Downsizing the Home

[Katsmeow]

The reason I ask is that in our area (mid-Atlantic) most folks don't necessarily downsize just because they retire.

I don't know that it necessarily because of retiring but I just don't want the heavier upkeep and maintenance of the large house now that my kids are going to soon be gone. We live in a 4500 sf house now with all the secondary bedrooms upstairs. If we didn't have kids, we would get zero use out of the upstairs (not even for guests, as we have a guest house). Yet, the existence of the upstairs creates "value" for which we have to pay property taxes, increases utility bills, more places to have to possibly clean/repair/maintain. It is just having something that acts as a drain on finances for no benefit to us. By building a smaller house we get to have exactly what we want but with every foot of the space being usable to us and resulting in less overall cost.

 

[ziggy29]

We've moved from a 4/2.5, 2250 sf house to a 2/1, 1150 sf house and I think we've discovered that the sweet spot will be somewhere in the middle. I'm thinking something like a 3/1.5 or 3/2 with 1500-1700 sf.

 

[Midpack]

We've moved from a 4/2.5, 2250 sf house to a 2/1, 1150 sf house and I think we've discovered that the sweet spot will be somewhere in the middle. I'm thinking something like a 3/1.5 or 3/2 with 1500-1700 sf.

That's scary. We have a 4/2.5 2270 sf house and are shooting for a 3/2 1300-1500 sf next. Really not sacrificing useable space, just doing without a formal dining room, formal living room, one spare bedroom and a half-bath - all of which we almost never used anyway.

 

[LightningDawg]

I may be mistaken, but I've always thought this isn't a big factor if you are selling and buying. While the price of your home may be depressed by the recession, the price of the house you'd be buying is presumably depressed also. Just as if you sold at the top of the bubble and bought while still in the bubble, both prices would be inflated. So I've never worry about that aspect, always thought it was somewhat of a benefit, but maybe I'm missing something...

If you're trying to sell at the peak and buy at a low, that's something altogether different (not unlike buying and selling stock). I'd think you'd have to be prepared to wait quite a while, most likely a few years (also like stock).

I agree. We sold our big 6 bedroom house on large lot,perhaps at a lower price given the depressed housing market, but we had also bought our FINAL home which was much smaller, at a reduced price also. We had to carry two mortgages for 7 months, and feel fortunate to have sold the big house. We then sold some condos, paid off the new home, and invested the rest. In this economy, it is nice to be completely debt free.

 

[Ken11]

I just did what you are considering here.
It took me 6 mos to sell.
We had to take some price reductions.
Closed December 29.
We have all our belongings in storage.
I had almost no bills last month ( mostly visited family & friends)!
We moved south (just in time to escape this horrible winter) and are renting by the month.
Plan to spend as much time renting as we need in order to be comfortable with a decision to settle in a new town.

So far this has been fun.
We are on budget.

Housing pricies continue to be weak.
I'm glad I waited and sold before making any moves
Having cash and all the time in the world seems to position us well for a deal on real estate.
We just need to be disciplined.

We will be going from a very full 3750 sq ft house to something around 2200.
We already sold off a bunch of stuff.
We will have more to go once we know our final destination.
Start decluttering now.
The amount stuff you can accumulate in a big house is riduculous.
So far the downsizing feels good to me.
My wife has more mixed feelings.

 

[CorporateSoldier]

Great thread. We own a 4/2.5 2100 sf house and have resisted buying a much larger house figuring our kids (teenagers) would be moving out fairly soon. Not buying a big luxury home is also part of the FIRE strategy. It was plenty large enough to raise kids but we always wanted a bit more. Now I am thinking it may be the perfect size after they all move out.

All I really need is a 3 car garage - 2 car garage not big enough for all the toys I hope to buy after the kids move out.

 

[Gone4Good]

But since DW and I intend to do some extended traveling, I am wondering if we should just sell our home and rent a condo for a couple of years while we do some extended traveling.

My question would be "define extended traveling?"

We opted to have no physical residence at all and are bopping around the US in an RV. When we're done with this in a couple of years, we'll probably bop around the rest of the world, and still have no single place to call home.

If you're talking about traveling less than that, then you have to weigh the amount of time you're going to be in each place versus the cost of carry for the house/apartment. Personally, I have a real hang-up about paying to maintain two residences, even if one is a hotel. If I were planning to be gone six months or more out of the year, I'd want to make my "home base" some place very inexpensive, or consider doing away with it altogether in favor of more time on the road. I'd probably also favor an apartment where all of the external maintenance (snow shoveling, lawn care, etc) was managed by someone else.

