Is Now The Time To Downsize?

According to a new study for the National Reverse Mortgage Lenders Association (NRMLA), older Americans have a pinnacle of property wealth. The study found that property wealth increased by 1.95% ($11.81 billion) to $226 billion in the last 12 weeks leading up to December 31, 2022, compared to the previous quarter. This is the highest recorded level in more than 20 years.

 These numbers confirm that owning property continues to remain a solid long-term investment. For many older Americans, this is an excellent time to explore downsizing their home and freeing up equity for their financial goals during retirement.

According to industry researcher CoreLogic, recent data shows that home value growth is slowing across America. Year-on-year rises have now slipped back to single digits, registering 8.6% last November. Here are a few things to keep in mind as you or a loved one considers downsizing:

• It’s a Big Decision, Don’t Rush It

Talk to friends who have already downsized, and learn from what they learned along their journey. Discuss your plans with children and family members, as there is also substantial emotional investment in saying goodbye to a family home. Help those in your life understand your decision, so you have the support you need. 

• Think About Your Future

What does your retirement look like for you? What do you need to fund your retirement? What type of home (apartment, duplex, condo, etc.) do you see yourself living in? Considering the answers to these questions is crucial, so you are confident in making downsizing decisions.

• Signs It’s Time To Downsize

Cleaning gutters, mowing lawns, vacuuming, and repairs can all become overwhelming as homeowners age, making downsizing to a smaller home and yard enticing. It also might be time to consider downsizing if it becomes physically hard to move in, out, and around the home easily. 

• The Cost of Home Upkeep

Homes cost the same amount of money to upkeep, if not more, in retirement, while your income may decrease to some degree. You may be wasting money on heating unused rooms, appliance updates, home repairs, etc., that you could be putting towards travel and other retirement financial goals. 

• Consult with Experts

Talk to a trusted financial advisor about your retirement goals and the assets you have to help fund those wants and wishes. Downsizing doesn’t automatically mean you’ll have all the cash necessary to achieve your goals. You’ll also want to talk to a trusted real estate professional, like a Brightwork agent, about the current market, what your home is worth, what your downsize options are best for you, and more.

If you or a loved one is looking to downsize, a Brightwork agent is here to help you navigate your options. Our team of professionals includes Realtors that are certified in working with estates, seniors, and those entering various stages of life. Learn more about our estate services here.

Ready to downsize? Contact us here or give us a call today at 925-200-6000.

NOTE: The information in this article is general in nature and provided as a general overview only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.