Best US Metros For Downsizing: San Jose And San Francisco Residents Stand To Cash In The Most From Switching To Smaller Living

• Homeowners across the country can save around $196K through downsizing from a 4-bedroom to a 2-bedroom home
• The San Jose metro area takes the first spot, ensuring downsizing savings of $778K, followed by San Francisco and Urban Honolulu
• The lowest amount of downsizing savings can be found in the Rochester metro area – roughly an eighth the amount that can be gained in San Jose

Downsizing can be a smart move for a variety of reasons, from wanting to reduce carbon footprints to seeking smaller bills and reducing time and effort spent on housing chores. But more than that, switching to a smaller home can give a big boost to your bank balance, allowing for various investments and travel or helping swell your retirement savings account.

Naturally, there are many factors that might affect the proceeds resulting from downsizing, including the condition of the new home and how much improvement it needs, relocation costs, and the decision about whether to continue owning or to rent. There are also HOA fees if you’re switching to condo living, as well as any capital gains tax that might be incurred from the sale.

But essentially, how much homeowners can really save from downsizing depends on location, as it dictates much of a home’s value. To determine where people can save the most, we analyzed the country’s largest 100 metros, taking into account the price difference between a 4-bedroom home and a 2-bedroom one (a classic move for empty-nesters), property tax savings over a 10-year period, as well as selling and buying closing costs for both houses. According to our study, homeowners stand to potentially gain around $196K on average from downsizing across the US, with some huge differences when zooming in on specific locations.

Downsizing may in fact create an opportunity to find financial respite even in California’s red-hot residential market, with San Jose and San Francisco giving way to the biggest savings when embracing smaller living. Honolulu, Hawaii, joins the exclusive club of cities where downsizing results in savings north of $500K.

Californian gold rush: here’s where you can cash in the most from downsizing in the Golden State

California makes it extremely profitable for homeowners to move to smaller residences, with six of the top 20 metros that offer big savings through downsizing being in the Golden State. Although the real estate market in California is starting to cool off, akin to the rest of the country, home prices remain high, which translates into impressive savings when trading a 4-bedroom for a 2-bedroom.

The San Jose-Sunnyvale-Santa Clara metro area ranks first nationally for downsizing savings – moving within the metro area from a 4-bedroom residence to a 2-bedroom home can amount to average savings of almost $778K.

Residents of San Jose itself who value big city life and the social interaction it entails can still pocket a tidy sum if they trade their 4-bedroom home for a 2-bedroom one in the city. Savings can reach $663K on average, giving San Joseans a welcome break from the high costs associated with living in the Capital of Silicon Valley.

Leaving the suburbs and heading to the city can give you even better chances of swelling your bank balance. Switching from a 4-bedroom home in Sunnyvale to a 2-bedroom in San Jose can result in savings of around $1.6M.

Downsizing is not without its pitfalls. One compromise that homeowners have to deal with is having less space at home. But the self storage sector is well developed in San Jose and can easily help address people’s storage needs. Compared to residential prices, costs for self storage are much lower, with the monthly rent of a 10’x10’ storage unit in San Jose hovering around $177, much on a par with self storage in Santa Clara. Storage units in Sunnyvale call for $207 per month.

The second-most profitable downsizing location in California, and across the nation, is the San Francisco-Oakland-Berkeley metro area. Much like San Jose, the Bay Area packs a serious punch when it comes to downsizing savings potential, with a move from a 4-bedroom home to a 2-bedroom residence generating savings of approx. $563K. Settling for less square footage in the city of San Francisco proper can save nearly $642K for those who don’t mind having less room. To make up for the lost space, you can rent a 10’x10' storage unit in San Francisco that can easily accommodate the contents of two compact bedrooms.

Zooming in on popular relocation routes in the area, downsizing from San Francisco to Fremont – a good option for those in search of a slower pace of life – has the potential to save homebuyers a whopping $1.4M.

San Diego-Chula Vista-Carlsbad also makes it to the top of the list, ranking fifth in terms of potential downsizing savings. Homeowners who decide to trade their 4-bedroom home for a 2-bedroom one will save over $340K in the metropolitan area overall. Leaving the main city of the metro, San Diego, for a smaller home in a less hectic location like Oceanside gets homeowners sizable savings of $660K on average. With its iconic wooden pier, picturesque beaches, and intense foodie scene, Oceanside is a great option for those who don’t want to give up the costal lifestyle but still seek more affordable settings.

Homeowners who love living in the city of San Diego proper, and are less inclined to enjoy a daily commute, can also save almost $455K if they trade their 4-bedroom for a 2-bedroom home.

