MONEY housing

Housing Prices Bounce Back In October

After September numbers seemed to show a slowdown in the housing market recovery, October figures are a little more promising.

MONEY Ask the Expert

The Best Tools to Give a New Homeowner

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Getty

Q: My grandson just bought his first home. He’s excited about putting in some sweat equity, but he has no tools because he’s always lived in an apartment. I’d like to surprise him with a good starter set. What should I get?

A: Not only will this thoughtful gift save your grandson the considerable cost of establishing a collection of DIY paraphernalia, it will also save him countless trips to the home center. Chances are, he would go out to buy the tools he needs piecemeal, meaning a trip (or two!) every time he tackles a new project.

Here are a few different types of starter kits you could get him:

Loaded tool bag: A tool bag is like an inside-out toolbox; all of the gear is exposed, stowed in dedicated pouches and pockets and easy to see and grab. You could buy a bag and load it up with tools yourself—or just purchase the Craftsman Evolv ($40 at Sears). It contains all the basics: screwdrivers, measuring tape, hammer, pliers, utility knife, and a plastic sorting tray for the nails, hooks, and screws he collects over the course of his projects. This is far from every hand tool he’ll ever need, but there’s room to add more as he builds his collection.

Cordless power tool set: Since he doesn’t already own any tools, we’re assuming he’s not expert enough to need a whole array of heavy-duty power tools. More affordable and handy would be a set of battery-operated power tools. Today’s lithium-ion batteries deliver plenty of muscle, hold their charge between uses, and use rechargeable batteries that are interchangeable for a host of same-brand tools. Porter-Cable offers a four-tool kit (circular and reciprocating saws, drill/driver, and flashlight, with two 20-volt battery packs, so one can be recharging while your grandson is using the other) for about $200 at amazon.com.

Extras: He’ll be able to tackle most any job around the house if you round out his collection with a large ratchet set (such as the Husky 65-piece mechanics toolset, $30 at Home Depot) for removing and installing bolts of any size; an electronic stud finder (like the Bosch Digital Multi-Scanner, $80 at Lowes) to make easy work of locating framing from which to hang shelves and cabinets soundly; and a small bubble level (like the magnetic aluminum torpedo level, $15 at Ace) to make sure those shelves and pictures are hung straight.

 

MONEY Face to Face

How to Deal with a Roommate Who’s Late Paying the Rent

Past Due envelope slipped under door
Jim Corwin—Alamy

Unfortunately, sharing an apartment can also mean sharing money woes. Use these conversation starters to make sure your own finances don't end up in the gutter—and you don't end up on the street—because of someone else's problems.

If your roommate can’t manage his or her share of the rent, you’ve got more than an uncomfortable situation on your hands.

When both your names are on the lease, you’re both liable for the full amount owed to the landlord, and you can both be evicted if payments aren’t made in total. Your credit score may suffer in the process, too—making it difficult for you to get another apartment. Serious stuff.

Still, the first time your roomie misses a payment, you might give him a pass, says San Francisco-area financial counselor Susan Bross. “But if this happens more than once, it’s about bad decisions they’re making with their money.”

And since the situation could worsen, you’ve got to address it head on, she says. Here’s how:

OPEN GENTLY: “Can we talk about what’s going on with our rent payments?”

Your first goal is figure out why your roommate was late, so that you can determine whether missed payments will continue to be a problem in the future.

If your housemate has just started freelancing and hasn’t yet figured out how to balance expenses against an irregular income, the problem may resolve itself once she gets more settled. But if she’s got a shopping habit that eats up all her paycheck before she can get to her bills, you may have a regular headache ahead.

As you try to ascertain the situation, try your best not to come off as accusatory, says Dr. Eric Dammann, a New York City clinical psychologist and financial coach.

The last thing you want to do is put your housemate on the defensive before you’ve had a chance to discuss resolutions. And if the conversation escalates to a fight, it’ll be tougher for you to live harmoniously under the same roof going forward.

“So bring it up in the gentlest way you can,” he says.

PUT IT IN PERSPECTIVE: “I was late paying some of my other bills last month because of the missed payment.”

If your roommate’s not opening up, or if he acts like missing the deadline is no big deal, let him know how his lateness is affecting you or the rest of your roommates.

“Suggest ways in which it is a big deal,” says Dammann. “You might get through that way.”

Also, explain to him the possible consequences if his portion of the rent is not met every month (e.g. you’ll get kicked out and both end up with poor credit).

