In order to understand why I have an understanding of downsizing, it’s important to know where I came from and where I find myself now.
As a father of three, the thought of downsizing my house was never an option and quite frankly, having a larger house always seemed to be an indication of success for both myself and my school teacher wife. That said, having a nice home to raise our three boys has always been more important to my wife then myself. In my mind, whatever home I was in was only meant to last as my domicile until I found another one to move into as I built my inventory of rentals. In 2000, which at the time of writing was (oh my) 20 years ago, I had three rental units and I only looked to buy more. Wanting to raise capital for a business that required a lot of money upfront with sales of product happening six to eight months later caused me to sell my rentals. That turned into a good thing somewhat as I avoided the real estate (and overall) downturn in values. To be clear, I live in the Northwoods of Wisconsin in a city called Eau Claire, which was somewhat isolated from the boom and following housing bust. However, I sold a house in 2004 that I saw listed for sale in 2014 for the exact same price.
Ok, so housing prices once again seem to be ripping higher, and as long as interest rates remain at historical lows (and the FED has indicated low rates are here until at least the end of 2022), I don’t think there’s a lot of downward pressure that can be predicted in the foreseeable future because even when mortgage rates do begin to climb, people will be motivated to lock in rates and buy as much as they can to avoid higher upcoming rates. In other words, housing prices (absent a seismic event/change) can reasonably be expected to continue the current trajectory for the foreseeable future. That said, most of my opinion is based on the stage of life of the homeowner, not the economic stage of the market.
I’m 52, and my oldest son is 18, with one right behind him at 16. Now my third son, at age 11 does change the dynamics a bit compared to many of my friends, but not by as much as you may image. After all, my wife and I are looking to buy a single-story home for our final lap around the track and single-story homes can easily have three or more bedrooms. To put in context, we currently have a five bedroom, albeit one bedroom is in the basement and has turned into little more than an interior “storage shed,” and really doesn’t count, so consider my home a four bedroom. Again, not that it changes things that much, but what is important is when we first moved in, the basement was where the family would go for movie watching and “hanging out.”
We have lived here 10 years and my two oldest sons have TVs in their rooms (still regretting that idea), so we don’t spend much any time together to speak of in the basement. The adding of a large TV on the main floor above the fireplace has effectively rendered the basement off limits to my wife as she doesn’t want to go “into the darkness” any longer.
It’s not just about going down into the darkness, with a two-story house, if you actively use the basement level, it’s a total of three-stories effectively. While I can use the exercise, it’s increasingly becoming impractical other than a trip to get a can of soda when my 11 year old “gopher” isn’t within earshot of having him do it for me.
As my sons leave the nest, the basement level will increasingly become a waste of space because it’s completely finished other than the furnace area which is too small to do anything in that people might otherwise use the basement for (projects etc..).
If you’re like me, you may have better uses for all the equity built up in the home, not to mention the high property taxes levied in Eau Claire Wisconsin. This makes the idea of finding a single-story home even more attractive if we can find a house with effective living space at a much lower cost. While most people don’t want to opt to turn the larger home into a rental, that’s my plan here. It’s a subject for another article and beyond the scope of this one, so I’ll focus on the idea of listing my current larger home for sale, and moving to a single-story home that may not actually feel smaller when you factor in we’re not really using the finished basement anyway.
This isn’t a new idea, when looking at a recent US Census Bureau’s Survey of Construction, when was tabulated by the NAHB, we find that the share of homes with two or more stories as a share of new homes fell (slightly) from 53% to 52% over the period of 2018 to 2019, pushing single-story homes higher from 47% up to 48% of the market share.
Other benefits besides property taxes include lower utility bills. All else being equal, a single-story house costs less to heat in the cold Wisconsin winters, and significantly less to cool in the heat of the summer. With less outside surface exposure, it’s natural for the gas and electric costs to decline. For people on a fixed income, or about to transition to a fixed income, these costs savings along can make the difference in the quality of life. This comes from two places, first as mentioned, the utility bill directly, albeit also, the furnace and air conditioning units are generally smaller, or as many two-story homes have, you can go from two units down to one furnace and/or air conditioner.
Moreover, a single-story home is much easier to maintain. While I’ve been on my roof of a previous one-story home (including once to watch the 4th of July fireworks), I have yet to be on the roof of my two-story home and I have no intention of ever climbing up there. Even our holiday lighting is different because of this factor.
The primary motivation is elimination of stairs of course. Not having stairs, especially as I get older could mean a much better quality of home living. Again, at age 52 I’m not having trouble transitioning from the main level to the upper level, and as much as I don’t want to get older, the mirror is a reminder each day that the clock doesn’t stop for anyone. I guess I could consider removing the mirrors, but that will only impact my reminder, not the reality itself.
Lastly, single-story homes generally have good resale value regardless of the economic cycle and the reasoning is easy to understand. With one story, the market willing to buy the home is much larger because you get both ends of the spectrum. You have the first-time home buyers, and you also get those who simply don’t want stairs to deal with for whatever reason.
If you’re thinking about a transition yourself, especially the many benefits to downsizing, give myself or an agent at 1 Reason Realty a call or email and we can discuss what your options are and what type of house is right for you.