Los Angeles-Long Beach-Anaheim was surpassed by the San Diego metro area in terms of downsizing savings potential, but only by a meager $9,000: homeowners in the LA metro area can enjoy about $331K in profits if they decide they can make do in a smaller home. Downsizing from the city of Los Angeles proper to Anaheim or Long Beach can line homeowners’ pockets with $480K and $452K, respectively. Those moving from a 4-bedroom home in Anaheim to a smaller, 2-bedroom one in the city of Los Angeles will save a comparatively much smaller sum, $65K.

Downsizing within the city of LA is a smart financial move for homeowners who wouldn’t switch the City of Angels vibe for any other. Giving up a 4-bedroom for a smaller house can translate into savings of roughly $300K for downsizing Angelenos.

Honolulu joins CA in providing big savings, landing third place for downsizing gains

The Urban Honolulu metro area is not only an amazing place to live for outdoor attractions but also in terms of potential downsizing savings – homeowners who choose to live smaller can save around $519K, looking at the metro area overall. Those who prefer to move to smaller quarters but remain in the city of Honolulu are even luckier as they stand to save over $723K.

Moving from a 4-bedroom home in Honolulu to a 2-bedroom one in Pearl City – which is very popular with both young families and retirees, due to its peaceful, suburban vibe – brings in the highest city-to-city savings, at $895K. However, those who trade a larger home in Waipahu for a smaller one located in Honolulu itself can only expect to save $276K.

The East Coast leads with Bridgeport, while three other metros in the area ensure sizable downsizing profits

Four East Coast metros land positions among the top 20 nationally for downsizing savings, with Bridgeport-Stamford-Norwalk the best placed, on the fourth spot. Homeowners in the Bridgeport metro area can save over $463K if they sell a 4-bedroom home and purchase a 2-bedroom one instead. Downsizing in the city of Bridgeport can also bring homeowners a little over $100K. Relocating from a large home in Stamford to a smaller one in Bridgeport is the most profitable downsizing route between the major cities in the metro area, resulting in average savings of roughly $603K.

The Boston and New York metro areas can also provide homebuyers with great options to save while downsizing. Across the Boston area, profits may amount to $275K whereas New York-Newark-Jersey City ensures potential downsizing savings of $248K.

Looking at city-to-city relocations within the same metro area that also involve downsizing, New York City to Newark, NJ, comes with the highest potential gains – over half a million dollars.

How much can you expect to save by downsizing within New York City's neighborhoods?

With the priciest real estate in the nation, Manhattanites are some of the most likely to profit from downsizing even if they don’t want to leave the buzz of the Big Apple. Midtown, for instance, can bring in a whopping $5.8M of savings for homeowners who switch from a 4-bedroom home to a 2-bedroom home within the neighborhood.

The Flatiron District allows homebuyers to potentially gain $4M if they’re willing to sacrifice half of their living space. Similarly, average proceeds of $3.95M can be realized in Greenwich Village if you adopt a smaller-living lifestyle there.

Brooklyn Heights ensures the highest potential downsizing savings among all Brooklyn’s neighborhoods, at $2.3M. As for Queens residents, those who live in Forest Hills and want to downsize within the same neighborhood stand to gain over $1M. Those living in Riverdale are better located for downsizing than other residents of the Bronx and could gain $770K by sacrificing two bedrooms. The most profitable neighborhood for downsizing in Staten Island, on the other hand, is Tottenville – trading a 4-bedroom home for a 2-bedroom one here can potentially save around $543K.

Belleview to Tacoma among the most profitable downsizing moves in the Seattle metro area

Also on the West Coast, Seattle-Chula Vista-Carlsbad, is bound to ensure sizable savings for homeowners who are ready to trade their existing 4-bedroom homes for smaller 2-bedroom ones within the metro area: around $300K, helping it rank 8^th in the national ranking. Downsizing within the limits of the city of Seattle proper is even more advantageous, saving homeowners around $383K.

When it comes to relocating to a different major city within the metro area, the Belleview to Tacoma downsize takes the prize, with potential savings of around $1.36M. Belleview residents interested in downsizing within the city limits can also save a very impressive $1M.

Several Southern US metros, from Miami to Knoxville, have strong downsizing savings potential

The best-placed Southern metros in the ranking are in Florida: Miami-Fort Lauderdale-Pompano Beach on 7^th and North Port-Sarasota-Bradenton on 9^th places. For the Miami metro area, the overall downsizing savings homeowners can potentially pocket hover around $322K. Homeowners in the city of Miami proper can save about $218K by downsizing locally.

Downsizing between two specific cities of the metro area, on the other hand, can bring homeowners significantly more. Those willing to relocate from Fort Lauderdale to a smaller home in Miami can reap serious financial benefits: $570K. Downsizing from Fort Lauderdale to Hialeah results in even higher average savings of around $820K.

