I’m over 65, disabled, and am getting a $200,000 divorce settlement. Can I afford a house in Florida, or should I look in other states?

by user

I am about to receive $200,000 in a divorce settlement. I’m looking to buy a home, but I am frustrated with my options.

I’ve been disabled since 2012, and I am over 65. If I work again, it will only be part-time and I’ll need my Social Security and work money to pay for healthcare and expenses of daily living. So I really cannot buy any housing over $200,000. 

Given that interest rates have risen, will housing prices drop and if so, by how much?

I live in Florida right now, and housing is extremely expensive, along with food prices rising another 10 to 50 cents every 2 weeks. I heard on public radio that the housing market in Florida won’t change much, due to the high demand.

‘I live in Florida right now, and housing is extremely expensive, along with food prices rising another 10 to 50 cents every 2 week.’

I’d like to know if housing costs go down in other states? I am considering going back to Virginia, or the outskirts of Washington D.C. I want to leave my daughter a small home that’s paid for. I don’t want to rent. It’s very important to me to leave her a home. Thank you for your time.


The Big Move’ is a MarketWatch column looking at the ins and outs of real estate, from navigating the search for a new home to applying for a mortgage.

Do you have a question about buying or selling a home? Do you want to know where your next move should be? Email Aarthi Swaminathan at TheBigMove@marketwatch.com.

Dear Frustrated, 

I don’t have a crystal ball. It’s likely that home prices will go down, but it won’t be a fire sale, like what we saw after the Great Recession. So it may be worth starting your search now.

It’s a tough time to buy a home. Not only are mortgage rates high, the number of homes available for sale is still low. Buyers are not willing to give up homes that they secured with an ultra-low mortgage rate.

Which means homes are still expensive – even unaffordable – for many buyers.

In your situation, you’re right, Florida is expensive. According to data from Zillow

provided to MarketWatch, only 15% of homes listed for sale in Florida are below $200,000. 

Sure, home prices have begun to drop. According to a recent report from &P CoreLogic Case-Shiller, which tracks home prices regularly, prices did drop in the latest month

But they’re still up by 8.6% from last year. So while prices aren’t increasing per se, they’re still expensive. 

Mark Zandi, chief economist at Moody’s Analytics, told MarketWatch that he expects home prices in the U.S. to fall by as much as 10% peak-to-trough over the next 2 to 3 years. That means that prices will drop, but take into account that they’ve also increased by 40% since the pandemic hit. 

“I don’t expect U.S. house prices to crash,” Zandi told me. “Of course, if the economy suffers a recession, then the house-price declines will be more significant, but even then a crash seems like a stretch.” 

‘I don’t expect U.S. house prices to crash … Of course, if the economy suffers a recession, then the house price declines will be more significant, but even then a crash seems like a stretch.’

— Mark Zandi, chief economist, Moody’s Analytics

I’m assuming you’re planning to buy the property outright, all in cash, and not take out a mortgage. 

So here are two options: Either look for a smaller home in a not-so-hot part of town in Florida, or pursue that idea of going up north.

There are still many single-family homes and apartments available in Florida that are under $200,000. But they may be small, or require some work. Weigh those options, if you’re up for it. 

When the time comes for your daughter to inherit the home, maybe she has the financial means or the appetite to fix it up. So talk to her, see what her priorities are.

If she prefers an apartment, there are some options available by the beach. But take the cost of property insurance into account. With the storm and flooding risks in Florida, that can really bust your budget.

(Do also remember that condos have a monthly Homeowners Association fee).

The other option is to move to Virginia or the outskirts of D.C. According to Zillow, 17.1% of homes in Virginia are below $200,000 — a higher percentage than Florida. 

For reference, between both single-family and condos, about one-fifth of homes in the U.S., are listed below $200,000.

Also ask your daughter if she prefers a house in a suburban area, or a unit in the city. The price ranges vary by area.

The obvious downside of moving so far up north: The cold. Winters can be tough, and if you or your daughter are used to the warmth of Florida, it can be a bit jarring and difficult to spend the colder months in Virginia or D.C. 

If you’re fine with that, it’s worth hiring a realtor to help you shortlist potential homes for sale in Virginia or D.C. 

The bottom line: There are few buyers in this market. So start with a search for homes in Florida first, then move that search up north. Broaden your search to houses and condos. And if you find something good, jump.

Sellers are motivated to get their homes off their backs, so there could be room for negotiation.

Ultimately, I get that you don’t want to rent. Renting can be unstable, especially if you have a landlord that jacks up your rent at the end of your lease. 

So it’s time to get those hands and feet moving and start seeing houses. All the best for your search.

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