Downsizing

[tflannery]

I am 60 years old and we are looking to downsize. We are basically empty nesters right now. We live in Chicago area and it still is overwhelmingly a sellers market (from what I have been told). Our preference is to move to townhome. We have decided to put our house on the market in early May. If we get our price we will quickly move to buy our next home. It's obviously a little tricky because supply is extremely low and I am not certain we can find the home of our choice if we sell.

Anyway, I am just wondering how people that are downsizing are going about this process.

p.s. is the federal government or any state or community doing anything to solve the housing crisis. All new construction is high end in our area, I never see affordable housing being built. I really feel bad for the first time home buyers. The big reason we are downsizing is to help our kids at some point to buy their first home. Not sure how that will look, but we would like to help with the down payment.

 

[fosterscik]

It's so market/timing dependent. We started planning to downsize 5.5 years ago. We explored areas out of state, picked a lot and builder and waited for it to be built (1850 sq ft). Only after we could move in did we sell the old place. It could have gone badly - Covid was just reaching the maximum panic stage when we wanted to sell. But we built at precovid prices and sold when prices had not really skyrocketed. We did get a great mortgage rate on the new place.

I mention all this to emphasize how different our experience was to what you are facing. Unless you get replies from someone buying & selling over the last few months it may not help you.

 

[Koolau]

p.s. is the federal government or any state or community doing anything to solve the housing crisis.

Don't know about the FEDs but our state actively discourages new construction. A news article recently stated that the cost of a new home is (wait for it) 56% due to permitting! You can't make this stuff up.

 

[Diogenes]

It's been interminably a seller's market, and probably will thus remain... very frustrating for us potential buyers! I sold a house after 20 years of ownership, at a loss. Yes, a loss! Long story, heinously frustrating, but what's done is done... and have been a renter for 4-5 years, waiting for the market to ease up. It's been a long wait!

As for the question of downsizing, the problem is that (1) persons occupying smaller houses don't seem to be in any hurry to sell, while (2) lots of potential buyers want a smaller house. This flattens the relationship between square footage and market price. Starter homes are getting relatively more expensive, while mansions are getting relatively cheaper.

If I had a comfortable, livable house at the moment, I would NOT downsize! I'd retire in place, then die in place.

 

[Koolau]

It's been interminably a seller's market, and probably will thus remain... very frustrating for us potential buyers! I sold a house after 20 years of ownership, at a loss. Yes, a loss! Long story, heinously frustrating, but what's done is done... and have been a renter for 4-5 years, waiting for the market to ease up. It's been a long wait!

As for the question of downsizing, the problem is that (1) persons occupying smaller houses don't seem to be in any hurry to sell, while (2) lots of potential buyers want a smaller house. This flattens the relationship between square footage and market price. Starter homes are getting relatively more expensive, while mansions are getting relatively cheaper.

If I had a comfortable, livable house at the moment, I would NOT downsize! I'd retire in place, then die in place.

Some larger homes are set up so that you can shut off portions and make the house "small." I could deal with that if need be.

 

[Trailwalker]

We have a 2800 square foot house on a few acres that we put on the market a few weeks ago. Closing is set for mid-May. We are leaving Wisconsin for a warmer climate, but aren't in a hurry to buy a new house. We're going to give away a lot of stuff and put the rest in storage. Then take at least part of the summer to reset in our camper. Eventually, we plan to downsize to 1500 to 2000 feet on a small city lot. We're nervous about it but also looking at it as an adventure.

 

[Delawaredave5]

I've never understood "downsizing". Examples I've seen never end up reducing invested capital, nor is there much "maintenance reduction". Obviously a 5,000 foot home on 5 acres to townhome is a different story. We are 2800 feet on 1/4 acre. Social reasons or over 55 communities, I get.

Instead of downsizing the space, we "downsized the stuff". Over last year we've been "minimalizing" (look up Joshua Becker on Youtube). Removed thousands of pounds of stuff. It has been liberating.

"An empty room never needs organizing"......

 

[Aerides]

"An empty room never needs organizing"......

Yeah, but it still needs dusting. So I can see wanting to go from 3k+ square feet to half that.

