Is Downsizing Right For You?

“As we see the transition of the large Baby Boomer generation age into retirement, it will be interesting to see if they move in with their Millennial and Gen Z children or if they stay put in their own homes.”

Lautz provides two alternatives: move into a multi-generational residence with loved ones or stay in your current house. Multi-generational living is gaining popularity, but it may not be a viable option for everyone. And staying in place may no longer suit your needs as well. However, there is a third option, and for some, it may be the most suitable one: downsizing.

When you sell your house and purchase a smaller one, we often refer to this as downsizing. At times, smaller houses are more suited to your changing needs, and relocating means you can also land in your preferred location.

Apart from personal advantages, downsizing may be more cost-effective too. The New York Times (NYT) notes:

“Many downsizers expect to improve their retirement income stream if their new home costs less than what their old house sells for. Lower utility costs, insurance and property taxes — as well as investment returns on the proceeds — can also improve the bottom line.”

One of the most crucial components of retirement is being in a robust financial position, and downsizing may make a significant difference.

A crucial reason why downsizing is still cost-effective today, even with higher mortgage rates than a year ago, is due to the record-high level of equity that homeowners have. Utilizing your equity while downsizing can lower, or maybe even eliminate the mortgage payment on your new residence.

Not only is the maintenance of a smaller house likely to be more affordable, but leveraging your home equity could also make a significant difference. Your local real estate advisor is the ideal resource to assist you in determining how much equity you have in your current home and the options it can provide for your next move.

You Have Options

If you're a homeowner preparing for retirement, deciding upon your next place of residence is most likely a part of that transition. Let’s connect so that you can understand your options and explore your opportunities for downsizing in Maine's ever shifting real estate market.