How to Determine if the Time is Right to Downsize

Courtesy of The Mosaic Real Estate Team
The phrase “bigger is better” has endured for quite some time. It may be impossible to pinpoint precisely who coined the phrase, but its lesson, that larger things tend to be more valuable than smaller alternatives, applies to numerous situations. In fact, in some instances, people may find that bigger is not better.
Downsizing is an approach many consider after turning 50. Empty nesters and others nearing retirement may wonder if the time is right to downsize from their current home. Though that’s a strategy that millions have adopted over time, the decision is not always simple. Individuals over 50 trying to determine if downsizing is right for them should consider a host of factors before deciding.
Monthly housing expenses
Before downsizing, individuals should determine just how much they’re currently spending on housing. Those who have fixed rate mortgages likely know the amount of their monthly mortgage payment, but what about maintenance? Home maintenance expenses fluctuate, but a careful examination of the previous 12 months’ expenditures can give homeowners an idea of just how much they’re spending to maintain their properties. The number may be eye-opening, according to Thumbtack’s 2024 Home Care Price Index, which reveals that the average annual cost to maintain a single-family home reached an all-time high of $10,433. If such expenses are preventing homeowners from building their retirement nest eggs, then it might be time to seek alternative housing.
Real estate prices
Real estate prices have skyrocketed in recent years, which can be both good and bad for current homeowners considering downsizing. Many who downsize look to move from a single-family home into a condominium, where maintenance tasks are typically handled by a homeowners’ association (HOA). Such communities typically charge HOA fees, which can be minimal or considerable. Also, the price of condominiums has risen in recent years, with the lender New American Funding reporting in early 2024 that the median sale price of a condo reached $341,000. So, homeowners who want to downsize may end up taking most of the profit from selling their current properties and reinvesting it in a costly condo. Some may deem that worthwhile, while others may find the cost savings of downsizing in the current market to be negligible.
Emotional attachment
Downsizing may be considered with cost savings in mind, but it’s important to consider your emotional attachment to your current home. Many individuals over 50 raised their families in their current home, and letting go of a property where so many memories were made can be difficult. Homeowners who aren’t prepared to move on from properties that are meaningful to them and their families can consider additional ways to downsize their financial obligations.
Downsizing is something many homeowners over 50 consider. Any decision regarding downsizing is best made after considering a range of variables. For expert advice, contact The Mosaic Real Estate Team with Keller Williams Realty at 716-570-5401, or email josh@mosaicteamwny.com.