starting to think downsizing to a townhouse not worth it

[Anonymous]

We're empty nesters in a $1.2M home in a NYC commuter burb. We started looking at townhouses in the area to avoid having to keep doing lawn care and exterior maintenance, and to hopefully pocket half a million or so.

Sadly, it's become apparent that "downsizing" is not much of a deal. An 800K townhouse might have only two bedrooms and a one-car garage. For three bedrooms and a two-car garage, you're going to lay out close to a million. The taxes are slightly lower than for a single-family home, but add in the HOA costs and you're not saving anything.

To really put $$$ in our pocket after the sale of our home we'd have to find something for 700K or less, and there just aren't very many really nice townhouses in that price range with easy access to the city. I see now why my lovely neighborhood in a top school district is filled with empty nesters and even grandparents still occupying their large, single-family homes. Anyone else noticing this?

[Anonymous]

Anonymous wrote:We're empty nesters in a $1.2M home in a NYC commuter burb. We started looking at townhouses in the area to avoid having to keep doing lawn care and exterior maintenance, and to hopefully pocket half a million or so.

Sadly, it's become apparent that "downsizing" is not much of a deal. An 800K townhouse might have only two bedrooms and a one-car garage. For three bedrooms and a two-car garage, you're going to lay out close to a million. The taxes are slightly lower than for a single-family home, but add in the HOA costs and you're not saving anything.

To really put $$$ in our pocket after the sale of our home we'd have to find something for 700K or less, and there just aren't very many really nice townhouses in that price range with easy access to the city. I see now why my lovely neighborhood in a top school district is filled with empty nesters and even grandparents still occupying their large, single-family homes. Anyone else noticing this?

A 3bd townhouse with a 2-car garage really isn’t much of a downsizing from a SFH. In the NYC area, you’d be better off finding a 55+ community that exempts you from local school taxes to save some money.

[Anonymous]

I never ever got the appeal of a townhouse. You may as well get a condo.

[Anonymous]

Yep. My parents have done the math many times. The costs of buying and selling is so high in the first place and then factor in that even smaller houses in their preferred areas are still expensive enough, they aren't going to save much money, if any, from downsizing. My father even once calculated due to selling/buying and moving costs, it would take a decade to break even. And in their market, their taxes would go up due to buying anew. So they're staying put in their large SFH.

[Anonymous]

OP again. Yes, it's crazy. And it's keeping out young families who could really benefit from our spacious homes. Of course, with complaints about school crowding, maybe this is a blessing. But I feel for millennials right now.

[Anonymous]

Is it possible you're underestimating the value of your home? Or are you thinking of moving to a much more expensive location? I'm in the DC/Baltimore area (Anne Arundel County, MD), in a house also roughly worth $1.2M (new construction 5 yrs ago, about 4000 sq ft). There are a lot of townhouses in the $400-700k range near me. Even if I look in more upscale areas (downtown Annapolis, near the water, newer townhomes) there are still options around $700k. Yes, I can find townhomes up to $2M or more, but these are either waterfront or the renovated historic rowhomes. Most of these townhomes are 1400-2000 sq ft, so half of less the size of our current home, but have at least 3BR/2BA. Would you have an option to stay in your current area but in a smaller home? There are older (1960s era) ranch homes in my neighborhood around 2000 sq ft that would sell in the $600-800k. There's enough of an upside to a smaller home in our neighborhood that we'd consider that move. Even with renovations we could likely downsize and pocket about $300-400k.

[Anonymous]

OP again. Yes, it's crazy. And it's keeping out young families who could really benefit from our spacious homes. Of course, with complaints about school crowding, maybe this is a blessing. But I feel for millennials right now.

Don't feel badly. Eventually people die or go to assisted care. Several houses have come up in our neighborhood for these reasons. I think a lot of older folks make the calculation that you made and realize that their next move will be one that is out of necessity (because the financials just don't work). "Downsizing was not a thing in my grandparents' day. I think it only came up as a "thing" in the last 25 years or so. My grandmother's house did not go on the market until after she died. Nobody judged her for that. But people do judge the boomers for doing the same thing. In fact I know someone who would like to downsize, but just plain can't find a smaller home in their area (because there aren't many that were built). She has given up.

