Downsizing

To Downsize or Stay: Navigating the Complex Decision of Moving to a Smaller Home

In today’s rapidly changing housing market, homeowners are facing a difficult decision: should they downsize to a smaller home, a condo, or a townhome, or remain in their current property?

The decision to move—or stay—is increasingly complex, influenced by a range of financial, emotional, and health-related factors. For many, the idea of downsizing brings a sense of freedom and simplicity, but it also comes with its own set of challenges.

This article explores the various considerations that homeowners must weigh when deciding whether to downsize, with a particular focus on the costs of home maintenance, health concerns, and the broader housing context.

1. Cost of Home Maintenance: A Key Factor in Downsizing

One of the most compelling reasons homeowners consider downsizing is the reduction in the costs associated with maintaining a larger home. Larger homes often require higher utility bills, more frequent repairs, and greater expenses for things like landscaping, cleaning, and general upkeep.

Smaller homes, condos, and townhomes typically come with lower maintenance needs. For example, in a condo or townhome, landscaping and exterior maintenance are often handled by a homeowners association (HOA). This can free up time, reduce stress, and save homeowners a significant amount of money. Additionally, smaller homes tend to be more energy-efficient, meaning lower heating, cooling, and electricity costs. For seniors or those living on a fixed income, these savings can make a huge difference in long-term financial security.

2. Simplicity and Lifestyle

For many homeowners, downsizing offers the opportunity for a simpler lifestyle. A smaller living space can mean less clutter, fewer possessions to manage, and a more streamlined routine. Homeowners who choose to downsize often report feeling liberated from the responsibilities of a larger home and property, which may involve hours of yard work, cleaning, or ongoing renovations.

“Downsizing could free up resources and time to focus on what matters most in this stage of life.”¹

The appeal of simplicity can be particularly strong for empty nesters, retirees, or those nearing retirement. As children leave home, or as health concerns become more prominent, the need for space often diminishes. Downsizing to a smaller, easier-to-manage property can help create a less stressful environment, allowing individuals to focus more on their hobbies, health, or social lives rather than on maintaining a large home.

For those seeking an easier, more manageable lifestyle, condos and townhomes often provide added convenience, such as on-site amenities (pools, gyms, etc.), proximity to urban areas, or access to communal services like trash collection and snow removal. These options can help homeowners feel more connected to their community, especially if they are downsizing due to a desire to live in a more social environment.

3. Health Concerns: Aging in Place and Accessibility

For older homeowners, the decision to downsize often intersects with health concerns. A larger, multi-level home can become increasingly difficult to navigate as mobility declines, whether due to aging, disability, or illness. Homes with stairs, large bathrooms, or expansive yards can become challenging, while smaller, more accessible properties can significantly improve quality of life.

Aging in place—the concept of remaining in one’s home as long as possible—remains a top priority for many seniors. However, if staying in the current home isn’t feasible due to mobility issues or an inability to afford necessary modifications (e.g., installing a stairlift or renovating a bathroom for accessibility), downsizing to a more appropriate living space becomes a viable option.

Many modern condos and townhomes are designed with accessibility in mind, offering features like single-floor layouts, wider doorways, and minimal steps. For seniors or people with health concerns, these types of properties may provide the ideal balance of comfort, convenience, and cost-effectiveness.

However, this decision is also influenced by the availability of such housing options. In areas where there is a shortage of affordable, age-appropriate housing, it can be difficult to find the right fit. As a result, some homeowners might feel compelled to stay in a less-than-ideal situation because they have limited options in the housing market.

4. Financial Considerations and Savings

Downsizing can also be a wise financial move, especially in a market where home values are rising, and homeowners are sitting on significant equity. By selling a large home and purchasing a smaller property, homeowners can unlock cash that can be used for retirement savings, travel, or other financial goals. The proceeds from the sale may also provide a cushion for unexpected medical expenses or assist with the costs of home care services if needed later in life.

“In the second quarter of 2024, homeowner equity reached 72.7% of total real estate value, the highest since 1958.”²

However, it’s important to consider the broader financial picture when deciding whether to downsize. Transaction costs—such as realtor fees, closing costs, and the potential need for renovations—can add up. Homeowners also need to evaluate whether the new property will offer long-term financial stability, or if the costs of moving will outweigh the benefits. Additionally, in some markets, the cost of a smaller home may not offer as much of a savings compared to what it would have in the past, particularly in regions experiencing housing shortages or rapidly rising prices.

The Harvard University Joint Center for Housing Studies looked at these issues and created an interactive map of note: Older Adults with Cost Burdens At All Time High.

In certain situations, staying put may make more sense from a financial perspective. If the current home is paid off or has low mortgage payments, it might be more affordable to stay in place, especially if there are few suitable downsizing options available nearby.

5. The Housing Market Crisis: Limited Affordable Options

The current housing market, with its widespread affordability crisis, complicates the decision to downsize. In many regions, there is a severe shortage of affordable housing options, particularly for middle- and lower-income households. As housing prices rise and available inventory shrinks, homeowners may find that their options for downsizing are limited or unaffordable.

In such markets, downsizing may not be a feasible alternative, and homeowners who would otherwise consider moving to a more affordable, manageable property may be forced to stay in their current homes longer than they would like. This has created a particularly challenging situation for seniors and those on fixed incomes who find themselves “stuck” in a home that no longer fits their needs, but whose financial situation doesn’t allow them to access more suitable housing. AARP has an excellent series on how housing industry and options need to adapt to the changing America.

The shortage of affordable housing also means that those looking to downsize may face stiff competition for the limited properties that are available. This can create a sense of urgency, but also frustration, for potential buyers. For those who have no alternative but to downsize, navigating the housing market can be a stressful and overwhelming experience.

6. The Bottom Line: Should You Downsize?

Ultimately, the decision to downsize is highly personal and dependent on a variety of factors, including financial considerations, health needs, and the availability of affordable housing. For many, downsizing offers clear benefits, such as reduced maintenance costs, a simpler lifestyle, and better accommodation for health needs. For others, staying put may be the better option—either due to the lack of affordable alternatives or because the costs and complexity of moving outweigh the potential benefits.

Homeowners should carefully evaluate their own financial and personal circumstances, considering both the immediate and long-term effects of downsizing. For seniors, aging in place may be a viable option if modifications to the home are feasible or if there is no suitable alternative nearby. However, for those who have access to affordable, accessible housing, downsizing can offer a chance to reduce costs, simplify life, and secure a more sustainable future.

In the end, whether to downsize or stay put is a deeply individual decision, but it is one that should be made with careful thought, weighing all the factors involved in this complex and often challenging issue.

22 Things to do before Downsizing your Home

Reach out to get a professional home valuation and seller’s net sheet (estimate). Crunching the numbers will help you make an informed decision. You can decide whether to sell your current home and downsize. Alternatively, you can choose to stay put.

Professional Support for Downsizing:

As an SRES REALTOR®, I have a network of professional service providers that I can offer referrals in order to support and assist my clients with their downsizing needs. For example, companies such as Caring Transitions helps Tucson residents with relocation, downsizing, and estate sales.