"Downsizing on the house, if you want to, can free up a big chunk of $$'s that you could invest and use for living expenses."

Chuck-Lyn and malakito both mentioned this. Is it better to sell my current place, take the profit (about $150K), and invest it? Then I would have to rent. Or should I buy a smaller place for all-cash and not have a monthly housing payment at all?

I'm ready to downsize the house, but I live in an expensive city and would have to see what $150K would buy here. I've been spoiled by living in a low crime area, etc.