Downsizing Is A Financially Profitable Move – Find Out How Much Big City Dwellers Can Actually Save
Switching to a smaller home can potentially save you hundreds of thousands of dollars, depending on where you live, according to a recent STORAGECafe study that looked at downsizing in the country’s 20 largest metro areas by population. The study computed potential downsizing savings by taking into account the difference between the median home value of four-bedroom homes and that of two-bedroom homes in the metros analyzed. Other savings and expenses related to downsizing, including closing costs and tax savings over a period of ten years, were also considered.
Downsizing within the country’s top 20 largest metros can save homeowners between $400K in San Francisco Metro, which takes the top spot for potential savings, and $93K in Phoenix Metro.
San Francisco, San Diego and LA take the downsizing savings podium
Californian metros generate the highest amount of savings for their downsizing residents, mainly due to the high home values in the area. San Francisco Metro homeowners planning to downsize from a 4-bedroom home to a 2-bedroom home are set to save a little over $406K. Looking at just the city of San Francisco, and not the metropolitan area, savings from downsizing are even larger, at around 535K.
Moving to a smaller home is an option not only for empty-nesters and retirees, but for other types of families as well who are interested in keeping an active, big city lifestyle without being overwhelmed by housing costs. Moreover, you can compensate for the reduction of space at home by using self storage. A 10×10 self storage unit in San Francisco, for example, rents for about $270 per month, and you can use it to store a variety of belongings, including extra furniture and appliances, sports equipment, clothing, seasonal items, toys and books and so on.
The San Diego metro area ranks second among the country’s biggest 20 metros in terms of downsizing savings. Its residents have the opportunity to save a very useful sum of money by switching from a 4-bedroom home to a 2-bedroom one within the metro area – about $260K. When looking at city-to-city moving among the main cities of the metro area, the most advantageous downsize is from Carlsbad to Chula Vista, bringing in a spectacular $760K.
Los Angeles Metro takes the third spot among the best cities for downsizing – relocating from a 4-bedroom home to a 2-bedroom there provides homeowners with about $240K in savings. However, residents of LA City who choose to relocate to one of the other main cities of the metro area are set to save even more money. Swapping a 4-bedroom home in LA City for a 2-bedroom one in Anaheim will save homeowners over $420K, while downsizing to Long Beach results in average savings of almost $365K.
Seattle, Miami, and Boston residents can cash in well over $200K from downsizing
Downsizing within the Seattle metro area results in savings of around $234K. When looking at the metro’s main cities, the most profitable relocation accompanied by downsizing is from a 4-bedroom home in Bellevue to a 2-bedroom one in Tacoma, which results in over a million dollars in savings.
Residents of Miami are almost equally well-positioned for downsizing savings – homeowners relocating from a 4-bedroom home to a 2-bedroom one within the metro area have the opportunity of saving over $233K. The most profitable city-to-city downsize within the metro area is from a 4-bedroom home in the city of Miami to a 2-bedroom one in Pompano Beach, a relocation that results in almost $290K in savings.
The Boston metropolitan area ranks sixth in terms of downsizing savings – homeowners are set to save about $233K if they decide to move to a smaller home within the metro area. Other metros, including New York-Newark-Jersey City, Detroit-Warren-Dearborn and Washington-Arlington-Alexandria, also ensure downsizing savings north of $200K to homeowners.
The Philadelphia metro area ranks 10th for downsizing savings, giving homeowners a profit of around $194K when moving from a 4-bedroom home to a 2-bedroom. St. Louis, Dallas and Riverside metros all have the potential of bringing in savings of slightly under $190K for downsizing homeowners.
Phoenix and Atlanta metros register the smallest downsizing savings – but still an appreciable amount, hovering around $100K
The Chicago, Denver and Tampa metros, ranking 14th, 15th and 16th respectively for downsizing savings among the country’s top 20 largest metros, ensure profits of around $150K for homeowners willing to trade their 4-bedroom homes for 2-bedroom ones. The Houston and Minneapolis metros, on the other hand, provide slightly lower downsizing savings of $133K and $121K.
The Atlanta and Phoenix metros rank last when it comes to downsizing savings – but, even so, homeowners in these two metropolitan areas can get a significant amount of cash if they trade a 4-bedroom home for a 2-bedroom one. Residents of Metro Atlanta can save almost $110K from downsizing within the metropolitan area. Looking at city-to-city downsizing among the metro area’s main cities, homeowners living in Atlanta proper downsizing to Sandy Springs have the opportunity of gaining even more cash – over $280K. Phoenix Metro residents have the opportunity of saving around $93K from downsizing.
Downsizing can be a very sound financial decision for homeowners – from lower mortgage rates to access to cash you can use for other purposes, it can definitely improve your family’s finances. However, it’s important that you are truly comfortable with the lifestyle change before making the move.
