According to research from the Pew Research Center, on January 1, 2011, the oldest Baby Boomers turned sixty-five and every day until 2030 or for 19 years after that date, about 10,000 more will cross the 65 year old threshold. This gives notion to the fact that boomers who own large homes will start contemplating the need to downsize. My wife and I have already reached that milestone.
The thought of downsizing our current home became a topic of conversation three years ago for my wife and me. We have lived in our home for 12 years, longer than any other house since we were married 41 years ago. We have made it a special place that has been ideal for our children, grandchildren, and close friends to visit. It is the family home where our grandchildren have become fiercely territorial with each one of them designating a specific bedroom or a space as theirs that they consistently use when visiting.
We are proud of our home and very much emotionally tied to it. But the stark reality is that the house is more than we need at our stage of life. Our children are out of the house, the youngest grandchild is in college, the stairs are uninviting to climb, the one acre yard takes too much time, effort, and expense to maintain. And there are sections of our home that are hardly used. From a financial standpoint, we would benefit from our strong equity position if we were to sell it.
With all these justifications in mind, we started talking about the “D” word. We discussed and joked with each other about downsizing often but found reason after reason to stall the decision for over 3 years. But with each year’s passing, it became increasingly evident that it was prudent for us to downsize. This commitment required another string of decisions that required careful thought, agreement, and taking actions on our respective parts to downsize.
The most important action we took was to make decisions on the following questions:
- Where were we moving to? Specifically, the city and the county to which we would move.
- What was the ideal home for our current and future stage of life?
- Would we stay in Texas or move closer to our children and grandchildren?
- Build new, purchase an existing home, Condo/Townhouse, or move to a 55+ community?
- What was our all in budget?
In the process of making these decisions, we realized that we had to establish solid baselines and be as realistic as possible about our current and future physical capabilities and requirements. This was a tedious progression, but well worth the effort as the process eliminated guesswork as we moved further into making final downsizing decisions. There were other subtle considerations, but our benchmarks included the following:
- A home that eliminated the challenges we have in our current home.
- A home that was the right size for our needs.
- A home in a safe area, easily accessible to amenities, and medical facilities.
- An area with moderate property taxes, and a reasonable possibility for appreciation.
- A home with a desirable and fun amenity that is not present in our current home.
After careful deliberations, and my wife’s snide reminder that I was a REALTOR® and should be able to find us the perfect home, we made the decision to stay in North Texas, purchase a detached, new construction home near one of the local lakes.
We agreed to reduce the size of the house by 1100 square feet by removing the second story, a full bathroom, a formal dining room, one bedroom, and replaced our large game room with a smaller media room. We also cut our lot size by 60% to just under a half-acre. Once we move, I can l buy a robot mower and eliminate 90% of my lawn mowing.
Going forward it is our belief that these changes will reduce our utility costs by 50%, eliminate tedious landscape chores and expense, remove the hazard of climbing and descending stairs, and provide a more efficient use of the space in our home. This also gave us the added benefit of making our home easier to clean and maintain.
How we decided the new location.
I strongly advise anyone that is contemplating the downsizing process to secure the services of a REALTOR® early in the process. Their advice and local knowledge about where you should consider living will be invaluable.
In our case, my local real estate experience quickly allowed us to eliminate areas not conducive to our downsizing goals and focus only on those that were.
We decided to stay in Texas because of its vibrant economy, excellent schools/universities, outstanding medical facilities and headquarters for so many diverse groups of corporations such as Toyota, State Farm Insurance, Abbott Laboratories, and AT&T. The mixture of these service and technology based companies makes the area less susceptible to economic downturn pressures, enhances the area’s growth potential, and provides a strong tax base to support ongoing community services.
When we considered these attributes, it made sense for us to downsize in North Texas. Staying in the area significantly reduced the cost of moving our household to our new home. These are the key location considerations we used and they can easily be employed in any area of the country.
Property taxes and medical facilities.
There are Baby Boomers that may want peaceful rural or country living. However, if you fall into this category, carefully consider your access to medical facilities and their timely response to any urgent medical needs. That log home overlooking the lake may be peaceful and tranquil, but if it takes to long for medical assistance to reach you in an emergency, it could be a matter of life and death.
As to taxes, you may see a benefit in moving to a smaller home as it is likely to have a lower assessed value than your previous home. Look at tax rates for the city and county and take advantage of all of the tax exemptions allowed. Understanding tax assessments, exemptions and special assessments may save you thousands of dollars per year.
New construction or existing home
This was not a difficult decision for us to make. We wanted no part of the expenses to replace or repair outdated appliances, kitchen and bathroom fixtures, HVAC systems, and other maintenance costs that might be present in an existing home.
New construction homes come with a strong warranty, are constructed with modern energy efficient materials, and will eliminate major expenses for repairs while giving us the greatest opportunity for appreciation.
A new home also gave us the flexibility to design and include features that were important to us. In my case a wine cellar, a porcelain patio and flower garden for my wife, and an outdoor kitchen for both of us. A new construction house also allowed us to install smart home features easier and cheaper than retrofitting an existing home.
Features such as such as fiber optic broad band, a home network to power security cameras, Wi-Fi access points for better connectivity and a robust home security system, more efficient and automated irrigation, and a highly efficient HVAC system are the types of improvements we are employing
Why not a 55+ community, or assisted living?
This is one of the decisions that has to be weighed carefully. Knowing and being honest about your physical and mental capabilities now and the immediate future is crucial. Not doing so could put your wellbeing in jeopardy and require you to relocate your home a second time under the duress of a major medical event. After assessing our physical and mental state we determined that living in an age restricted community was not a fit for our lifestyle.
Our overall health and mental capacity is sound. And the new home’s location is in close proximity to quality medical resources that can provide rapid emergency response if required. We also structured our new home with aging in place as a primary objective. There are no trip hazards, narrow doorways, and all facilities are accessible. The house can be easily upgraded with added safety and support features as our needs change or should we become handicapped.
Making the process fun and exciting
Staying positive has been the key to making our downsizing process fun and exciting. Although our previous homes were nice, there was usually something additional that we wanted such as an expanded deck, outdoor kitchen, wine cellar, landscape water feature are things we did not have in any of our previous homes. wanted. In the downsizing process we committed to adding something from our wish list.
My wife is a Master Gardner and has a talented passion for planning the design of landscape plants, flowers, shrubs and trees. She is enthusiastically planning the blank landscape that is available at our new home. My excitement has been centered around the building and stocking a home wine cellar, setting up smart home features, and the most efficient broadband home network possible to manage and secure it.
Downsizing is a personal decision. Whether you are downsizing from a $2,000,000 luxury home or a $700,000 home, considerations why may be different, but the process is the same. It has to be approached with realistic expectations of what is best for your current and future life stages.
Take time to plan your physical and mental requirements as well as financial, medical and ongoing housing requirements. Have fun with the process by incorporating a few fun features you want that were not present in your current home.
Take the emotion out of your housing decision by utilizing the services of a REALTOR® to guide you through the process. They can provide nonbiased information and recommendations that go far beyond that of people not involved regularly in real estate transactions.
Getting accurate information and making an honest assessment of your needs will give you confidence in your decision and it will be less stressful as you implement your downsizing plan.
Contact Al Denson if you’d like a downsizing consultation and to develop a customized plan tailored to your specific requirements.