Dallas-Fort Worth-Arlington is the only Texan metro that makes it to top 20 nationally, with around $245K in potential downsizing savings. Those who don’t feel inclined to leave the city of Dallas proper stand to gain even more: approx. $360K if they swap a 4-bedroom home for a 2-bedroom one.

Two of the most popular moving routes within the metro area, Dallas to Arlington and Dallas to Fort Worth, are also very profitable for homeowners interested in relocating not only to a smaller city, but to a smaller home as well, with savings hovering just south of $420K.

Knoxville, TN, rounds out the top 20 best metro areas for downsizing savings, with potential profits of over $241K. Knoxville to Oak Ridge is the most lucrative downsizing route between the metro area's major cities, generating an average of $271K in savings. Residents of the city of Knoxville could end up with $238K in savings if they sell their 4-bedroom home and get a 2-bedroom one in the same location.

Rochester leads the pack of metros where you might as well keep living large

At the other end of the spectrum, Rochester, NY, is the metro area that offers the least amount of downsizing savings to homeowners. The price difference between a 4-bedroom home and a 2-bedroom residence in the Rochester metro area is the lowest among the country’s top 100 largest metros, resulting in less spectacular savings from downsizing – roughly $98K. Downsizing within the city of Rochester proper is a bit more profitable, generating savings of around $114K.

Ogden-Clearfield, Utah, and Tucson, Arizona, follow the same path, with downsizing savings at a low $99K within their respective metro areas.

Making do with less living space: Boise and Oklahoma City lead the country for the most storage options away from home

Downsizing is the third-most popular reason why Americans use self storage, and luckily the industry can easily respond to the need for space away from home. The self storage sector has increased significantly over the last decade so as to provide convenient options to anyone looking to hold on to important belongings while maximizing space at home. Currently, the 100 largest metro areas in the US offer almost 1.4 billion square feet of self storage space, according to Yardi Matrix.

Naturally, supply may vary from metro to metro, with some benefiting from more self storage space per capita than others. The Boise City metro area, in Idaho, ranks first in terms of self storage supply, with 14.3 square feet of space per capita, followed by Oklahoma City and Ogden-Clearfield, both with almost 11 square feet of self storage space per person. The service is affordable, with a standard 10x10 storage unit currently renting for $132 per month.

