Following a birthday sleepover for my oldest daughter last week, my wife and I were out for an early morning walk in search of some peace, quiet and a good cup of coffee. Reflecting on the fact that we now have a teenager in the house, talk turned to our home. While it took one rental and four home purchases, the place we’ve now called home for more than five years is the place that fits us and our family best. Outside of unforeseen circumstances, we plan on being there at least as long as the kids are home.
But, then what?
The conversation that followed was like many conversations we have with clients at many different stages of life. On one hand, there’s a desire to have enough room for visiting family and friends, the ability to still have the kids home, eventual visiting grandchildren, etc. On the other hand, most of the year, we wouldn’t really need the space we currently have. Maybe a smaller home or even a condo would be nice. We could always rent additional space or travel to our favorite vacation spots for time with family.
Plus, downsizing makes sense, right? Sell your current, possibly paid off home in exchange for the right amount of space you need at a lower price tag?
Supply & Demand
Of course, downsizing on paper or while daydreaming on a neighborhood stroll is one thing. The actual experience can be quite another. One of the biggest downsizing challenges in our current environment is a simple exercise in supply and demand. Reduced demand for traditional family homes and not nearly enough supply of condos, patio homes and other suitable options for those looking to downsize.
If you do find an ideal place, the price tag may leave you in shock. We’ve watched listings and heard anecdotally from more than one client that giving up thousands of square feet doesn’t necessarily mean a proportionate reduction in cost. In fact, many condos or homes identified as solid downsizing options can come at a higher cost than the homes being replaced.
On top of losing some square footage, one of the other benefits to downsizing is a reduction in home-related expenses. Reduced property taxes, utility bills, landscaping, general maintenance, etc. Even having a slightly smaller kitchen or one fewer bathroom can make a big difference in long-term maintenance and remodeling expense.
That said, there are other costs to consider when weighing a downsizing move. First, the cost of selling your current home. If your home isn’t up to date, the landscaping in “camera-ready” condition, etc., it may take several thousand dollars or more to get your home sale ready. On top of that, real estate commissions, closing costs and the costs of moving can start to add up. From there, new furniture may be needed in the new home if current furniture doesn’t fit due to size or style and the likelihood of getting any value out of those possessions you part with is slim at best. If you’re in a condo or patio home development, some of those reductions in maintenance and property care will be replaced by a homeowner’s association or condo fee.
This is all without mentioning the obvious emotional costs. The notion of leaving the place where you raised your family, celebrated birthdays, gathered with family to mourn a loss, toasted friends at dinner parties can be a difficult one to come to terms with.
Weigh Your Options
As you start to compare some of the factors above, staying in your current home may seem like an increasingly attractive option. What can you do to help make this a win-win?
Consider using home equity to add amenities that increase your chances at being able to age in place. An addition of a first-floor master, widening doorways, adding mobility friendly rails and flooring can all make a big difference in lengthening the time you can spend in your home. There are many companies and contractors specializing in these types of modifications and ways to accomplish these goals without making your home feel like an institution.
Another option is to go ahead and do the downsizing purge of your belongings. Take digital photos of your things and catalog them as you see fit so that you can always visit your “stuff” with just a click. Doing this will help you declutter your home and could create new ideas or opportunities to reimagine how you use your home.
Perhaps a somewhat extreme option, platforms like Nesterly have sprung up. Currently operating in Columbus in our area, Nesterly pairs up college students in need of housing with empty nesters looking for some extra income.
If you’re still on the fence, you could practice downsizing. Rent out your home for a year or two while trying out various options. Renting in different neighborhoods or parts of the country can help you decide whether making a move is what makes the most sense for you.
If you do decide to make a move, consult with experts, especially if the process is overwhelming emotionally, physically or both. Senior move managers are a growing field of professionals who help simplify your transition.
Don’t Leap without a Plan
Putting a plan in place and acting intentionally makes all the difference. These are significant life decisions and deserve time and attention. TAAG can help. Whether it’s crunching the upfront costs and comparing your annual savings or talking through your goals and what impact a move might have, we can help clarify the tradeoffs and potential financial and emotional gains or losses that might occur when downsizing.