FIGURE OUT A GAME PLAN: “Let’s come up with a system so we make sure we don’t have to have these conversations again”

or

“If you’re not able to keep up with rent payments, I need to know so that I can go to our landlord and try to renegotiate the terms of our lease.”

If the late payments are truly only a matter of forgetfulness, try to encourage your roommate to set up a new system to avoid missing payments, so that you’re not left scrambling for money again.

The fix could be as simple as a Google alert, a gentle reminder on a whiteboard in the kitchen, or together using a site like Splitwise, that helps roomies coordinate shared expenses.

But if you find out the issue is more serious or more chronic, start by asking your roommate if he sees any possible resolution, such as asking a parent for money. No end in sight to the problems? Without being too aggressive, let your flatmate know that you’ll have to get the landlord involved in order to protect your own finances.

Then do so, stat. “Most leases can be modified,” says Brandy Peeples, a Frederick, Md. litigation attorney specializing in real estate. “If your landlord knows you’re having problems, he or she may work with you—it’s practical to go back and ask.”

You could see if your landlord will allow you to bring in an extra roommate to reduce everyone’s individual contributions. Or you could try negotiating an early termination fee that allows your roommate to pay a fine and leave the apartment.

“It’s good to keep the landlord into the loop,”says Peeples. “If you wait until after the fact, a lot of times the landlord is not going to be so forgiving.”

RELATED: 3 Tools that Help You Nudge Friends to Pay You Back

MONEY Small Business

Can Ferguson Recover? The Lasting Economic Impact of Violent Unrest

Flames illuminate the St. Louis Fish & Chicken Grill next door to where fire crews worked to douse a burning furniture store.
Riots erupted moments after it was announced Ferguson police officer Darren Wilson will not face criminal charges in the fatal shooting of unarmed teenager Mike Brown. Several buildings were looted and burned. James Cooper—Demotix/Corbis

The looting and destruction of businesses in Ferguson could have long-term effects.

A grand jury decision not to indict police officer Darren Wilson for the shooting of unarmed black teen Michael Brown has stoked anger in Ferguson, Mo., where peaceful protests have given way to looting and violence, virtually shutting down the city last night. “People don’t want to come into the area,” Jason Bryant, a local pastor, told TIME.

The events echo those in August, when the shooting first caused long-standing tensions to erupt into violence, theft — and shuttered storefronts. TIME reported last night that local retailers have seen sales slow by as much as 80%.

While the loss of local business may seem trivial next to the potential for additional violence — not to mention the civil rights and other legal issues at stake — there is a danger that rioting could disrupt the lives and livelihoods of Ferguson residents for years to come.

In the ten years after the 1992 Los Angeles riots, for example, the city lost nearly $4 billion in taxable sales, according to research conducted by Victor Matheson of College of the Holy Cross and Robert Baade of Lake Forest College.

“Social unrest can have a lasting negative impact on a local economy in a way that’s much more persistent than even a natural disaster,” says Matheson. “Though Hurricane Andrew caused more damage upfront, businesses were able to bounce back as soon as cleanup began. We didn’t see that in Los Angeles.”

Matheson and Baade found that the steps toward recovery are relatively clear after natural disasters: Communities tend to join together to build shelters, clean up, and storm-proof structures against future events. After rioting, by contrast, it’s much harder rebuild confidence and community trust among frightened business owners, or to convince new employers to move in. “It’s not as simple to just stamp out violence and anger,” Matheson says. And reluctance to rebuild is dangerous because it is self-perpetuating, he adds.

Concerns about lasting damage to business-owner confidence similarly followed riots in London in 2011 (also triggered by a police shooting), and economic aftershocks are still felt today, despite the commitment of more than $116 million in riot-recovery funding.

While there are no easy fixes that will keep Ferguson from suffering a similar fate, quelling anger is a first step. Various experts and commentators have suggested policy changes that could help rebuild trust in the police department, including a consent decree like the one that eventually helped the LAPD improve relations with residents of L.A.

No matter what path Ferguson takes, says Matheson, the sooner the violence ends, the faster the local economy can begin to heal.

 

MONEY buying a home

How to Beat Newly Hot Real Estate Markets

Buying in a hot market can be tough. These tips can help beat the competition.

How much house will $2 million get you in the United States these days?