But, not from say 2500 down to 1500, then there's less point. The OP is also looking to pull out some equity so there is a 2nd goal.

p.s. is the federal government or any state or community doing anything to solve the housing crisis. All new construction is high end in our area, I never see affordable housing being built. I really feel bad for the first time home buyers. The big reason we are downsizing is to help our kids at some point to buy their first home. Not sure how that will look, but we would like to help with the down payment.

No. New home construction is getting impacted by current trade...issues, and likely won't improve any time soon. But beyond that, builders have tended to move well past the first-time-home market, as it's more lucrative to build a mcmansion on that same lot. Where I live (granted, 98% built out) any new construction is luxury.

 

[Trailwalker]

I've never understood "downsizing". Examples I've seen never end up reducing invested capital, nor is there much "maintenance reduction". Obviously a 5,000 foot home on 5 acres to townhome is a different story. We are 2800 feet on 1/4 acre. Social reasons or over 55 communities, I get.

Instead of downsizing the space, we "downsized the stuff". Over last year we've been "minimalizing" (look up Joshua Becker on Youtube). Removed thousands of pounds of stuff. It has been liberating.

"An empty room never needs organizing"......

Moving to a smaller place helps to force getting rid of the "stuff." When we last moved fifteen years ago, we brought all of our "stuff" and then accumulated more stuff with the large outbuildings on our property. Now that the kids are gone, it's time to unload and get smaller. We don't need as much stuff or space. And a 300 foot driveway on a hill in a northern climate isn't fun anymore. We probably won't reduce our invested capital, but we won't have stairs anymore (which is a big deal for DW). All of our stuff needs to fit into a 10 x 15 storage unit. It forces us to take a hard look at things we haven't touched in years and let go of them. It is hard and liberating at the same time.

 

[jazz4cash]

They have incentivized developers to provide senior housing using tax credits successfully for a few decades. They could do the same thing for starter homes but they haven’t. I think “wall street” has decided that single family homes are too lucrative to let middle class homeownership thrive. They haven’t built starter homes for 40 years around here. Everything being built is upscale and multi-family.

 

[LiveBelowMeans]

With the likely slow down in the economy, I would sell as soon as possible and rent for a year or two in your preferred location. jmho

 

[COcheesehead]

We moved from a big metro to a much smaller city. We built a single level home, going from 3000+sq ft on three levels to 2200 on one level. It actually feels bigger than our larger previous home and lives easier.
We also have a huge storage space under the house with easy access so we can store a lot. That also helped.
We have a three car garage. The third bay was designed for a golf cart, but we use it as a workout area and a place for the bikes. That also adds more utility to the house. In retrospect we probably could have built down to about 1800 sq ft.
It’s very cathartic to get rid of stuff.

 

[DJRR]

It is totally personal. We decided to stay in our community since the medical care is here (DW has ~ 9 specialists) plus the kids and grandson are here. We decided to get a 1,600sf condo vs our 2,800sf single family. Results so far:

1. Capital was the same as they were both the same value. Interest was less due to good timing. Taxes are less since the condo has not appreciated as fast. Insurance is about half since some are paid by the condo fee.

2. I took 19 SUV loads to Goodwill, a 15' truck from got junk, lots of buy nothing drop offs, a few sales etc. and got everything left into the smaller space. Totally awesome when done, but my knees hurt for a year from the stairs.

3. My condo fee is less than my previous yard, trash, snow, etc. with no work required on my part. My utilities are significantly lower - almost half - more efficient less space. No repair costs for 3 years vs. at least $5k per year in my 50 year old house not counting the new roof, new retaining wall, new fence, new HVAC, new kitchen, etc. Cleaning takes an hour a week for a much better layout. Laundry room is next to the bedrooms vs being in the basement. I gained a garage where I park my car. So lots of small lifestyle improvements.

4. Location is much better. I can walk across the street to a grocery store and 7 restaurants. I can now get on the main road in 2 minutes vs. 10 minutes from my old house, etc. I cut my annual mileage by about 25%

Overall I am very satisfied. Better lifestyle fit, no yardwork, for a lower overall cost in the place we want to be. Downside is having a neighbor who is loud sometimes, but I handle that with air purifiers for the most part.

From a timing perspective it was very easy to get a delivery date on the new build house and then sell my existing house with a lease back until delivery date. Worked really well. I don't think it would work so smoothly with an existing house due to the low inventory and the need to bid with no contingencies.

