Posted on: Friday, December 24, 2004
Homeowners make do with less
By William Sluis
Chicago Tribune
CHICAGO — Bring up the subject of downsizing and some homeowners break into a cold sweat.
Make do with 1,000 square feet of indoor space, instead of 4,000 or more? It seems impossible.
For some owners of a single-family home, the move to a condo or townhouse, where in addition to having less room they will answer to members of an association, can be traumatic.
Yet many are making such a move. A recent study found more than half of all housing going up in the Chicago area consisted of condos and townhouses.
Housing consultant Steve Hovany says there are something like 130 developments in the Chicago area catering to buyers who are aged 55 or older, and the number keeps growing. Many of the buyers are downsizing.
"It is an example where demographics rules for the construction industry," said Hovany, of Strategy Planning Associates, in Schaumburg, Ill. "The number of empty-nesters and active adults continues to grow."
He said the industry has been following the Baby Boom generation for 40 years, and there are no signs the trend will end anytime soon.
When married or single empty-nesters downsize, they find all their furniture, appliances, pots and pans and clothing cannot be squeezed into the new space. And the choices can be agonizing.
What happens to family keepsakes? Is it worth rehabilitating that old sofa and taking it to new digs? Should a set of cherished golf clubs be taken to a fresh location or should they be given to a grandchild?
Economist Gopal Ahluwalia of the National Association of Home Builders says while some older buyers are downsizing, it is not a wholesale trend.
"Over the last two or three years, the size of the average new home has held steady, at 2,320 square feet," says Ahluwalia. "We don't expect the size of new homes to decline any time soon."
Instead of seeking more and more space, however, he says many buyers are opting for higher quality features, such as hardwood floors, higher ceilings and fireplaces.
Experts say some downsizers find it worthwhile to pay for a modest amount of off-site storage space for items infrequently used such as holiday decorations, legal papers and large suitcases.
Just as difficult as deciding where to move can be finding space for two or more cars, which are a mainstay in most suburban driveways. Yet buying a parking space at a downtown condominium building may cost up to $30,000. Renting a space may cost between $150 and $200 a month.
While moving to a smaller space may pose a dilemma for many homeowners, the trend is not going away. Baby Boomers, the generation born between 1946 and 1964, number about 77 million, the largest demographic group ever.
Many in the group are growing weary of having a large house and realize, as they age, they no longer need the playroom and extra bedrooms, Hovany says.
"They want to keep the rooms that they actually use, and they realize that it takes a lot of time and effort to maintain a large house," he said.
Economist Sung Won Sohn said, as people age, they may want the best of both worlds when it comes to housing. Some buy a second home, and keep the one they have.
Because the market for second homes is so powerful, he said, another construction boom may lie ahead.
"Downsizing is not hurting the housing market," Sohn said. "As long as people want every luxury, construction activity will continue to roll."
A survey by home builder Del Webb, conducted in April and May, showed 36 percent of Baby Boomers will move to a new home once their children move out.
Another 26 percent are considering purchasing a home in an active-adult community, which may require one resident to be older than 55 and does not allow anyone younger than 19 to live there.
The survey polled 1,174 residents age 40 to 70. Perhaps surprisingly, it found 24 percent of them expect their parents or in-laws to move in with them eventually. Further, 25 percent said they expect their grown children to move back home.