You could buy 25 pretty nice four-bedroom, two-bath homes in Cleveland, Ohio. Or, you could get just one modest ranch house in Los Altos, California, the most expensive real estate market in the country, according to a new survey by Coldwell Banker.

But, then again, you would probably get beat out by an all-cash buyer offering a higher bid.

Competition is fierce in today’s emerging hot real estate markets because the inventory of available properties is still extremely low. In areas like Silicon Valley, though, the economy is humming and buyers have plenty of money.

Los Altos is in the middle of the action, surrounded by the corporate headquarters for Google, Facebook and dozens of other major tech companies, as are other California cities: Newport Beach, Saratoga, Redwood City and Los Gatos, the rest of the top five on Coldwell’s list.

As other markets heat up around the country, buyers can learn a few things from what’s happening in some of the hottest places.

NEW MATH

If there is one thing Silicon Valley’s techies know, it’s algorithms. You’re going to need one in today’s top markets to figure out how far above asking you need to bid.

Sumi Kim Hachmann, a 32-year-old researcher at Quora.com, snagged her three-bedroom, one-bath house in Menlo Park last year after six months of trying. Each time she found a house she liked, she crunched the square footage and comparable sales to figure out how much to bid, refining her math each time she lost out.

She liked a fixer-upper listed at $1.1 million, and was willing to bid $100,000 over asking. Her agent told her to double that, at least. She did, but the sellers countered. The house sold for $1.4 million to somebody else

“That was definitely discouraging,” Hachman says. “But it was a learning experience.”

Next time, she went in with a strong offer that amounted to $1,000 per square foot, and won. Now, a year later, she’s incredulous that houses in the neighborhood are going for double that.

While price is largely controlled by location and size, you need to add a premium to your offer if you need a mortgage, says Joe Brown, managing broker of a Coldwell branch in Los Altos. Bids being equal, sellers prefer all-cash because there is less risk. Price will still prevail, though, so a higher bid from a qualified buyer with a mortgage should win.

Another caveat: Keep contigencies out of the purchase agreement. Doing this is difficult for mortgage-seekers because banks typically require that the purchase price match the appraised value of the house. With prices going so far above asking, that can get tricky.

“You either ask them to put a lot more down or have them sign something that they will waive the appraisal contingency,” says Ducky Grabill, a founding agent of Sereno Group realty, who is based in Los Gatos.

Grabill also suggests having the lender call the listing agent and let them know they will guarantee the financing.

LOWER EXPECTATIONS

Another strategy is to buy below your price point, says Brown. If you have the resources for a $2 million house but cannot compete with stronger buyers, then aim for $1.5 million and turn it into the house you want.

This is a modification of the old “buy the worst house in the best neighborhood” adage. But you cannot just sit on this kind of property and hope it will appreciate; you’ve got to renovate.

That’s what Amy Bohutinsky, chief marketing officer of real estate site Zillow.com, did with her own purchase of a fixer-upper in the Seattle area two years ago.

“If you buy it with the intent of fixing it up, it can be an easier way” into a house than engaging in a bidding war, Bohutinsky says.

She also recommends expanding the boundaries of your search: considering for-sale-by-owner properties, preview listings like Zillow’s “Make Me Move” section and “coming attractions” on listing sites.

BE READY

It is not enough anymore to show up at an open house pre-qualified for a mortgage and with a letter that sells yourself. You may need to have an engineer or other inspector come along, says Sereno Group’s Grabill.

She had a client recently clinch a $2 million all-cash deal after his first viewing, but only because he was able to do his due diligence on the foundation issues immediately.

This buyer was one of those bidding down on a property. He was really in the market for more like $2.5 million, and will put the remainder of his budget into fixing it up.

“They are throwing so much more money at properties to get it. It’s a little crazy,” Grabill says.

MONEY buying a home

Homebuyers ‘Addicted’ to Online Listings—But Accuracy Is Still an Issue

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Getty Images

Almost two-thirds of recent home buyers surveyed said they were "addicted" to online listings, but only 22% said they were always accurate.

A new study from Discover Home Loans confirms the extent to which technology has transformed the way people buy and sell houses. But it also shows the limits of using online real estate sites when shopping for a home.

According to the survey, which polled 1,003 recent homebuyers on how technology affected their experience, 83% used listings sites like Zillow and Trulia, more than any other online resource. But the majority of respondents weren’t always satisfied with what they found. Only 22% said online listings were always accurate. The results reinforce previous studies, which found a disparity between the accuracy of listings on third-party websites and those found on local Multiple Listing Services, the primary tool of real estate brokers. Those listings tend to be updated more quickly than consumer-facing sites.

