Retirees who live on a tight budget can find plenty of room for financial breathing if they are willing to downsize. And in some cities, they can put hundreds of thousands of dollars in their pockets.
In fact, retirees and others living in the California metropolitan area that includes San Francisco, Oakland and Berkeley can save a whopping $406,600 simply by downsizing from a four-bedroom home to a two-bedroom home, according to numbers-crunching by StorageCafe, a space marketplace. Storage nationwide. And within a given city, they can save upwards of $535,000.
In addition to the savings they can collect from selling a more expensive home and buying a smaller, cheaper condo, miniatures can also save on property taxes (which StorageCafe calculates for 10 years) and on both the buying and selling costs of closing each property.
A StorageCafe analysis for the San Francisco area clearly shows how much moving from a larger home to a smaller home can save the average homeowner:
A 4-bedroom in metro San Francisco is worth nearly $1.6 million, while a two-bedroom home is worth about $1 million, resulting in a difference of about $530,000. The property tax difference between the two types of home is more than $28,000 for 10 years.
While closing costs lower savings a bit, downsizing homeowners in this area can still save more than $400,000. The savings are also greater within San Francisco itself, coming in at a minimum of $535,000.
Savings can grow into a king’s ransom if you’re willing to be more adventurous: Go from San Francisco to neighboring Oakland and you could save nearly $1.2 million.
For its analysis, StorageCafe looked at the 20 most populous US metro areas in order to better understand how much money downsizing could save.
Here are 10 areas where downsizing from a four-bedroom home to a two-bedroom home will save you the most in terms of home value, property taxes, and closing costs:
- San Francisco-Oakland-Berkeley, CA: $406,600
- San Diego – Chula Vista – Carlsbad, CA: $264,700
- Los Angeles – Long Beach – Anaheim, CA: $239,800
- Seattle Tacoma Bellevue, Washington: $234,500
- Miami-Fort Lauderdale-Pompano Beach, Florida: $233,700
- Boston – Cambridge – Newton, MA: $232,900
- New York – Newark – Jersey City, New York – New Jersey – Pennsylvania: $215,400
- Detroit Warren Dearborn, MI: $209,800
- Washington-Arlington-Alexandria, DC-VA-MD-WV: $209,600
- Philadelphia Camden Wilmington, PA-NJ-DE-MD: $194,000
StorageCafe notes that downsizing can have significant benefits, particularly for empty retirees, retirees, and those who don’t need a lot of space at this point in their lives.
Unfortunately, many homeowners of all ages are too afraid to buy a home now. To learn more about why, check out “10 Things That Keep People From Buying a Home Today.”
If you’re among the bravest souls ready to find new digs, stop by Money Talks News Solution Center and find a great mortgage rate.
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