Sooner or later you are going to find yourself in the position of asking yourself if it's time to upsize or downsize. Many factors go into making that decision which could include: your age, the age of your home, changes in family, or family finances.
Moving On Up: In the past, upsizing showed signs of success and wealth. People would often believe that bigger was better and therefore happiness levels would increase. Today, for many, moving into a larger home is more than having more.
About 20% of Americans work from home, at least part of the time, and need a separate work space. Buying a home that affords more space to create a designated home office has become a necessity for some.
Baby boomers, who were known to downsize after retirement, are now doing a 180. More retired people are choosing to upsize their residences and enjoy the fruits of their savings labor. According to a recent Del Webb survey conducted among 50- to 60-year-olds, 22% are looking to move to bigger homes.
In 2021, approximately 18% of Americans were living in multigenerational homes (that's almost 60 million people), stating that living together makes it easier to meet the care needs of at least one family member. Moving into a larger home with extended family can also be very cost effective. Instead of paying for multiple mortgages and maintenance on two or more homes, funds can be combined to pay living expenses and gives everyone an opportunity to save a little.
In addition, some homeowners want to add more square footage and discover that buying a bigger home is less expensive than adding on (some communities will limit or even prohibit additions to existing homes). Workout rooms, a laundry room, or wanting a larger kitchen can help influence this decision.
The Upside to Downsizing: Downsizing used to be reserved for older homeowners, but many young couples are competing for homes with 1,400 or fewer square feet. Reasons for downsizing can include having grown kids, lower utility bills, lower monthly payments, increased cash flow, fewer maintenance costs, reducing clutter, and less cleaning. According to Realtor Magazine, people looking to downsize accounted for 28% of real estate transactions in 2020.
There are many communities that now offer a variety of amenities which can make living in a smaller home more appealing. Community pools, clubhouses, work out facilities, playgrounds, parks, libraries, conference rooms and work stations make it less important to have those things within the four walls of a home. These amenities come with a fee (Home Owner's Association), but then the responsibility for maintenance and up-keeping is no longer on the homeowner.
Living clean and green is also a big advantage of downsizing. Smaller homes create a smaller environmental footprint and doesn't allow for collecting too much stuff. Downsizing encourages people to buy what they need and purge what they are no longer using. Utility bills will be lower and mortgages could be smaller which should give homeowners an opportunity to increase their savings.