Zillow and Trulia have previously responded to such studies, noting that their sites also offer special tools to educate buyers on neighborhoods and housing conditions, and include listings of for-sale-by-owner, premarket and new-construction homes that don’t show up in MLSs.

Alison Paoli, public relations manager with Zillow, noted that while she hadn’t seen the full research, “what’s more important to understand about a study like this is that there is no gold standard for [accuracy in] real estate listings.” She added that Zillow gives brokers, agents, and MLSs the option of sending their listings directly at no cost. “Accuracy is top priority for us,” Paoli.

Accuracy aside, the survey showed that buyers still love trolling listing websites. The vast majority of respondents said technology made them feel “smarter” and “more confident,” and almost half said it helped them save money. In fact, two thirds said looking at online property listings “reached the point of becoming addictive.”

T.J. Freeborn, senior manager of customer experience at Discover Home Loans, said the results show that buyers still need a combination of online information and local expertise. “I think technology is an incredibly useful tool in this marketplace, but Realtors have a very deep knowledge of neighborhoods and particular homes,” Freeborn said.

Discover’s data shows buyers tended to shun social media when looking for houses—a surprising result in a world where virtually all other activities are in some way connected to Facebook and Twitter. Only 25% of homebuyers collected ideas on social media, and just 29% used social media to consult friends. (Given how hot some real estate markets have become, perhaps their reluctance can be chalked up to justifiable paranoia about oversharing.)

That data could have implications for home sellers. At least for now, a social media presence is far less important than making sure your home is listed online.

Get answers to your home buying questions from MONEY101:
How Do I Shop for a House?
How Do I Choose the Right Real Estate Agent?
How Do I Negotiate the Best Price on a New Home?

 

MONEY housing

How to Cut Your Single Biggest Expense in Retirement

bouncy castle in suburbia
An age-proof home is one where you can live safely, comfortably, and conveniently in your older years. Sian Kennedy—Getty Images

You're going to spend a lot on housing in retirement. Here's how to make sure your home serves your needs as you age.

The single biggest expense you face in retirement is housing, which accounts for more than 40% of spending for people 65 and older, according to the Employee Benefit Research Institute. Yet all too often, you end up shelling out those bucks for places that don’t serve your needs well as you age.

By age 85, for example, two-thirds of people have some type of disability. If you can’t get around your house or community or you don’t have easy access to the medical and social services you need, you could land in a costly nursing home prematurely, according to a Harvard Center for Joint Housing and AARP study.

“People don’t think about how their home will support their needs until they face a health issue,” says Amy Levner, manager of the Livable Communities initiative at AARP. “It doesn’t have to be a catastrophe either. Even something as simple as a knee replacement could make it difficult to stay in your home or drive, at least short term.”

Here are 3 ways to make sure you’ll stay comfortable in your home as you get older.

1. Get your house in shape: Three-quarters of people would prefer to stay in their current home as long as possible in retirement, according to AARP. Yet just 20% live in a house with features to help them live safely and comfortably there in their older years. Among them: a first-floor bedroom and bath so you can live on the main level if stairs become hard to climb, wider doorways that make getting around easier if you need a walker or wheelchair, and covered entrances so you don’t slip in rain or snow.

Those can be pricey renovations, so the best time to do the work is while you are still employed so that you can use current income to pay the bill instead of tapping savings, says Levner. But many adaptations that make a big difference when you’re older are inexpensive. Those include raising electrical outlets to make them easier to reach, putting grab bars and a shower chair in the bathroom, and installing nonslip gripper mats under area rugs. (A list of the most important steps to take and their typical cost is below.)

2. Take it down a notch: To save money without necessarily moving far away—two-thirds of people want to remain in their hometown when they retire, AARP says—you can downsize to a less expensive, more manageable house. You could use the proceeds from the sale of your current home to add to your retirement savings, while significantly cutting maintenance costs.

The potential savings, based on estimates from the Center for Retirement Research, are compelling. If you move from a $250,000 house to a $150,000 one, for instance, you could net $75,000 to add to your savings, after paying moving and closing costs (typically 10% of the sale price). Meanwhile, your annual bill for upkeep would probably fall from around $8,125 to $4,875, assuming typical property taxes, insurance, and maintenance of about 3.25% of the home’s value. These calculations assume that you own your home outright; if you still have a mortgage, the savings you would reap from downsizing might be even bigger.

