Many years ago, I had a family member who was working for a company building new homes in Beverly Hills. I remember going on a tour of one of the homes while it was being built. Wow, it was huge! The master bedroom was unlike anything I had ever seen. There was a master bedroom entryway, a master bedroom sitting room, the actual master bedroom, his and her bathrooms and his and her closets. (closets so large that there was room for several pieces of gym equipment). I remember thinking at the time that the home my wife and I lived in was smaller than one of the closets and that my in-laws had just built a large new beautiful home that was about the same size as just the “master suite” of this home.
The price tag on this home was to be around $29 million. While the home was neat to see, I remember thinking if I could buy that home, would I be ok with it, or would I feel it immoral to spend so much on a home with all the needs and impoverished people suffering around the world? Jeff Bezos recently bought a home in Bel Air, California for $165 million. Is that too much home? Everyone has different needs and requirements in their personal residence. Mr. Bezos has security and privacy concerns that most of us don’t have to deal with, but does he really need to have a home worth $165 million?
In addition to pondering the morals of spending so much money on your home, there are many other factors when thinking about the size of your home. One hundred years ago, the average size of a home in the US was 1,048 sq. ft. The average size continually climbed until 2016 peaking at around 2,700 sq. ft. and since then come down to just under 2,600 sq ft.
There are different requirements everyone has in the size of their home and they change over a lifetime. Do you know what they are for you? It is common to start with a small condo, townhome, or small starter home, move up and upgrade to a larger home as needs change. Often it is to start having children and needing more space for a growing family, and then as kids age, it is typical to downsize or what has often been referred to as re-size their home size as they age. While the decision to upgrade into a larger home is evident with increasing family size or some other obvious reason, the decision to move into a smaller size home that may be more convenient, easier to manage, and be more economical is a bit more difficult to make.
I talk to clients every day who are empty nesters and want to know when to downsize their home. They have raised a beautiful family in their family home and now are either single or are a couple living in a very large single-family home. They want to know when they should sell and take the leap to the next stage of their life. Every situation is different, but here are eleven items to consider:
1. Size of the lot and yard maintenance- A passion for gardening and growing flowers is common, but not everyone loves the cost, maintenance, and hassle it takes to keep a large lot looking great year after year. What’s the right balance for you?
2. Travel- In many instances when the family is grown and people have more time, there is a desire to start traveling. While the current climate has curtailed traveling plans for many in the short term, long term travel plans and destinations are still on the bucket list for many. Either to see and spend more time with family or to see the world through an amazing tour or other adventure and worrying about the lawn or the sprinklers get left on can dampen those plans. Where do you want to spend your free time?
3. Utility Bills- Larger homes typically mean larger utility bills. While the efficiency of HVAC systems (either through multiple units or zones or better systems) has increased and solar and other alternative energies can reduce costs, does it make sense to heat or cool levels and/or sections of the home that go unused most of the time?
4. Taxes- Property tax bills generally increases with bigger properties. Whether it is a larger lot or a larger home, the property tax bill will typically be higher.
5. Gathering- There can be a reluctance to sell the family home because of a desire to gather everyone at home during holidays. What some people are finding out is how often it is easier to gather at their kids' houses either because of fewer flights to purchase, ease of coordinating the day, and trying to maximize the number of people who show up. Can you rotate among the kids and all help to provide food and activities?
6. General Upkeep and Maintenance- As any homeowner knows, there is upkeep every year and things that break and fall apart. Generally speaking, 1-2% of your home purchase should be budgeted to maintenance every year so that when you have a leak, you will be able to address it without dipping into savings or your emergency fund.
7. Enjoyment Factor- If you still enjoy your home and can easily afford it and it doesn’t feel like a burden, maybe you should stay there and aren’t quite ready to downsize.
8. Preparation- To prepare for the future, it can make sense to move earlier than planned to get in a smaller, more manageable place with no stairs. If people have back or knee issues or other health concerns or potential health concerns, too many stairs can present a problem. Being forced to move because of problems with stairs can feel like adding insult to injury. Having the master bedroom on the main floor and to the extent possible – enjoy single level living is highly desirable for a significant number of buyers. See current homes with masters on the main floor here.
9. Financial- How much do you have for retirement? Does it make sense to add some proceeds to your retirement to better prepare? Where do you want to spend your money in your golden years? How do you balance the different desires of your heart? How do you balance preparation and enjoyment?
10. Emotional- It can be easy to attach life events and emotions to a home and it can be an emotional thing to sell a home that is filled with such great memories. That is hard. Memories are forever and pictures and videos can take you back in an instant. People can stay longer in a home than they otherwise would for purely emotional reasons.
11. Kids Moving Back in- There is a growing trend of having more than one generation live in the home. This may be to help a college student out to save money completing school, giving a boost to a young newlywed, to help a widowed or divorced child regroup, or aging parent, or some other reason. Often times, people will look to get a home with an accessory unit or “Mother in law” apartment for this reason. (We also know that in some instances, there is a preference to not have this type of separate living space so that having family move back in is simply not an option – we aren’t judging :) )
While these many factors are worthy of consideration, they are not an exhaustive list. It is better to be proactive about the size of your home given the stage of life you are in and what’s important to you. Life is always in flux. By prioritizing what is important to us, we can better prepare and take better care of ourselves and set a great example for others. If you are considering a move to Utah or own property in Utah, we help people buy and sell homes and property in Utah from all around the country. More and more people are relocating to Utah and investing in Utah every single year driven by retirement and by Utah having one of the lowest unemployment rates in the country. Even after the impact of coronavirus, Utah has fared better compared to many of the states across the country. (Here is a link to the latest Bureau of Labor and Statistics Report by state) If you are curious about what your home might be worth, click here for a quick and accurate home valuation Also, if you’d like to review current listings on the Utah MLS, you can do so here.