For years, it was common for people to buy homes that offered far more space than they would realistically need - even with kids. Young couples would buy 2,500 sq. ft. houses; Small families with two children would only consider homes for sale that offered 3,000 square feet or more. The bigger, the better.
This trend has finally begun to recede as homeowners are now considering the benefits of downsizing. The sluggish economy has definitely played a role. Those who are struggling to make their mortgage payments have been forced to ponder the advantages of slashing those payments. But there are plenty of other reasons to consider moving into a smaller house.
In this article, we'll explore both sides of the issue. We'll first describe some of the reasons other homeowners have decided to downsize. We'll then take a look at the potential disadvantages. The following will provide a good foundation from which you can decide if downsizing makes sense for your lifestyle.
Reasons To Economize
As noted, one of the advantages to buying a smaller house is that your mortgage payments will be smaller. That means you'll have more money left over at the end of each month. This money can be used to build your investment portfolio, enjoy more frequent vacations, or pay a child's tuition.
Second, it's less expensive to keep a smaller home running than a larger one. For example, it's less costly to keep the inside warm during the winter, cool during the summer, and well-lit year-round.
A third benefit to downsizing is that a small house is far easier to keep clean than a large one. Those who purchased large homes years ago were often surprised by the time and effort required to clean them.
Together, the smaller mortgage payments, lower energy costs, and less effort required for cleaning make owning an economy-sized house less stressful. Many homeowners are shocked by the differences once they make the transition.
Are There Drawbacks To A Smaller House?
Buying a smaller house can pose a few potential drawbacks, depending on your priorities. For example, you'll have less room for hosting get togethers with friends and family. Letting visitors stay overnight may also prove challenging.
Second, a lot of homeowners prioritize outward appearances. A smaller house seems less impressive than a larger one. It may convey the idea that the homeowner is less wealthy or influential than he or she would like to be perceived.
Another drawback of downsizing is that doing so requires throwing away a sizable portion of the homeowner's belongings. There's seldom enough room in the new, smaller home to accommodate everything. The only alternative is to place extra couches, tables, and other furniture into storage.
There are many economy-sized homes for sale that can satisfy the needs of most homeowners. But migrating from a larger home to a smaller poses significant changes. It takes time to adapt.
The Market Means Little
When making the transition, a lot of homeowners are focused on selling and buying at the right time. That is, they prefer to sell their larger house at the top of the market - thereby, reaping maximum appreciation - and buy their smaller house when prices drop.
Timing the real estate market is a dangerous goal. It rarely, if ever, produces the expected outcome. Moreover, the prices of both the old (i.e. large) and new (i.e. small) houses follow the same path. A 7% rise or drop in broad market values will be reflected in both properties.
Downsizing represents an ideal solution for homeowners who find owning larger properties overwhelming. In fact, as the public begins to retire their debt and prioritize their savings, we'll likely see more people begin looking for smaller homes for sale.