The real estate market has exploded. In 2021, prices are up nationwide compared to 2020. This is true in most cities and states as well. The widely followed S&P/Case Shiller Index shows that the number is over 20% in some states. The reasons for the rise include historically low mortgage costs. Also, many people want to move from expensive cities on the coasts to less expensive cities inland. These smaller cities are often perceived as having a better quality of life. Relocation has become easier because millions of people can work from home and do not have to go to offices that are often in the larger metropolitan areas.
Many people who sell homes have made large returns on their investments. For people who want to move to smaller homes, it is a particularly good time. They can take their home equity and use it to buy less expensive homes with fewer square feet. This can be particularly attractive to couples who had children at home that have left as they grew older.
StorageCafé looked at the country’s 20 largest markets by population to determine the difference between the price of a four-bedroom home and one with only two bedrooms. The research also considered changes in property taxes over 10 years and selling and buying closing costs.
It is not surprising that the cities that top the list are the most expensive housing markets in the country. The city with the most downsize savings was San Francisco at $406,600. It was followed by San Diego, Los Angeles and Seattle (see list below).
The study pointed out that there are some aspects of downsizing that are not just the difference in home prices. The researchers wrote:
Downsizing serves homeowners in a variety of ways. Not only can people enjoy premier locations for less, but they’re also setting themselves up for a simpler, often easier living situation. A smaller home means less maintenance work and cleaning efforts, reduced utility costs and a lower carbon footprint.
These are the 10 cities where downsizing saves the most:
- San Francisco ($406,600)
- San Diego ($264,700)
- Los Angeles ($239,800)
- Seattle ($234,500)
- Miami ($233,700)
- Boston ($232,900)
- New York ($215,400)
- Detroit ($209,800)
- Washington ($209,600)
- Philadelphia ($194,000)
Click here to see the most expensive cities to buy a home in.
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