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Move in step with your peers: Relocating can also help you cut expenses if you move to an area with lower taxes and a cheaper cost of living. Look for places that have good public transit, transportation services for seniors, and walkable, bike-friendly neighborhoods that are a short distance to stores and entertainment and close to medical facilities.

Where should you go? AARP is now working with dozens of places to create age-friendly communities. They include Birmingham, Denver, Des Moines, and Westchester County in New York (find the list at aarp.org/agefriendly). Next spring AARP will launch an online index with livability data about every community in the U.S. For more inspiration, check out MONEY’s Best Places to Retire.

MONEY home prices

The World’s 10 Most Expensive Houses—and Who Owns Them

Feast your eyes on some of the priciest homes on the planet.

The owners of the world’s most luxurious houses can be a mysterious bunch. We all know who owns Buckingham Palace, but does anyone recognize the name Tim Blixseth? Or know the Indian billionaire who built a 27-story apartment building just for himself? We’re guessing not.

Well, the mystery ends here. Using information provided by CompareCamp.com, we’ve got a rundown of the world’s 10 most expensive houses—modern castles, really—and the people lucky enough, and rich enough, to own them.

 

  • 7 Upper Phillimore Gardens

    Location: London
    Value: $128 million
    Details: This 10-bedroom prep school turned mansion has an underground swimming pool, a sauna, gym, cinema, and even a panic room. That’s all in addition to an interior covered in marble, gold, and priceless artworks.
    Owner: Olena Pinchuk—daughter of Leonid Kuchma, Ukraine’s second president. She is known for being the founder of the ANTIAIDS Foundation and a friend of Elton John.

  • Kensington Palace Gardens

    Location: London
    Value: $140 million
    Details: Located on London’s Billionaires Row, the already tricked-out pad will soon add an underground extension with a tennis court, health center, and auto museum.
    Owner: Roman Abramovich—a Russian billionaire and owner of the private investment firm Millhouse LLC. He’s probably best known in the West as the owner of the English Premier League’s Chelsea Football Club.

  • Seven The Pinnacle

    Yellowstone Club near Big Sky, Montana.
    Erik Petersen—AP Photo/Bozeman Daily Chronicle

    Location: Big Sky, Montana
    Value: $155 million
    Details: The largest property in the Yellowstone Club, a private ski and golf community for the mega-rich, the house has heated floors, multiple pools, a gym, a wine cellar, and even its own ski lift.
    Owners: Edra and Tim Blixseth—Real estate developer and timber baron Tim Blixseth cofounded the Yellowstone Club, but the club’s bankruptcy, a divorce, and other troubles have seriously reduced his wealth in recent years.

  • Hearst Castle

    Indoor Pool at Hearst Castle, designed in style of Roman baths.
    Doug Steakley—Getty Images/Lonely Planet Images

    Location: San Simeon, California
    Value: $191 million
    Details: The 27-bedroom castle, used in the movie The Godfather, has hosted John and Jackie Kennedy, Clark Gable, Winston Churchill, and other famous figures.
    Owners: William Randolph Hearst’s trustees—The castle, built by the country’s first newspaper magnate, is now a heritage and tourist site and part of the California Park System.

  • Ellison Estate

    Location: Woodside, California
    Value: $200 million
    Details: Less a house than a compound, this 23-acre property is home to 10 buildings, a man-man lake, koi pond, tea house, and bath house.
    Owner: Larry Ellison—Co-founder of Oracle and the third-richest man in the world in 2013, according to Forbes.

  • 18-19 Kensington Palace Gardens

    Location: London
    Value: $222 million
    Details: Another property on Billionaires Row, 18-19 sits alongside the home of Prince William and Kate Middleton. This particular residence has 12 bedrooms, Turkish baths, an indoor pool, and parking for 20 cars.
    Owner: Lakshmi Mittal—The head of Arcelor Mittal, the world’s largest steel manufacturer, and, according to Forbes, one of the 100 richest men in India.

  • Four Fairfield Pond

    Location: Sagaponack, New York
    Value: $248.5 million
    Details: This 29-bedroom home sits on 63 acres and has its own power plant. Inside, there are 39 bathrooms, a basketball court, bowling alley, squash courts, tennis courts, three swimming pools, and a 91-foot long dining room.
    Owner: Ira Rennert—Owner the Renco Group, a holding company with investments in auto manufacturing and smelting. He also has holdings in metals and mining.

