What we’re seeing with interest rates and inventories is an anomaly that is specifically designed to artificially inflate prices and work in favor of sellers. It will not last forever, even though it could last for longer than most of us think wise.
If I were in your shoes, I’d be thinking very seriously about whether it’s best to sell and then buy or rent the retirement home, or rent your primary house out while renting the retirement home.
This is the time to SELL. The market is on fire with so little inventory and incredibly low interest rates. The bubble was not allowed to fully deflate, but that doesn’t mean they’ll be able to artificially prop up prices indefinitely. If you ever intend to sell, don’t let unrealistic pricing expectations get in your way. Sell sooner rather than later.
FWIW, in my old neighborhood prices had already doubled between ~1997 and ~2001. That likely marked the top of the “normal” RE cycle. When the Fed dropped rates in 2001, every investor started getting into “alternative” investments and ARMs started becoming the mortgage of choice. The bubble was well into an advanced stage by 2003, it wasn’t beginning in 2003.
Just MHO, and this is what I’d be doing if I were hoping to sell in the next 10-15 years. I do not believe prices will be higher in 10 years than they are today, especially if they don’t allow the markets (bond, stock, housing, commodities, etc.) to purge. Wages are going down for most people, not up. The global economy is slowing and has to reverse all of the artificial stimulus from the past 10+ years (all that debt needs to be paid down). Sure, they might print ceaselessly, but that will likely only increase commodity prices, not wages; and people will have LESS money to spend on housing, not more. As it stands, most working families can barely pay for their expenses outside of housing — just gas, utilities, car payments, food, medical insurance, etc. is maxing them out. That’s why so many people are so deep in debt. Most people from the Boomer generation have an inflation bias because that’s all they’ve ever seen. Inflation is not guaranteed, and in an economy where so many are so over-indebted and just struggling to survive, “healthy” inflation is very unlikely, IMHO.
