What Downsizing Is—Plus How to Know When Downsizing Is Right for You

Downsizing is a term in real estate typically reserved for that time in life when older people or couples whose children have flown the nest find themselves with more house than they need. Downsizing offers a way to save money and maintain a more modestly sized home—only the size you actually need at a new stage in life. 

“When people downsize, they often want not only less space but also an easier life that maybe doesn't include handling lawn care, exterior maintenance, etc.,” says Redfin principal agent Daniel Close.

There are other points where downsizing might make sense, too. Here, experts offer advice on how to decide when to downsize and what to look for in a home when it’s time. 

“Downsizing can be a wonderful opportunity to create a home that fits your needs and supports your best life in your senior years,” says Jana Adams of Better Homes and Gardens Real Estate Wine Country Group. “With careful planning and consideration, it can be a positive and empowering experience and prepare you for taking on the new transition in your life.”

What is downsizing?

Downsizing generally refers to selling your current home in favor of a smaller one, but that definition is a broad one. 

“Downsizing traditionally means moving from a larger home to a small home, most often because the owner simply doesn’t require that amount of space anymore,” Close says. “However, it can more generally refer to simplifying your housing situation—perhaps it’s less space, but perhaps it is also driven by a desire for something that needs less maintenance—maybe a condo with no yard—and a more simple life.”

Roger Lasater, director of sales at Kindred Homes, a builder, says retirees also commonly look to downsize. 

“Homeowners who consider downsizing often include empty nesters, retirees, those seeking to reduce living expenses, and people looking to simplify their lives and reduce their environmental impact,” he says. “People in their 50s and 60s may also choose to downsize, generally to a townhouse for simplicity of upkeep or a single-story home for mobility.”

Of course, downsizing doesn’t just have to mean a lower square footage. Some homeowners downsize for the reduced upkeep of a condo or apartment. Others might simply want a home whose layout is more conducive to their current lifestyle. That might mean fewer bedrooms but a larger plot of land for gardening, for example. 

And experts point out that downsizing doesn’t always mean saving money, either. Depending on where you’d like to live, buying a new home could be a lateral move in terms of finances. 

“It really depends on where you are coming from and where you want to go,“ Close says. “Here in Chicago, a nice average home in an average suburb compared to an average condo in maybe a slightly upscale neighborhood in the city? Those are going to be about the same price, and could easily be more depending on the details.” 

Lasater agrees: Downsizing can be expensive, at least at first. 

“The cost of the new property, location, and other factors can impact the overall expenses. However, downsizing often results in lower mortgage payments, utility bills, and property taxes, freeing up more cash flow,” he says. “Although downsizing can have financial benefits, it may also incur costs like selling and moving expenses. It’s important to consider all expenses before making a decision.”

Deciding When to Downsize

Unsure when to downsize? It’s a very personal choice, but one you might consider if you’ve experienced a job loss, divorce, retirement, or if your children have moved out. 

“The ideal time to downsize depends on personal circumstances, such as changes in family dynamics, a desire for a simpler lifestyle, retirement, or financial reasons,” Lasater says. “Factors like divorce, the loss of a loved one, and accessibility can also prompt the decision. However, before downsizing, it's vital to research your desired location, the type of property you want, and your budget.”

Close says if you feel the time is right, don’t let the market tell you otherwise. 

“Downsizing is very much a quality of life decision, so I always advise clients to not let the market dictate the decision when such a decision may greatly improve their quality of life and overall daily enjoyment—it should not be delayed if you feel the time is right,” Close says. “Life is too short!”

What to Look for in a Downsized Home

Ready to make the move? It’s best to start by finding a trusted real estate agent and broker who can bring your dreams for your next home to fruition. 

“Working with an experienced real estate broker—ideally one that can handle both transactions, assuming you are buying and selling—to really help facilitate the move and make sure you are achieving your goals and holding you accountable is key,” Close says. 

Then, as you search, look for a home that meets the criteria on your wishlist. 

“When searching for a home to downsize into, I would advise buyers to think about what they may need during the start of their retirement and into the next phase in the later years,” Adams says. “Make sure your wishlist includes things to help make life easier as you age in order to stay in your home longer.”

Adams says you should consider whether you’ll live in the home full-time or seasonally, whether you plan to entertain guests frequently, and whether the home could accommodate you as you recover from a surgery, for example. 

Finally, get down to the actual specs of the home. 

“Look for an affordable location with enough bedrooms and bathrooms, outdoor space, storage space, and proximity to necessary amenities,” Lasater says. “Focus on what will improve your quality of life and make sure that your new home has the amenities that are important to you, such as adequate space for a home office if needed. Consider the space requirements of your family and guests while keeping your budgetary goals and existing furniture size in mind.”

You’ll also want to consider the surrounding neighborhood and community and whether you’ll have access to certain amenities such as hospitals, restaurants, or walking paths. 

“If you've come from living in a single family home for 30 years and you’re getting ready to move into a 30-unit apartment building with neighbors on all sides, that can be culture shock to some people,” Close says. 

Be sure too that you have a firm grasp of the costs associated with your new home and with the move itself. Close points out there are often new HOA fees, your taxes might be different, and certain utilities might be included in your monthly bills. 

Preparing to Downsize

As Close says, if you aren’t paring down your belongings, are you really downsizing? As you prepare to move, take a hard look at your things and see if you can donate or sell any of the items to ensure your new space isn’t cluttered. 

“Consider disposing of items that no longer serve a purpose and focus on what truly matters to you,” Lasater says. “When deciding what to keep, consider the sentimental value, the worth of the item, if it will fit in your new home, and if it will work with your new home's decor and color palette.”

Adams suggests starting to go through your things sooner rather than later, so you don’t feel rushed during what is sometimes a difficult or emotional process. Professionals can help you go through and organize your things if you need assistance.

“I have heard many people say that they want to move but just don’t want to think about moving and packing the home they have lived in for so many years,” she says. “Others have trouble deciding what to try to pass on to other generations.”

Close says fitting your life into a smaller home can be a shock for some.

“Downsizing is often a challenge because clients have become accustomed to the conveniences of a larger home, particularly as it pertains to storage and space for certain pieces of furniture, perhaps larger or uniquely sized items,” Close says. “There will be sacrifices made when downsizing in exchange for the simplicity it offers, and you want to be aware and thoughtful about how to approach that decision.” 

Even if you aren’t looking to downsize any time soon, periodically going through your belongings can make the process easier down the road.

“Ultimately, downsizing is not just about getting rid of things—it’s about creating a space that supports the lifestyle we want to live,” says Catherine Dugan LaBelle, a broker with Baird & Warner based in La Grange, Illinois. “By letting go of items that no longer serve us, we can make room for new experiences and opportunities. And by doing so proactively, we can ensure that our loved ones are not left with the burden of managing our possessions in the future.”