One of the biggest issues facing people who are considering downsizing is the demographic storm that’s about to occur. Consider these facts:
- Millennials and downsizing baby boomers are interested in the same types of urban housing (near walkable city centers, bike trails, cultural events, parks, universities, etc.), but there’s a limited supply, which is driving up prices for these properties. (National Association of Home Builders, “55+ Housing Market Shows Continued Growth”)
- A flood of art and antiques that are no longer needed or loved are hitting the market, and with this greater supply comes lower prices. (Be forewarned: the longer people wait to sell their house and their beloved stuff, the less it will be worth). (NYT, 3/4/17)
- While some baby boomers want to stay put and age in place — and are quite happy leaving their homes “feet first” and letting their children deal with the mess after they’re gone — others want an active retirement in a quaint walkable village or by the beach in a lock-and-leave environment. These properties are being snatched at phenomenal rates, leaving fewer opportunities for those who hesitate for months or even years. (Construction Dive, 1/14/17)
- Even though they may want to unload their large, expensive homes, they still want a spacious feel to their new smaller homes. Because of the relatively short supply of these “smart-sized” homes in desirable neighborhoods, their prices are rising; hence, “downsizing” doesn’t necessarily mean reducing the cost of living. “Boomers will pay a premium if you can give them what they want.” (Washington Post, 10/17/2015)
- While the real estate market is hot in many areas (as of the middle of 2017) — with low inventory and high prices (referred to as a seller’s market) — as time goes on, there will be fewer people buying large homes; millennials don’t want the headaches associated with them, and most cannot afford them, anyway. Greater supply will lead to lower prices. (The Washington Post, 8/22/16)
So, in answer to the question, “When is the right time to downsize?” the answer for many people is NOW. Home prices are still historically high, interest rates are still historically low, and if they have the energy and motivation to make a change and “reinvent” themselves, they will not find a more favorable environment to dive into downsizing.
Why the hesitation?
Maybe millennial children are still living at home, keeping people in place. Maybe having children and grandchildren nearby is the deterrent. Or maybe the uncertainty of where to go is an issue. There are dozens of excuses. What many people fail to consider is the idea of renting for six months in a variety of places, allowing them some time to experience different communities and lifestyles as they look for their new homes.
The first step is the most difficult.
If they’re in good health and they have the energy and motivation, there’s no reason why singles or couples — or even families –should not sell while the market for large homes is hot, and spend at least a few months in a few places to decide just where they want to begin the next stage of their lives. If they simply commit to making the move, half the battle is over! Once that decision has been made, they can start decluttering by having an estate sale or by organizing, selling and donating items that are no longer needed or wanted. Soon it will be time to “stage” the house and list it with a Realtor®. A storage facility can come in handy for furniture and off-season clothes that won’t fit in the rental cottage at the beach. And once at the beach or in a trendy urban condo or in a mountain town for a few months, they’ll breathe a sigh of relief as the house sells and as they start the process of deciding where and how the new, simpler life will begin.