 

[athena53]

I'm planning on moving to a retirement community next year- 3 hours away, where my son (only child) and his family live. I want to be free of home maintenance, lawn and garden work (yeah, I know I could hire it out but I'm cheap and it's exercise) and housecleaning. I love my house but I don't need all that space.

So- keeping in mind that I still need to have enough furnishings for visits by DS and family, I've been getting rid of a lot of things- mostly Free Stuff on Craigslist, e-Bay if it can be shipped for a reasonable cost, donations to places that take clothing I no longer use (my main one has a free clothing boutique for single mothers) and pitching things that have little or no value.

It really is freeing. I've never tolerated clutter well and wasn't cluttered to begin with but as I jettison extra stuff the rooms somehow look more peaceful and vacuuming is a lot faster. Glad I have time to do this at a reasonable pace.

The market in my neighborhood seems pretty healthy based on two sales in the last 6 months. Fortunately my retirement plans don't require that I make a killing on the house. I'm estimating $425,000 gross but even a $100K drop wouldn't derail my plans.

I will miss my $700/month mortgage payment, though.

 

[aja8888]

I downsized right after my wife died two years ago.

I sold the house and got rid of a lot of "stuff" that we accumulated (a huge amount). I bought a smaller place for me and the dog (1.459 sq. ft.) in a new development a few miles north. There are thousands of new homes going up around here, mostly all starter homes and a bit upscale. Prices range from $230,000 to $500,000. All new schools, high tax base stuff. This area is growing like wildfire with the influx of California escapees and northerners. Oh, people from the "south" are also joining the party!

It's all good.

Last week, my friend's church was having a large "garage sale" to try to raise $5,000 to send some kids to a camp. I donated a bunch of "stuff" I dragged along when I downsized. Guess I kept too much! They raised near $6 K.

So I have two completely empty rooms now and very few extra decorative pillows, commemorative plates, bedroom furniture, clock radios, old time pieces, folding chairs, etc.

I feel more liberated.

But, I also now feel like having 1,459 square feet of space is a waste for the dog and I and then throw in the two car garage and my lifelong collection of expensive power and manual tools, and I feel that it's getting time to de-accumulate again. looking back to this new place, I really have been living in just 700 square feet.

Since I have no future plans to share living space with another female companion, I see an apartment in my future, preferably a 55+ aged group one. So after Easter, I will put my house on the market and try to liberate myself again.

My dog will just have to adjust to the new lifestyle.

 

[bloom2708]

Consider renting for a year. We will downsize in ~1 year. I have a rental townhome lined up with underground parking. Even if it is only for 1-2 years, it gives us a no maintenance place to launch from.

Lots of options other than buying right away.

 

[RetiredHappy]

As someone said above, it's area dependent. Where we are, new homes, small, mid-size and larger homes are being built by the thousands, despite the drought. We often wonder if they are ever going to get the demand. We just don't see buyers for these homes.

Someone also said that starter homes have not been built in 40 years, again it is also area dependent. My son bought a new starter home in 2017 when we moved out of state. They are still building starter homes there - in N. California.

 

[Teacher Terry]

When I was married we downsized from a 2k two story house on a 4th of an acre to a 1400 sq foot house in town close to everything. I sold, donated and gave away many items.

4 years ago now being alone I sold the house and bought a 855 sq foot condo in a secure building close to many businesses. Again I purged many items.

I absolutely love where I live and have made 5 good friends in my building. Since I have 2 small dogs under 10lbs they are pad trained so I don’t have to take them outside to go potty.

I sold in a very hot market which is great for selling but not buying. However, I knew which 4 condo complex’s I wanted to live in and each one had between 100-200 condos so there were always some for sale. I found one that had everything on my wish list and got into a bidding war to get it. It’s much cheaper than staying in my house.

 

[Midpack]

I've never worried much about housing prices once you own a home. While a new home might seem expensive, presumably your current home has appreciated in a similar fashion, so somewhere near even money.

We moved from Chicagoland to NC 6+ years ago. Our plan was to downsize, but we ended up buying a 38% larger home (94% larger volume)! The market we bought into was so hot it took us over 4 months to find a home we liked, largely. because new listings of desirable homes were being sold in 24 hours or less, and we were working from 750 miles away. We paid about 25% more than we'd planned, but our new house has appreciated over 60% already. So if we move again (hope not, but probably inevitable in the no go years) we're not worried about new home prices - our equity will likely keep pace.

