Downsizing can be a good decision in many scenarios, from empty-nesters who no longer need the big home to people who simply want a house that’s easier and cheaper to maintain. But, more importantly, downsizing can generate significant savings for homeowners who are willing to sacrifice some of the space at home.
A recent StorageCafe article looked at how much homeowners in the country’s top 100 metros by population can save while downsizing from a 4-bedroom home to a 2-bedroom one, taking into account the price difference between the two properties, property tax savings over a period of 10 years, and buying and selling closing costs as well. Overall, across the 100 metros analyzed, homeowners can potentially save around $196K if they decide to downsize. However, the downsizing savings potential can vary significantly when looking at individual metro areas.
Californian metros can generate substantial downsizings savings for homeowners
Californian metros are among the most profitable for homeowners who are planning to move to a smaller home. The San Jose metro area ranks first nationally, with potential savings from downsizing at almost $778K within the metro area overall. Those who want to keep living in San Jose city proper but in a smaller home can pocket around $663K. City-to-city downsizing, between the major cities of the metro area, can be even more profitable: trading a 4-bedroom home in Sunnyvale for a 2-bedroom one in San Jose could free up about $1.66M for homeowners.
The San Francisco metro area is the second-best for people who are willing to sacrifice some of their space at home. Moving from a 4-bedroom home to a 2-bedroom one in the Bay Area could result in savings of approx. $563K. Those who love the vibe of San Francisco city proper are even luckier, as they could end up with $642K in savings if downsizing.
Other Californian metros where downsizing makes a lot of financial sense are San Diego and Los Angeles. The San Diego metro area ranks fifth nationally in terms of downsizing savings potential. Trading a 4-bedroom home for a 2-bedroom in the metro area can bring over $340K to homeowners while doing the same type of move in San Diego city proper can result in even more substantial savings of around $455K. Los Angelenos stand to gain around $331K if they move to a smaller home anywhere in the metro area. When looking at city-to-city moving among the metro area’s major urban centers, the most profitable downsizing route is Los Angeles to Anaheim, which can line homeowners’ pockets with $480K.
The Urban Honolulu metro area is another place where downsizing is well worth it. After all, how much time are you spending indoors anyway, when living in a gorgeous place like Honolulu? Homeowners who decide to switch their large home for a smaller one could end up saving around $519K. Those who are willing to relocate from Honolulu city proper to Pearl City stand to gain even more, at around $895K.
Downsizing is profitable in the New York metro area as well
Although East coast metros generally provide lower downsizing savings compared to their West Coast counterparts, it’s still a very profitable decision here as well. Downsizing within the New York metro area leads to potential savings of around $248K – not to mention the lower utility bills and less maintenance and cleaning. Of course, there are also disadvantages when it comes to downsizing, and having less storage space at home is one of them. However, this problem has an easy fix – homeowners living in smaller homes can use self storage to make up for the lost space. Renting a 10’x10’ self storage unit in New York City hovers around $250 per month, and such a unit can hold plenty of belongings people don’t use on a daily basis, such as out of season clothing, sports equipment, holiday decorations, extra furniture and appliances and so on.
When zooming in on the New York metro area’s cities, boroughs, and neighborhoods, we notice even more potential for downsizing savings. For example, relocating from a 4-bedroom home in New York City to a 2-bedroom one in Newark will result in savings of over $500K.
With Manhattan boasting the most expensive real estate in the country, it’s hardly surprising that moving to a smaller home in the area can result in very impressive savings. Downsizing in the Midtown neighborhood, for example, can bring in over $5.6M to homeowners. Homeowners who are willing to leave Midtown and Manhattan altogether could pocket even more. Downsizing from Midtown to Riverdale results in a whopping $7.42M in savings, while leaving Midtown for Forrest Hills is almost as equally lucrative, with potential savings of $7.38M.
Other top neighborhoods for downsizing savings potential in Manhattan include West Village ($4.6M) and Flatiron District ($4M). Brooklyn Heights offers the biggest downsizing profits among all Brooklyn’s neighborhoods, at $2.3M. Forrest Hills is the best neighborhood in Queens for homeowners willing to move to a smaller home, resulting in savings of over $1M. Riverdale leads the Bronx in terms of downsizing savings, with around $770K. As for Staten Island, trading a 4-bedroom home in Tottenville for a 2-bedroom one in the same neighborhood is the winning move, with potential savings amounting to $543K.
Downsizing to a smaller home is an adjustment and a major lifestyle change – but it can also lead to significant savings, not only in terms of money, but in terms of time and effort as well, since smaller homes are less demanding in terms of cleaning and maintenance.
We hope you found this blog post on Find Out How Much Money Homeowners Can Save By Downsizing useful. Be sure to check out our post on 6 Top Tips When Downsizing Your Family Home for more great tips!