to stay put while taking advantage of increasing care as they need it – are less pricey outside of New York and are popular options, Karhu said.
About 10 to 15 years ago, Karhu said, there were reasonably priced golden-age housing units for seniors here. But since the early 2000’s, senior housing that has become available has been largely market-priced, and is very expensive in Nassau and western Suffolk, she said.
“Seniors are going to Florida again – they hadn’t moved there as much over the last 10 years – and they’re going to the Carolinas and Georgia,” Karhu said, noting many go where their kids have moved. Seniors have also taken to planned developments near small towns, including college towns, because of the affordability and the community factors.
“College towns are often vibrant communities with coffee shops, book stores and cultural and educational opportunities for the youthful senior who is interested in learning,” Karhu said.
For information regrading Long Island Seniors housing and Condominium communities contact Gary Baumann or Melanie Mazzeo, Seniors Real Estate Specialists with Prudential Douglas Elliman Real Estate at 631-468-4830, or visit www.longislandseniorshousing.com.
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