Not sure how the Federal or state government can do much to solve the 'housing crisis' or they would have long ago. Contractors are going to build homes that sell easily (up to date homes and more qualified buyers) and generate the most profits. They can't force contractors to act against their business interests, and I for one don't want to subsidize 'affordable housing' through taxes. There are always token affordable housing projects, but that's all they are - token.

 

[Surewhitey]

We bought in 2015 and then sold it in 2018 to reduce sq ft from 1750 to 1150 for the 2 of us. Now we have 2 Gk's and it's small when they are here, but 95% of the time, it's just right for us. We've made the spaces very efficiently with custom cabinetry and furniture (my thing).

There was a 45 day living in an AB&B that reset our standard of space. Having a detached 2 car garage is good for me to escape if I need to.

The new homes in our neighborhood are tear downs with 4-5000 sq ft rebuilds, $1.5mm & up. Our home has gone from $280k to $500k+ in 7 years so affordable homes are only far from the city and still start at $300k unfortunately & cheaply built no doubt. Condos are similar.

Property tax is the biggie here. We are scheduled to get another 10% increase in 2025 & 26 to the tune of $7200 in 2025, but no income tax still offsets this...

 

[brett]

Downsizing was job 1 when we retired. The last thing we wanted was to maintain a 3700 sq. foot home and property.

Our plan was simple. Downsize. Sell the house. Store what we wanted in a PODS 8X8X16 container. Travel internationally for 9-12 months. Return home, perhaps relocate, rent for a few months while we shop for a condo.

How did it turn out? We came home, rented a great condo overlooking a golf course. Housing market went downhill so we decided not to buy. The six month rental turned into 4 years. In the interim we decided that we really did not want to live in a multi story condo.

We subsequently bought 1400 sq feet in an HOA. All snow removal and gardening is taken care of. Essentially lock and leave thanks to great neighbours. It has been six years. So happy we took our time to buy. Very pleased with where we ended up.

The second change of plan...We were considering buying a snowbird home in either Mexico, Costa Rica, or Panama. Decided against it. Did not want to be tied down with a second property. Nor did we want to go to the same area each winter.

As an aside...we still have a few unopened boxes in the basement from that downsize nine years ago!

 

[pb4uski]

I am 60 years old and we are looking to downsize. We are basically empty nesters right now. We live in Chicago area and it still is overwhelmingly a sellers market (from what I have been told). Our preference is to move to townhome. We have decided to put our house on the market in early May. If we get our price we will quickly move to buy our next home. It's obviously a little tricky because supply is extremely low and I am not certain we can find the home of our choice if we sell. ...

If you can afford to, I would suggest that you buy your townhome, move and then sell your current home. That's what we did as well as DD recently.

We were able to buy the new-to-us house using a pledged line of credit collateralized by my brokerage account and then paid off the LOC with the proceeds from the sale of our Florida condo a couple months later. It all worked out very well about 3 months soup-to-nuts.

In my experience, "less is more" but I just wish that I could convince DW of that.

 

[Hyper]

We're slowly (very slowly), finishing our <1000 sq ft log cabin remote n offgrid in the forest. Everything being new, upgrades should be minimal in the future. Most of our furniture is large but doesn't need to be as we're not large. Finding smaller sized furniture is a whole new problem!
Blessed beyond belief by the great Lord!
I should add half our state is experiencing extreme cost rises in electricity with even higher cost to be coming. We're extremely happy to be rid of that.

PS: someone needs to do a tire downsizing thread! I was down to about 20 tires several years ago.
We are now back up over 46!!!
All practically new besides the four wheeler which is in need!!

 

[Rianne]

We met and got to know a couple who spent their working years in a large house in Maryland. Commuted to NYC for work. Then in retirement, moved to Manhattan in a smaller apartment they purchased in a building with a doorman. They walk to the grocery store, enjoy the theater, like the energy of the city. No need for a car. They are in their early 80s. I found that interesting.

 

[brett]

We had no trouble not accumulating clutter when we rented a condo because we were always thinking about a move.

We have been in our current home for six years. We do have to work at not accumulating clutter. Especially since we have a basement. It is all too easy to keep unwanted items by putting them in the basement for 'just in case'

We find ourselves slipping back sometimes. Every so often we call time and get rid of those few items that we do not need, never will need, and have no use for. More often than not they are in the basement!