     

  • Villa Leopolda

    Villefranche-sur-Mer, south-eastern France, the villa of Leopolda, property of the widow of businessman Edmond Safra, Lilly Safra.
    Eric Estrade—AFP/Getty Images

    Location: Cote D’Azure, France
    Value: $750 million
    Details: This 50-acre estate includes “a commercial sized green house, a swimming pool and pool house, an outdoor kitchen, helipad, and a guest house larger than the mansions of most millionaires,” according to Variety. The house was famously used as a set in the 1955 Hitchcock classic To Catch a Thief.
    Owner: Lily Safra—A Brazilian philanthropist and widow of Lebanese banker William Safra. Her husband died when another one of the couple’s homes burned down, apparently due to arson.

  • Antilia

    India, Maharashtra, Mumbai, Kemp's Corner, Antilia aka the Ambani building on Altamont Road.
    Alex Robinson/AWL Images Ltd.—Getty Images

    Location: Mumbai, India
    Value: $1 billion
    Details: The Antilia isn’t even really a home in the traditional sense. This 27-story, 400,000-square-foot building has six underground parking floors, three helicopter pads, and requires a 600-person staff just to maintain it.
    Owner: Mukesh Ambani—India’s richest man, with a net worth of $23.6 billion, according to Forbes. Ambani made his money running Reliance Industries, an energy and materials company.

  • Buckingham Palace

    Buckingham Palace
    FCL Photography—Alamy

    Location: London
    Value: $1.55 billion
    Details: Technically still a house, but certainly not for sale, the Queen’s residence was valued at roughly $1.5 billion by the Nationwide Building Society in 2012. The property holds 775 rooms, including 19 state rooms, 52 bedrooms, 188 staff rooms, 92 offices, and 78 bathrooms.
    Owner: The British Sovereign—Currently Queen Elizabeth II, who has ruled since February 6, 1952.

    See CompareCamp.com’s full graphic, including more images of these home, here

    Read next: 4 Things Millionaires Have in Common, Backed by Research

MONEY retirement planning

The 3 Best Ways to Boost Your Spending Power In Retirement

Location, location, location

You’ve heard the old saw that the three most important things in real estate are location, location, location. Well, that truism can apply to retirement too. Depending on where you retire, you may be able to dramatically boost the spending power of your Social Security check and your retirement nest egg, not to mention improve the quality of your post-career life.

Relocating in retirement isn’t the right strategy for everyone. If you like and can afford your house, have a solid network of family and friends to socialize with, and you enjoy your neighborhood and all it has to offer, you may not want to consider a change.

But if you’re looking to stretch your retirement resources—or rewrite the script a bit in the retirement phase of your life—then relocating may be just the right move. If nothing else, lowering your living costs will give you more flexibility in withdrawing money from your nest egg and reduce your chances of going through your savings too soon.

The main reason that a change in venue can allow you to get a bigger bang for your buck in retirement is that housing costs are the single largest expense you’ll face in retirement. That’s right, even though health care gets all the attention—and health care is definitely a major expense, not to mention one that typically grows as you age—the costs of owning a home or renting eat up the largest share of most retirees’ budgets.

Indeed, a recent Employee Benefit Research Institute study shows that for 65-to-74 year-olds, housing expenses accounted for 38% of total spending, a figure that grew to 42% for those 85 and older. Health expenses, conversely, represented just 12% of the spending of the 65-to-74-year-old group, although that percentage was almost double, 21%, for those 85 and older.

Combine the fact that retirees devote such a large part of their budgets to housing with the fact that house and condo prices vary significantly from one part of the country to another—the median home price is $692,000 in Anaheim, Calif., vs. $91,000 in Decatur, Ill.—and that means moving to an area with lower housing costs may allow you to cut your spending significantly, or divert much of what you had been devoting to housing to other activities like travel, entertainment, hobbies, whatever.

Lowering your housing costs isn’t the only way you may be able to reduce your outlays by relocating. You may also be able to benefit by paying less for the cost of other items and services that can vary widely from one city another, such as health care, food, transportation and (another biggie) taxes.

