As the market continues to favor sellers and baby boomers march toward retirement, it’s no surprise that the nation’s seniors are beginning to sell their homes in larger numbers. Last year, the National Association of REALTORS® (NAR) reported that sellers over the age of 52 accounted for 54 percent of the homes sold across the country.
Below, we explore five reasons downsizing to a smaller home can be the best plan of action for homeowners holding on to expensive (and expansive) homes they’ve owned for decades.
Paying in cash
Some homeowners will find that by downsizing, they can earn enough to buy a less expensive home in cash and end up mortgage-free in a new abode. NAR says this is a very common route for those nearing retirement. In 2016, sellers aged 62 to 70 sold their home for a median price of $258,800 and bought for a median price of $247,000.
Larger family homes can take up several hours each week to keep up, and those who raised families may find that the three-story home they needed in the past is impractical now. NAR’s data supports this, showing that the median size home purchased by those over the age of 62 was between 1,800 and 1,900 square feet. By comparison, homeowners aged 37 to 51 tended to buy homes that were an average of 2,300 square feet.
Moving closer to family and friends
While sellers of this age did tend to downsize, it wasn’t their primary reason for selling. Instead, 26 percent of sellers aged 62 to 70 report that proximity to family and friends was their number one motivator for selling and moving.
- 21 percent state they are moving due to retirement
- 15 percent state their home has become too large
- 10 percent state they are moving because their neighborhood has become less desirable
Last year, NAR reported that 14 percent of buyers over the age of 50 purchased senior-friendly homes or units in active senior communities. In many cases, then, this age group is not only planning for the “now,” they are also planning for the future.
One-level homes with open floor plans, larger rooms and wider hallways prove to be great not only for entertaining guests, but they also will be wheelchair and senior accessible in the future. Read more on how those over 50 are planning their retirement housing.
Last, and perhaps most importantly, homeowners who downsize are acknowledging that it’s finally their time to choose. Among last year’s sellers over the age of 62, more than 32 percent of them had lived in their home for more than 21 years. By selling their home, they can regain the flexibility they gave up as they pursued career and family aspirations.
Many approaching retirement in Minnesota and western Wisconsin are looking at chic downtown Minneapolis condos and a summer rental in a warmer climate. Others are looking at townhomes with modern conveniences and a homeowner’s association that handles basic yard and sidewalk maintenance. Still others know it’s time to retire to a full-time lakeside retreat.
Ready to downsize?
If you’re preparing to downsize, one of our 2,500 local experts can assist you in the sale of your longtime family home. Reach out today to learn how today’s market conditions favor sellers and to discuss what comes next for you after you sell your home.
You can also download "The Ultimate Guide to Selling Your Home" to find out everything you've ever wanted to know about the selling process, but didn't know to ask.