 

[Amethyst]

I would like somebody to prove me thoroughly wrong, with examples if possible, on an impression we have about downsizing one's residence. Every time we talk about it, we end up feeling like downsizing would = defeat, because:

Trading a larger, luxury residence with private yard for a smaller place means either:

a) smaller = cheaper = not as high quality construction, not as desirable of an area, neighbors not so nice = a distinct move down. This is demonstrably true in our general area.

or,

b) smaller = just as expensive as bigger, because of all the gated security fees/homeowner's association fees/housekeeping fees/common area maintenance fees and this'n'that fees so that your smaller place won't be like a).

Amethyst

 

[freebird5825]

I have plans to turn my (completely unused) dining room into a home gym. Can't wait! I have laid it out on graph paper, which gives me an idea of how much equipment I can fit in there and how I could arrange it. When we get together with friends or relatives to eat, generally that happens at a restaurant instead of at someone's house.

Sounds like a great re-utilization plan.

My dining room is medium size. I have an expandable solid cherry table and 4 chairs in there. The room also contains my goldfish aquarium, the majority of my houseplants and a slim profile china hutch. That table has been used for sewing, tax preparation, paperw*rk sorting, small scale repair projects, planning my garden layout, studying, etc etc.
The only time we use the table for eating is when the meal is too messy for our lap style bamboo TV trays. We also have a peninsula with high bar stools between the kitchen and the [-]anything but[/-] dining room if [-]the dining room table is covered with junk[/-] we need an informal eating place.

We never hosts guests for dinner. Too much mess to clean up afterwards.

Regarding downsizing...I already am downsized. My original "starter" house is 1700 sqft with an integrated 2 stall garage. If we relocate, it would be a permanent move out of the area completely. Mr B and I do not have the financial means or desire to maintain 2 properties.

 

[meierlde]

One question to evaluate is how much it will cost to bring the house up to where you can stay long term. This ranges from lever door handles, thru 36 inch wide doors ADA toilets, low to no sill shower stalls grab bars in places and the like. This is said to be showing up in new homes as universal design, although none of the ideas are exactly new. It is that buyers are more aware that we are all getting older every day.

 

[FreeAtLast]

I think that I will stay where I am. New kitchen,roof, A/C, Storm Shutters and Paint all within the past 5 years. House paid off about 5 years ago.

I am 59 now and I suspect that my view will change in about 10-15 years.

 

[Katsmeow]

Trading a larger, luxury residence with private yard for a smaller place means either:

a) smaller = cheaper = not as high quality construction, not as desirable of an area, neighbors not so nice = a distinct move down. This is demonstrably true in our general area.

or,

b) smaller = just as expensive as bigger, because of all the gated security fees/homeowner's association fees/housekeeping fees/common area maintenance fees and this'n'that fees so that your smaller place won't be like a).

Amethyst

Depends on where you live. We are building a smaller house on acreage. The neighborhoods are comparable except the new one has no HOA (it is built out and I'm happy with it). I live on acreage and don't really want gated or HOA fees, etc. (all of which I've had in the past).

The house we are building will be of good construction equal or better to the house we are selling but more energy efficient and smaller (so lower taxes, utilities and maintenance).

 

[CorporateSoldier]

One question to evaluate is how much it will cost to bring the house up to where you can stay long term. This ranges from lever door handles, thru 36 inch wide doors ADA toilets, low to no sill shower stalls grab bars in places and the like. This is said to be showing up in new homes as universal design, although none of the ideas are exactly new. It is that buyers are more aware that we are all getting older every day.

Very true but you would have to weigh those costs against the various expenses involved in moving. This stuff can add up:

• realtor commisions
• closing costs
• stuff for the new home: window treatments, maybe furniture, etc.
• cost to transport yer stuff

I think these expenses add up more than most folks realize. Moving is expensive.

 

[toreornot]

I'm planning to downsize too, and although I'm shooting to FIRE in 2013, I'm already starting the clean up of the clutter in the garage. DW and I live in a 4700sqF home that we bought last year because I thought it was such a bargain per sqF that the price could only go up. i was wrong of course. 2100 to 2500 is probably teh right size for us, from the area homes we have seen in the past.
I know rental is the sensible way to go nowadays, but I think I'm one of those people that needs to be a homeowner.

 

[GRambler]

We have intentions of relocating in 5-10 years and have an area in mind. Probably downsize from 3000 sq ft and acreage to about 2000 with less property. We won't sell our house anytime soon but we're looking for a home to buy now in the area we want.
Given the down market deals are abound so we're trying to find the house we'd like to move into and rent it out through an agency. But, even if we later decide we want a different house we then have options. Keep the house as a rental, or sell it for our new house. Having a house in the area already can hedge you against property price increases since both should increase.
The end goal is for the house we're in now to become a liquid asset when it sells and not have to reinvest it, at least not all of it, back into real estate since it's paid for.

 

[Rich_by_the_Bay]

If they are like us, they go out to eat. I think that's how the room got its name...

Me: "James and Judy are coming over. Let's go out to eat."
DW: "Great!"

You can always use the 5Wer.