The gains you can achieve by relocating will be limited if you already live in a low-cost area. But to get a sense of how far your resources might go in different states and metro areas, you can check out the Cost-of-living Calculator in RDR’s Retirement Toolbox. You may also want to take a look at the Regional Price Parity figures published by the Bureau of Economic Analysis. These “RPPs,” as they’re known, measure the differences in price levels between different states and metro areas. If you want to see how the tax bite might vary from state to state, you can check out the info on state taxes at the Tax Foundation and CCH sites.

You don’t want to base your choice of where to live on livings costs alone, however. After all, you also want to be able to enjoy yourself with any extra money you might free up. So if you’re considering relocating—whether for financial or other reasons—you’ll also want to check out the lifestyle and living conditions different places have to offer. Are you okay with the area’s climate? Will you have access to the health care you’ll need? Is there a vibrant sports or arts scene? Are there work opportunities for retirees? These are just a few of the questions you’ll want to ask yourself before making any move.

Fortunately, you can narrow down the number of candidates that meet your criteria fairly easily by consulting one or more of the lists that highlight the most attractive retirement spots. Earlier this week, for example, MONEY Magazine unveiled its annual Best Places To Retire feature. This year’s list profiles nine cities and towns around the country that retirees should find particularly appealing, including three that offer low living costs, three that provide opportunities for an encore career and three that are a good choice for a well-rounded retirement. In addition to highlighting the pros and cons of each area, MONEY also provides pertinent stats for each, which in some cases may be the median home price or cost-of-living index, in others the state income tax or unemployment rate.

For a decision as momentous as relocating, you don’t want to limit yourself to just one source of information. And you don’t have to, as there are plenty of other compilations of retirement spots out there—including ones that focus on cheap places to live in retirement, the best places if you’re living on Social Security alone, and the best places to retire abroad.

Ideally, in the five to 10 years before calling it a career, you’ll want to do what I call “lifestyle planning“—essentially, thinking hard about how you actually intend to live in retirement and assuring you have the resources to realize that vision.

If after going through that exercise you find that there’s a gap between the income your resources can generate and the lifestyle you’d like to lead—or you just want to begin your new life in retirement with a new place to live—think relocation, relocation, relocation.

MORE FROM REALDEALRETIREMENT.COM

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MONEY Ask the Expert

How To Get Your Kids To Do Some Real Work Around the House

For Sale sign illustration
Robert A. Di Ieso, Jr.

Q: I owe my handiness to projects I helped my father with as a kid. But my children show no interest in lifting a hammer. How do I motivate them to become capable do-it-themselfers?

A: Thanks to affluenza as well as the draw of computer-based learning, instead of hands-on tutorials, many of today’s young digital natives are sorely lacking in analog skills. We are creating a generation that may never know how to paint a straight line or re-shingle a shed.

The effects are twofold. First, your kids may grow up into adults who, for every household project, are at the mercy of those few capable peers who become handymen and contractors. They’ll pay every time they need to tighten a rattling window or fix the toilet.

Also this lack of hands-on knowledge is—ironically—a contributing factor as to why other countries are outcompeting the United States in science, technology, engineering, and math education, those so-called STEM subjects where many of the good jobs of the future promise to be.

Getting your kids involved with you in safe, age-appropriate DIY projects is a great way to bolster their “spatial awareness,” an understanding of 3D space and how things work that helps later with engineering and physics, according to Vanderbilt University psychologist David Lubinski.

Thus spending a few hours away from their screens helping you build garage shelves or plant flower bulbs can give your kids a leg up on a career in the very technology they love.

Of course, as any parent knows, telling them that may not be enough to motivate them. Yet don’t resort to bribing your kids with a trip to Five Guys or extra screen time to get them to help out, says Carol S. Dweck, a psychology professor at Stanford University. That sends the message that the job is an unpleasant one that no child in her right mind would want to do.

You’re better off channeling Tom Sawyer and making the project feel fun and interesting. It helps if you pick an exciting improvement task, such as building a fire-pit, hanging cabinets in the recreation room, or painting the kid’s own bedroom in her choice of color (perhaps from a list preselected by you), rather than a maintenance job like snaking a drain or bleeding the radiators. Older youth may be enticed by the chance to use power tools (with plenty of knowledgeable and safe parental supervision).

Projects with relatively immediate gratification, like painting or laying sod, are more inspiring for young minds. Thus make it a project that they’ll get to enjoy the results of—and do it at a time when distractions like video games and social networking are off limits anyway. Then, let her post photos of the finished work on Facebook, if she wants, to help build her pride and a sense of accomplishment in her work.

 

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