Should You Downsize Your Home?
Downsizing was once considered pretty mainstream. As homeowners grew older and as kids moved out, relocating to a smaller house became the go-to move.
But as more people continue to stay in their homes, the relevancy of downsizing is up for debate. RealtyHive is here to investigate: Is downsizing worth it, or has this trend phased out?
The Benefits of Downsizing
Downsizing homes was a popular trend for reasons that are still pretty valid:
- Less to manage. Taking care of a 3- or 4-bedroom, two-story home or massive yard/property is often very challenging for older folks. Smaller homes are much easier to manage.
- Less expensive. Energy bills are significantly less in smaller homes. Especially if you’re not using all the space of your home anymore, it doesn’t make sense to pay for it.
- More accessible. Navigating stairs in older age isn’t just tricky, it’s downright dangerous. Moving to a smaller home can eliminate many of the hazards in a bigger home.
- Could be profitable. If you bought your house for the median price of $47,200 in 1980 (we know, our jaws dropped too), you could very well pay for a smaller home outright after selling. Of course, this is assuming your existing home appreciated in value.
Why People Aren’t Downsizing (As Much)
A big reason for this is that humans are living longer. Whereas a person in their 50s might have looked into downsizing several decades ago, many people in the 21st century are fully functional in their homes, well into their 60s and 70s.
The other main factor is that technological advances make it easier than ever to stay in a person’s home. Stairlifts, chair lifts, and even elevators take hours or days to install. Smart homes are designed with convenience in mind. Many people would rather make their current home more accessible if it means they get to stay put.
The “Silver Tsunami”
Zillow reports that “33.9 percent of owner-occupied U.S. homes are owned by residents aged 60 or older, and 55.2 percent by residents aged 50 or older.” In the next few decades, nearly 90% of houses will become available as the baby boomer generation passes away. While many people currently struggle to find a house, this will rapidly change in the coming years.
But what does that mean for downsizing?
Since people are staying in their homes longer, there’s a shortage of available homes and the housing market is incredibly competitive. For many boomers, it’s currently a struggle to close on a smaller home that makes financial sense. Downsizing has a lot of potential benefits, but not if buying a new home will wipe out a person’s savings.
Is Downsizing Worth It?
- want to downsize AND
- find a smaller home that’s well within your budget AND
- you can make a substantial profit through selling your current one
then downsizing is a good option. But if you want to stay in your home and age in place and have the means to do so, that will also work.
One of the most important things to remember: nothing in life is certain, and this becomes even more true as we get older. You might plan on downsizing and living in your new house for a decade or two, then deal with unexpected health issues that require assisted living. No one likes thinking about it, but it’s necessary to keep in mind.
If downsizing feels like the right move for you and it makes financial sense, then go for it! If you have to tap into your retirement to downsize, if the housing market is not favorable for downsizing in your area, or if making your current home more aging-friendly will take much less time and money, then don’t feel the need to downsize.
Ultimately, the decision is yours, but RealtyHive can help. Look through our listings to find a home in your area (or even somewhere far away) to see if downsizing would work for you.