While some downsizing challenges specific to individuals have long been established, there are newer housing industry issues that have made it even trickier for many. Agents today have to be ready to address every aspect of downsizing for sellers willing to undertake the process. First they need to understand and calm the emotional waters.
“Downsizing is a delicate process,” says Jeffrey Decatur, with REMAX Capital in upstate New York. “There are many factors that play into it. Is it a personal, logical decision? Is it a family-based decision? Is it a health, age or forced decision? I have seen all three, and variations thereof. It is best to plan it out slowly, and have difficult conversations now about reasons for downsizing.”
Acknowledging that downsizing is not without its challenges, McKinney-Tritschler notes that one of the biggest hurdles for sellers is emotional, as letting go of a home filled with decades of memories can be overwhelming.
“Logistically, the lack of suitable inventory can also create hesitation, as many homeowners want to know exactly where they are going before listing,” she says. “I often find myself helping clients think creatively about timing, whether that means exploring off-market opportunities, negotiating flexible closings or structuring a plan that reduces stress during the transition. Downsizing is rarely just a transaction; it’s a shift in lifestyle, priorities and sometimes identity, which is why patience and thoughtful communication are key.”
Perrin adds that even if downsizing is possible budget-wise, the logistics are always tricky when a “sell to buy” is involved, and there are more emotional factors associated with letting go of what was or is the “family home.” The thought of sorting through what stays versus what goes can prove daunting and create delays in the process.
Harris points out that even when the process goes smoothly, it can backfire for some downsizers.
“Some of the biggest issues I’ve experienced are related to them not liking their new lifestyle,” she says. “I had one client that remodeled a house to live in with her daughter and just couldn’t adapt to that lifestyle. Another that moved into a 55-plus active adult community quickly sold because she just didn’t like it. Another challenge is often timing, when they really need to move at their own pace and move with peace of mind. It’s often a huge challenge just letting go of all of the collectibles, family heirlooms and holiday decor.”
In some places around the country, downsizing has become more difficult simply because of a lack of smaller houses available.
“For the past decade, most builders have focused on larger homes because the economics simply make more sense,” says Eddie Garcia, with Realty of America in Berwyn, Illinois. “When land, labor and material costs keep rising, builders naturally gravitate toward larger homes where the margins are stronger. The result is that the supply of smaller homes has not kept up with demand. That is creating a real challenge for retirees and empty nesters who want to downsize.
“In many cases, the type of home they are looking for either does not exist in enough supply or is priced at a premium because smaller inventory is so limited. There is also a missing middle in housing that we used to see more of in cities like Chicago, with two-flats and three-flats (separate homes atop each other in one building). Those types of properties historically created more attainable housing and naturally gave people downsizing options. Today, we simply are not building enough of that product. Until more smaller homes and middle housing options are built, many homeowners who want to downsize will continue to find very limited choices.”
That’s also the case, it seems, in Los Angeles, according to Brandon Meneses and Dennis DeWalt, both with The Beverly Hills Estates.
“Many of our sellers are experiencing significant challenges when trying to downsize,” says Meneses. “Over the years, the inventory of smaller homes in LA has steadily declined. Increasingly, these properties are being purchased by developers who demolish them to build much larger estates.
“For example, a recent sale at 1237 Bel Air Road was a 3,881-square-foot residence, considered relatively modest for the neighborhood. The buyer was a developer who plans to redevelop it into a 10,000-plus-square-foot mansion. Because of this trend, roughly 25% – 35% of our sellers ultimately move out of state when downsizing due to the limited local options.”
DeWalt agrees that from a development standpoint, the greatest profits come from acquiring smaller homes and redeveloping them into mega-mansions. As a result, smaller homes across many LA neighborhoods, regardless of price point, are frequently purchased by developers.
“This dynamic creates a ripple effect,” he says. “Highly affluent buyers continue concentrating in LA, while older homeowners and those looking to retire or downsize often relocate elsewhere. Many choose nearby destinations such as Santa Barbara or other communities where suitable downsizing options are more attainable.”
In New York City, the skyrocketing price of co-ops also puts a crimp in many downsizing plans.
“The reason why is sometimes a buyer will want a low-price studio or a one-bedroom, but because so many of those are higher priced, seniors are often shocked at how much they would need to spend from their savings, or loans they must take out to purchase something less than what they have now in terms of space,” says Coldwell Banker Warburg’s Alana Lindsay.
Splendore admits one issue can pile onto another, making what would seem to be an easy process very challenging, especially to seniors, who make up a large segment of the people trying to go smaller.
“Downsizing clients can be indecisive not only due to age and health issues, but also because money can be a huge concern,” he says. “Will they be able to sell? Trust is another issue. Can the senior downsizer trust the agent, buyer or mortgage broker? I have found that careful explanations, often repeated, with written instructions and lists, sometimes in color-coded files, timelines and the ‘personal touch’ of following up with phone calls or visits can help immeasurably.”
