Property values continue to rise and those looking to downsize can make the most of the current market highs, but how much you can save by downsizing can vary significantly depending on where you live. A new StorageCafe study found homeowners in the 20 largest U.S. metros could save $194,000 when downsizing from a four-bedroom to a two-bedroom home. In some markets that savings is even higher.
StorageCafe’s methodology looked at the difference between the value of a four-bedroom home versus a two-bedroom home in each metro. The study took into account property taxes over 10 years, as well as closing costs for selling and buying both properties. California led the list with San Francisco, San Diego and Los Angeles taking the first three spots on the list for large downsizing savings at $406,000, $264,700 and $239,800, respectively.
What type of savings are downsizers seeing in the Boston area? Boston-Cambridge-Newton ranked sixth on the list for savings. There’s only a 40% difference between a $455,000 two-bedroom home and more than $730,000 for a four-bedroom home, resulting in a $233,000 downsizing savings across the area, according to the report. However, Bay Staters looking to downsize from a four-bedroom home in Newton to a two-bedroom home in Boston could see savings of $690,000. Downsizing from Newton to another smaller city, like Cambridge, could save $500,000. The report notes that home prices in Newton and Cambridge are higher than those in Boston, so homeowners looking to downsize to Cambridge may have to spend an extra $184,000, and those downsizing to Newton could have to pay approximately $50,000 to downsize there.