According to a survey by the National Association of Realtors published in US News, people who are downsizing their homes plan to stay at least 15 years. The survey also found that despite the bulge in the baby boomer population, downsizing has not increased for various reasons – tight economy, poor stock market performance, and tighter lending. So, if you’re thinking of downsizing or remodeling, how do you choose?
First, if the average downsizer plans 15 years in the new space, you could easily remodel your existing space to fit your new needs. Whether that’s adding universal design elements and preparing your home for “aging in place,” or creating a great room for more entertaining, remodeling can give you the dream space you want in the home you already know and love. Remodeling doesn’t call for all the “purging” of years of collections, but it’s always a good idea to organize your belongings and have a place and a purpose for everything. Your remodeling professional can help you create that place, as well as guide you to features that will serve your needs for the next 15 years and beyond. The beauty of remodeling is even greater if you’ve paid off your home and have no monthly mortgage payment.
If you choose to move to a smaller home, you will have a smaller monthly mortgage payment, but it may be a new expense. The money you save can be put against remodeling the new digs to customize them to your needs. The NAR survey estimates that the average downsizer buys a home that is $27,000 less than the one they are selling. Savings may also come in reduced property taxes or transportation costs. Plus, you may choose to use the extra cash from the sale for remodeling. Regardless of how you get there, it doesn’t have to be an “either/or” proposition. If you do a good financial plan, and work with a good custom builder, your decision will be easier.