The hidden costs of downsizing

When Bryn Smythe, 64, and Jack Reuben, 67, downsized from their three-story, 100-year-old home in the Philadelphia suburbs to a townhouse nearby in 2023, they were determined to save money.

“In the area that we live in, it was really easy to find something equally expensive as what we just sold,” Smythe said. “That isn’t in the cards for us.”

Finding a home within their budget took patience and compromise. The townhouse wasn’t picture perfect when they moved in — it needed new flooring, paint, kitchen renovations and, later, an HVAC system — but it fit their needs, and they were prepared to make it work.

“We are willing to update it,” Smythe said. “Some people our age that are downsizing, they don’t really want to do work, they want it to be pretty much OK when they move in.”

Move-in-ready living is attractive to older homebuyers, many of whom swap high-intensive family homes for low-maintenance townhouses, carriage homes, ranches or senior living units. Financially, these moves can leave seniors with an even trade instead of the high profits they expected. But there are ways to get the most out of your home.

Sue Fitzgerald, a real estate agent with Compass who helped Smythe and Reuben sell their home, said that seniors were “often shocked” to find that downsizing was “still quite an expensive step,” even when their homes had appreciated a great deal. This can be emotionally and economically challenging, she added.

It can also be hard to avoid. In Pennsylvania, the median home age is 60 years old, and 67% of the housing stock was built before 1980, according to 2023 census data. Newer housing has been slow to pop up and, when it does, can attract heavy competition.

Kate and Paul Hermans, both 57, chose to rent a nearby apartment after selling their “architectural gem” of a home in Radnor, Pennsylvania, in June, and waiting for their newly purchased home in Malvern, Pennsylvania, to be gutted and renovated to their liking.

“Our ideal would have been to sell and to purchase the home that we would move into,” Kate Hermans said. “Eventually it became clear that we weren’t going to be able to do that, and so we were going to have to find a bridge solution, which was renting.”

Selling was less of an issue for the Hermanses, whose house quickly captivated young buyers. But not all older homes go so easily. In addition to home prices, today’s interest rates are higher than they were a few years ago, and interested buyers don’t always have the financial means to put in high offers. The Hermanses said their buyers relied on a combination of mortgages and parental support to fund their move.

“The market is not functioning as well as it did pre-COVID, and so that kind of makes it harder for people of any age to move,” said Patrick Gourley, a professor of economics and business analyst at the University of New Haven.

Fitzgerald, the agent, said that many millennial and Gen X buyers, who are more likely to be interested in larger homes, don’t have the time or interest to fix up an outdated house.

As nitpicky as younger buyers’ requests may seem, it can be wise for sellers to meet them before putting their homes on the market. Marie Gordon, another Compass agent, said modern renovations could add significant value to a home — twice what the owner invests in the changes.

“That’s if they’re letting their agent help them with the decisions,” Gordon said. “If they go in and say, ‘I’m going to redo my kitchen and make my house more valuable,’ but they choose everything that they like, that might not be the trend, that’s not going to serve them well.”

Gordon frequently advises clients on home renovation decisions, even if they are years away from selling. This summer, a client asked her for advice on converting a bedroom into a primary suite. This was an intelligent choice, she told them, that would add value to their home.

She added that she encouraged clients to communicate with her early and often, “so they know that they’re making an investment in their home at the same time that they’re doing something for themselves.”

Or, so they know to save their money on a project that ultimately won’t improve their home value.

Perhaps more prudent than large renovations, real estate agents encourage older adults to make design edits to their home, such as removing carpets, wallpaper or draperies, to appeal to younger generations. Such swaps can make homes more photogenic and, in the age of Instagram, attractive to home seekers.

According to a recent report by the National Association of Realtors, 83% of buyers consider photos a valuable feature when searching for a home online. People who list their homes unedited may find that they are on the market for longer or sell for a lower price.

Gourley, the professor, said that while the payoff was not good enough for everyone, the real estate landscape was “very much a seller’s market” in 2025.

“Anyone who says they’re having problems selling a home right now is actually having a problem selling their home for the price they want,” Gourley said. “Especially if people are first owners and they built their dream home, they expect to get more than the market is valuing their house because for them, their house is perfect.”

Some older adults delay downsizing because of their emotional attachment to their dream home or the belongings inside it.

More recently, Fitzgerald said seniors had also been retaining homes for the sake of their children, whose entries into the housing market can be blocked by high prices.

“Kids are launching themselves much later than they used to — because it’s expensive for them too,” she said.

Lockdown periods in the early 2020s likewise “changed the perspective of a lot of downsizers,” and incentivized some to keep their homes for longer than they initially intended, Fitzgerald said. Family homes became safe havens for children and relatives, and owners recalculated the value of their place.

Staying in a home can be feasible for some people, depending on familial and financial circumstances. But it can also be risky, depending on the home’s safety and the owner’s health. The NAR surveys reveal that 30% of adults ages 60 to 69 are motivated to move for health reasons, while another 30% never want to move. Only 19% report being motivated to move by a desire to downsize.

Too often, Fitzgerald said, health scares such as falling down stairs force older adults to downsize, stripping them of extra time to plan. Agents urge older adults to prepare for downsizing — to avoid financial and medical calamities — before they know if and when they will flee their nest.