Homeowners across the country can save around $196K by downsizing from a four-bedroom to a two-bedroom home, according to a new report from StorageCafe released last week.
StorageCafe’s report looks at where downsizing saves the most among the country’s largest 100 metros, taking into account the price difference between a four-bedroom home and a two-bedroom one (a classic move for empty-nesters), property tax savings over a 10-year period, as well as selling and buying closing costs for both houses.
Key highlights:
- The San Jose-Sunnyvale-Santa Clara, California metro area takes the first spot, ensuring downsizing savings of $778K, followed by San Francisco-Oakland-Berkeley, California at $563K; Urban Honolulu, Hawaii at $519K; Bridgeport-Stamford-Norwalk, Connecticut at $463K and San Diego-Chula Vista-Carlsbad, California at $340K.
- Savings can reach $663K on average in San Jose alone, and switching from a four-bedroom home in Sunnyvale to a two-bedroom in San Jose can result in savings of around $1.6M.
- California is an extremely profitable state for homeowners moving to smaller residences, with six of the top 20 metros that offer big savings through downsizing.
- The best-placed Southern metros in the ranking are in Florida: Miami-Fort Lauderdale-Pompano Beach in 7th and North Port-Sarasota-Bradenton in 9th.
- Dallas-Fort Worth-Arlington is the only Texan metro that makes it to the top 20 nationally, with around $245K in potential downsizing savings. Those who don’t feel inclined to leave the city of Dallas proper stand to gain even more: approximately $360K.
- At the other end of the spectrum, Rochester, New York, is the metro area that offers the least amount of downsizing savings to homeowners, with homeowners saving only roughly $98K.
- Ogden-Clearfield, Utah, and Tucson, Arizona, follow the same path, with downsizing savings at a low $99K within their respective metro areas.
Major takeaway:
“Downsizing can be a smart move for a variety of reasons, from wanting to reduce carbon footprints to seeking smaller bills and reducing time and effort spent on housing chores. But more than that, switching to a smaller home can give a big boost to your bank balance, allowing for various investments and travel or helping swell your retirement savings account,” said Maria Gatea, a creative writer for StorageCafe and the author of the report. “Naturally, there are many factors that might affect the proceeds resulting from downsizing, including the condition of the new home and how much improvement it needs, relocation costs, and the decision about whether to continue owning or to rent. There are also HOA fees if you’re switching to condo living, as well as any capital gains tax that might be incurred from the sale. But essentially, how much homeowners can really save from downsizing depends on location, as it dictates much of a home’s value.”
For the full report, click here.
