In all the talk of rising real estate prices and ever-expanding new construction home footprints, a whole group of people are getting lost: the downsizers.
Although traditionally, we think of downsizing as being a step people take after their kids leave home for good, a lot of Americans are considering downsizing a viable option these days.
According to Opendoor research, 62% of people surveyed have changed their idea of a dream home since the pandemic. For these people, their new dream home is smaller, simpler and quieter, even if that means moving to a place that won’t hold all their current stuff. In fact, Opendoor coined a term for this: simple-sizing: making intentional choices at home to simplify and embrace an easier-to-manage, more contented lifestyle.
Why Are People Downsizing?
Surprisingly, real estate agents say the motivation to downsize is not about money so much as it is about reclaiming time and energy.
“From my experience, downsizing typically has little or nothing to do with finances and a lot to do with wanting a change in lifestyle,” says Bryson Taggart, senior agent partnership manager at Opendoor in Phoenix. “People loathe the constant upkeep of a home and don’t want to do the maintenance needed. It’s really more home maintenance than the actual size or square footage of a home that eventually gets people over the line to downsize.”
However, when considering your finances, Taggart warns to look out for downsized homes with a lower monthly payment that may actually cost more because of extra amenities. “I always recommend downsizers look at the full financial picture of the new home, not just at the monthly payment,” he says.
Downsizing also means homeowners can do more of the things they want to be doing with their time, as long as the downsize is planned with that in mind. Choosing a condo, for example, means you don’t have to worry about yard maintenance while you’re off having adventures.
“If you want to travel and have a house, you need to figure out how to pay for it and maintain it while you are away,” says Désirée Ávila, real estate agent at Charles Rutenberg Realty Fort Lauderdale in Fort Lauderdale, Florida. “If you live in a condo, the condo association maintains it for you. Lock the door, leave for as long as you want. Come back, open the door and done!”
Getting Started with a Home Downsizing
Downsizing your home starts long before you put your house up for sale. Real estate agents suggest that you take a test drive of a smaller living space before you decide if that’s really what you want, especially if you cohabitate with someone. Sometimes the idea of downsizing is a lot more appealing than living the lifestyle.
“It may make sense to take a vacation and try out something similar to what you anticipate you will downsize to either via Airbnb or Vrbo,” says Thomas McCormack, senior partner and broker-owner at Resources Real Estate in Rumson, New Jersey. “Find something that approximates the space you envision and see if it feels comfortable.”
It’s also crucial to examine how you utilize space.
“Look around your current home and identify which spaces are rarely used and see if you can easily determine the number of rooms and functions that you require,” says McCormack. “Identify your must-haves and discuss with your partner if you will be cohabiting.”
In addition, it’s important to talk to people who have already made the leap you want to make, to help avoid common pitfalls. From there, you can figure out what you really want and need in a downsize, according to McCormack.
Questions to Ask Yourself Before Downsizing
Considering downsizing means you’ve already been thinking about a change, but sometimes the most obvious things are easy to overlook. Realtors suggest you really identify what you need and want out of a home, and that you take a hard look at your life as it is and how it might change.
Along with household expenses that may change when going from a single-family detached home to a condo, there are personal sacrifices you may not have considered.
For example, Taggart says you should consider how your family handles the holidays and what you’ll have to do to accommodate that. “Do grandma and grandpa always host Thanksgiving, Christmas, birthdays, celebrations, etc.? If so, how does downsizing affect family get-togethers? Most people do not think about how downsizing impacts the holiday season and the regular family barbecue gathering.”
Another stumbling block comes when people are trying to pare down their belongings. Ávila has helped many people downsize, and she frequently finds people don’t realize just how much stuff they have until it’s time to downsize.
“I have seen a lot of people struggle with where they are going to put all their stuff. But when they take stock, they have lots of stuff they never use or even remember,” she says.
According to Ávila, it comes down to three important questions: “What do I need, what do I want and what can I get rid of?”
McCormack takes a more holistic approach with clients looking to change their life.
“To help clients best prepare, I would discuss with them their why,” says McCormack. “Why do you want to make this change, what are you hoping to accomplish, what are you looking to remove from your life that is a negative, what are you most looking forward to after the change and what are you most concerned about regarding its impact on your new life?”
A Surprise Benefit of Downsizing
Although it’s pretty common to anticipate that downsizing means financial savings and possibly more free time, there’s another benefit to downsizing that many homeowners may not consider until they’re deep in the process: It’s a chance to reinvent their lives. That’s why it’s so important to really think through your move and choose your new home carefully.
“This is a chance for renewal and lighter, less encumbered living,” says Ávila. “See it as an opportunity to create a new life, embrace it.”
Of course, a new home can’t fix everything, especially if you’re simply not happy where you are. If your ultimate goal with downsizing is to have that less encumbered life, you have to recognize any compounding issues so your move can solve them.
“Are you feeling like you just have too much home, or are there other factors, like a neighborhood you don’t love, that are bothering you?” says Taggart. “A smaller house won’t always be the sole fix, so I like to guide my clients through the process of identifying other areas they can change in order to create their dream simplistic life.”