By now you’ve probably heard – the housing market is BOOMING. Now two years into the COVID-19 pandemic, demand for housing is surging. And subsequently, so are home values. With no clear reprieve in sight, 2022 is shaping up to be a sellers’ market.
While home values skyrocketed a record 16.9% last year1, your home is likely worth more than you may think. And as such, you may feel tempted to put your house on the market – and make a pretty penny for it in the selling process. But what would come next? For many, downsizing has become a popular option.
An always-popular trend, especially amongst retirees, the downsizing movement has picked up even more steam within the past few years. Simply stated – it turns out that the old mentality of “bigger is better,” isn’t holding as true as once believed. According to a study from Trulia, more homeowners express desire to move to a smaller house than a larger one2. What’s more, census data shows that the average square footage of newly constructed homes (built within the past decade) is decreasing regularly3.
With smaller homes typically coming at a more affordable cost and less maintenance and upkeep, downsizing offers several benefits. But it’s no secret that downsizing is a process and can quickly become overwhelming. Fortunately, it doesn’t have to. With some proactive planning, you’ll be able to strategically inventory your belongings and space, while making room for new experiences in a new home. Consider these do’s and don’ts of downsizing to get started.
Involve Family & Friends
Preparing for a move is a big undertaking – but you don’t have to go it alone. If possible, make it a family affair by enlisting the help of your close friends and family members. Odds are they’ll be more than happy to lend a hand! From organizing items, to helping you make decisions on what to keep, to running a yard sale to sell your items, or even transporting donated goods to local charities – there are plenty of ways to involve your family members and friends. With a team of helpers, your packing and upcoming move will not only become more manageable – but likely, more fun too! You’ll also look back on the process as some final memories shared in the house you’ve loved, before packing up and embarking on new memories and traditions in your new home. After all – it’s all about the people and memories you cherish, not the stuff that surrounds you.
Determine Your Lifestyle Needs
As we age, so do our needs – including our needs in a home. And downsizing provides an opportunity to leverage a new space and turn it into your retirement haven. But doing may require you to make some adjustments around the house. While you may have always had three sets of dishes, you may find that you can easily manage with just one or two. This may also mean a smaller kitchen will suffice in your new home. You can also take inventory how often you use all the rooms in your current home to identify how much space you actually need. A home smaller in square-footage may actually boast a more open layout and bigger master bedroom, giving you more space where you need it most!
And since downsizing isn’t always a one-size-fits-all scenario, your best place to start is by assessing your intentions and goals ahead of time. Start by asking yourself questions, such as “What are my top reasons for wanting to downsize?” “What are some opportunities that will come as a result of me downsizing?” “Are there any new hobbies or activities I want to explore in this next chapter?” and “What am I most excited about in regards to the downsizing process?” By answering these questions and thinking through the process, you’ll end up with a much clearer view of what you’d like most from your new lifestyle and home.
Keep a Positive Attitude
While moving comes with inevitable stresses, choosing to maintain a positive attitude will have a huge impact on your overall downsizing experience. After all, downsizing is a fresh start! With a smaller space and less maintenance, you’ll ultimately have more time and more money to spend on what matters most to you. And while its completely normal to feel emotional during the downsizing process, the key is to re-center your focus on what you are going to gain from the move. From a more accessible or open floor plan, to lower utility bills, to a better location, or more relaxed lifestyle – the possibilities are endless!
Take Location into Account
Once you decide when to downsize, the next factor to consider is where. Without needing to live in close proximity to a job, you may decide to leave your current community in favor of a change of scenery. When considering where to downsize, there are a few factors to keep in mind. For Northerners or retirees who have long lived in a cooler climate, you may find Florida or the Southern US’s warm climate especially welcoming. But beyond the sunshine, you’ll also want to account for proximity to healthcare, activities, and attractions in your new neighborhood. If you love to golf, living near a course could be ideal. If you’re a foodie, you may find yourself wanting to live closer to a downtown area where you can sample the local eateries. Wherever you choose to set down roots for your next chapter, be sure to weigh the cost of living – as costs tend to vary from state to state. You can also learn more about what makes a great place to retire on our blog.
Set an Unrealistic Timeline
They say that timing is everything – and this is especially true when it comes to downsizing. Just as you wouldn’t want to rush into purchasing your first home, you’ll want to take your time in finding the right home to downsize to. Once you’ve decided that downsizing is in your future, establish a timeline so you can start planning early. The more time you can give yourself, the easier the process will be – not to mention more time to make decisions. If time isn’t a factor, expect to take a few months to thoroughly go through your belongings and organize what you plan to sell, donate, and bring with you.
Try to Take Everything with You
After spending so many years in your current home, it’s only natural that you’ve accumulated stuff – and lots of it. But just because you have it, doesn’t mean it should make the move to your new home. One of the beauties of downsizing is embracing a simpler way of living – and this means simplifying some of the physical things in your home as well. As soon as you have a plan to move, begin going room by room and taking inventory of your belongings. Consider starting with objects that you’ve stored and haven’t thought about in a long time – if you haven’t missed them, it may be time to part ways. In decluttering and combing through your items, you may find yourself wanting to make exceptions along the way. Try to fight the urge by sticking to a strong set of ground rules for sorting your items. Need some inspiration? Take it from Marie Kondo herself – keep only those items that speak to the heart, and discard items that do not spark joy.
Overexert or Overwhelm Yourself
Downsizing your home does not happen overnight. And decluttering and organizing your home of so many years has the potential to be a big undertaking. The best way to approach the process is simply one step at a time. Consider breaking down the process into multiple, more manageable projects. You can go room by room, or even create a list of tasks to “check off” once completed. Whether it’s something as little as identifying clothing items and shoes to donate or finally tackling that dreaded “junk drawer,” every little project is progress.
Resort to Storage Units
When it comes to downsizing, less is more. And the less stuff you have to move with you, the easier the process will be. Although renting a storage unit may seem an appealing option to offload some of your belongings – these units cost money. The sooner you can part with belongings you no longer use or need, the better off you’ll be. Instead of paying to store your items in a unit, consider an estate sale. Not only will you streamline the downsizing process, but you’ll also make some money in the process!
While downsizing may seem like a daunting task at first, following these do’s & don’ts will help make the process much more manageable. And once you’re finally in your retirement dream home, you may find yourself asking, “Why didn’t I do this sooner?!”
If you’re looking to relocate to a home that’s closer to your family, more physically accessible, or better fit to your current or future needs, a HECM for Purchase could be a viable solution. Designed to help homeowners 62 and older buy the home they need, a HECM for Purchase can help you accomplish two goals with a single transaction – buying a new home while securing a reverse mortgage. Better yet, a HECM for Purchase does not require monthly mortgage payments4, so you can live out your golden years in your new home free of this large expense.
Want to learn more about HECM for Purchase? To see how you can purchase a new home with a reverse mortgage, contact the Longbridge team of professionals today.