[Anonymous]

Anonymous wrote:Yep. My parents have done the math many times. The costs of buying and selling is so high in the first place and then factor in that even smaller houses in their preferred areas are still expensive enough, they aren't going to save much money, if any, from downsizing. My father even once calculated due to selling/buying and moving costs, it would take a decade to break even. And in their market, their taxes would go up due to buying anew. So they're staying put in their large SFH.

I agree with this even though I'm the PP who mentioned we might downsize to a smaller ranch home in our current community. I only think the move would make sense if we could completely pay off our mortgage by downsizing, including the cost of renovation. But if you're in a paid off house you've been in for 10+ years I agree just the difference in property taxes alone could be enough to make the move not worth it. If you'd need a mortgage in the new home that's also a nonstarter.

[Anonymous]

I’m not sure why you assume that townhouses would automatically have that much of a price discount, just because they’re townhouses. With everything else equal (location, build quality, square footage, number of beds and baths, etc), the price of a townhouse will generally be somewhat less than a single family house, but not by extreme amounts. And why should it be too much less? Young couples can raise their kids in townhouses too.

If you want a major price discount, you’re going to have to trade off something substantial - location, square footage, # of bedrooms….

[Anonymous]

Anonymous wrote:I’m not sure why you assume that townhouses would automatically have that much of a price discount, just because they’re townhouses. With everything else equal (location, build quality, square footage, number of beds and baths, etc), the price of a townhouse will generally be somewhat less than a single family house, but not by extreme amounts. And why should it be too much less? Young couples can raise their kids in townhouses too.

If you want a major price discount, you’re going to have to trade off something substantial - location, square footage, # of bedrooms….

This! Getting a townhouse with a two-car garage is not downsizing!

[Anonymous]

Anonymous wrote:I’m not sure why you assume that townhouses would automatically have that much of a price discount, just because they’re townhouses. With everything else equal (location, build quality, square footage, number of beds and baths, etc), the price of a townhouse will generally be somewhat less than a single family house, but not by extreme amounts. And why should it be too much less? Young couples can raise their kids in townhouses too.

If you want a major price discount, you’re going to have to trade off something substantial - location, square footage, # of bedrooms….

+1. Boomers don't really want to downsize. That is the reality. Just own it. I'm genx and have no plans to downsize either.

[Anonymous]

I assume there’s a big difference between a townhouse in a NYC suburb and a brownstone in Brooklyn or a rowhome in DC? A townhouse in the ‘burbs sounds awful to be.

[Anonymous]

Anonymous wrote:We're empty nesters in a $1.2M home in a NYC commuter burb. We started looking at townhouses in the area to avoid having to keep doing lawn care and exterior maintenance, and to hopefully pocket half a million or so.

Sadly, it's become apparent that "downsizing" is not much of a deal. An 800K townhouse might have only two bedrooms and a one-car garage. For three bedrooms and a two-car garage, you're going to lay out close to a million. The taxes are slightly lower than for a single-family home, but add in the HOA costs and you're not saving anything.

To really put $$$ in our pocket after the sale of our home we'd have to find something for 700K or less, and there just aren't very many really nice townhouses in that price range with easy access to the city. I see now why my lovely neighborhood in a top school district is filled with empty nesters and even grandparents still occupying their large, single-family homes. Anyone else noticing this?

Yes. Seeing this in our no name brand inexpensive DMV suburb. We also bought our new SFH 26 years ago at the bottom of the market and at the lowest rate possible. Now, it costs more to downsize and move to a semi-decent place. So we are staying put. We may put a tube elevator somewhere Or convert our formal living and dining room into a bedroom and full bathroom. We have a huge basement and 4 bedrooms and 2 full bathroom upstairs - and I am assuming that we will not be able to use it at some point.

Every single large house with empty nester grandparents is seeing the adult children and grandchildren returning for childcare needs or for multi-generational living.

[Anonymous]

Not sure about your age but consider also that townhomes have tons of stairs and that can become a problem later in life

[Anonymous]

Anonymous wrote:Not sure about your age but consider also that townhomes have tons of stairs and that can become a problem later in life

Came on to say this. Townhouses are too vertical and you’re not getting any younger. Unless you’re looking at townhomes with elevators.