The US Metros with the Most and Least Self Storage Options Per Person

Rank	Metro Area	Self Storage per Capita (sq. ft.)	Self Storage Street Rate *
1	Boise City, ID	14.3	$108
2	Oklahoma City, OK	10.9	$80
3	Ogden-Clearfield, UT	10.8	$100
4	Tulsa, OK	10.4	$80
5	Houston-The Woodlands-Sugar Land, TX	10.1	$100
6	Spokane-Spokane Valley, WA	10	$116
7	Colorado Springs, CO	9.8	$120
8	Palm Bay-Melbourne-Titusville, FL	9.7	$123
9	Dallas-Fort Worth-Arlington, TX	9.7	$108
10	Little Rock-North Little Rock-Conway, AR	9.5	$79
11	Austin-Round Rock-Georgetown, TX	9.4	$115
12	Provo-Orem, UT	9.4	$98
13	Cape Coral-Fort Myers, FL	9.2	$128
14	Charleston-North Charleston, SC	9.1	$109
15	Virginia Beach-Norfolk-Newport News, VA-NC	9	$114
16	Jacksonville, FL	9	$124
17	Las Vegas-Henderson-Paradise, NV	8.7	$133
18	Baton Rouge, LA	8.6	$96
19	North Port-Sarasota-Bradenton, FL	8.6	$142
20	San Antonio-New Braunfels, TX	8.5	$113
21	Augusta-Richmond County, GA-SC	8.4	$96
22	Sacramento-Roseville-Folsom, CA	8.4	$147
23	Raleigh-Cary, NC	8.1	$101
24	Orlando-Kissimmee-Sanford, FL	8	$118
25	Salt Lake City, UT	7.9	$115
26	Memphis, TN-MS-AR	7.9	$101
27	Greenville-Anderson, SC	7.9	$82
28	Deltona-Daytona Beach-Ormond Beach, FL	7.8	$132
29	New Orleans-Metairie, LA	7.8	$131
30	Albuquerque, NM	7.8	$105
31	Omaha-Council Bluffs, NE-IA	7.7	$89
32	Bakersfield, CA	7.6	$95
33	Indianapolis-Carmel-Anderson, IN	7.6	$95
34	Charlotte-Concord-Gastonia, NC-SC	7.6	$101
35	Phoenix-Mesa-Chandler, AZ	7.5	$128
36	Tampa-St. Petersburg-Clearwater, FL	7.5	$130
37	Jackson, MS	7.5	$93
38	Riverside-San Bernardino-Ontario, CA	7.4	$142
39	Richmond, VA	7.3	$112
40	Nashville-Davidson--Murfreesboro--Franklin, TN	7.2	$115
41	Stockton, CA	7.2	$137
42	Chattanooga, TN-GA	7.2	$93
43	Columbia, SC	7.1	$101
44	Lakeland-Winter Haven, FL	7	$109
45	Durham-Chapel Hill, NC	7	$108
46	Louisville/Jefferson County, KY-IN	7	$95
47	Kansas City, MO-KS	7	$101
48	Denver-Aurora-Lakewood, CO	6.9	$136
49	Oxnard-Thousand Oaks-Ventura, CA	6.9	$197
50	Atlanta-Sandy Springs-Alpharetta, GA	6.9	$118
51	Fresno, CA	6.8	$117
52	Birmingham-Hoover, AL	6.8	$103
53	Tucson, AZ	6.7	$124
54	Portland-Vancouver-Hillsboro, OR-WA	6.7	$147
55	Miami-Fort Lauderdale-Pompano Beach, FL	6.6	$175
56	Dayton-Kettering, OH	6.6	$92
57	Seattle-Tacoma-Bellevue, WA	6.6	$170
58	Milwaukee-Waukesha, WI	6.6	$97
59	Des Moines-West Des Moines, IA	6.4	$88
60	Greensboro-High Point, NC	6.4	$97
61	Knoxville, TN	6.3	$108
62	Wichita, KS	6.1	$87
63	Columbus, OH	5.9	$100
64	San Diego-Chula Vista-Carlsbad, CA	5.7	$185
65	Minneapolis-St. Paul-Bloomington, MN-WI	5.6	$114
66	Albany-Schenectady-Troy, NY	5.6	$116
67	Cincinnati, OH-KY-IN	5.4	$100
68	Baltimore-Columbia-Towson, MD	5.4	$142
69	El Paso, TX	5.4	$100
70	St. Louis, MO-IL	5.3	$100
71	Akron, OH	5.2	$95
72	Grand Rapids-Kentwood, MI	5.2	$97
73	San Jose-Sunnyvale-Santa Clara, CA	5.2	$189
74	Chicago-Naperville-Elgin, IL-IN-WI	5.1	$123
75	Madison, WI	5.1	$97
76	Toledo, OH	5.1	$85
77	Winston-Salem, NC	5	$98
78	San Francisco-Oakland-Berkeley, CA	5	$222
79	Detroit-Warren-Dearborn, MI	4.9	$123
80	Washington-Arlington-Alexandria, DC-VA-MD-WV	4.9	$158
81	Pittsburgh, PA	4.9	$119
82	Los Angeles-Long Beach-Anaheim, CA	4.7	$213
83	New Haven-Milford, CT	4.6	$142
84	Hartford-East Hartford-Middletown, CT	4.5	$120
85	McAllen-Edinburg-Mission, TX	4.5	$85
86	Cleveland-Elyria, OH	4.4	$115
87	Syracuse, NY	4.4	$119
88	Boston-Cambridge-Newton, MA-NH	4.4	$164
89	Harrisburg-Carlisle, PA	4.3	$121
90	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	4.3	$147
91	Bridgeport-Stamford-Norwalk, CT	4.2	$174
92	Worcester, MA-CT	4.2	$132
93	Providence-Warwick, RI-MA	4	$149
94	Rochester, NY	3.8	$115
95	Allentown-Bethlehem-Easton, PA-NJ	3.8	$127
96	Buffalo-Cheektowaga, NY	3.7	$118
97	New York-Newark-Jersey City, NY-NJ-PA	3.5	$201
98	Springfield, MA	3.3	$134
99	Scranton--Wilkes-Barre, PA	2.5	$104
100	Urban Honolulu, HI	2.5	$274

* Non-climate-controlled 10'x10' units
Source: StorageCafe analysis of Yardi Matrix data

Downsizing can be a useful tool for homeowners willing to make a lifestyle change – moving to a smaller home is an adjustment, but the financial benefits are often well worth it. Common household concerns, such as upkeep and utility costs, are easier to manage in a smaller home as well.

With housing costs still high in many of the country’s major urban areas, and disposable income becoming an issue for many American families, downsizing has the potential to help homeowners achieve their goals, be they financial or personal ones.

Check out the full dataset detailing how much savings you can expect in the 100 largest US metropolitan areas in the US in the graphic below.

Expert opinion

Arthur C. Nelson, Professor Emeritus of Urban Planning & Real Estate Development, University of Arizona

Have you noticed any migration trends associated with downsizing?

I don't really track those data as much as I should but my general sense is that households wanting to downsize are competing with households wanting to buy their first home. Those households tend to be older and with higher incomes, and down payments, than first time buyers of the same age in the 2000s.

Methodology

This analysis was done by StorageCafe, an online platform that provides storage unit listings across the nation.

We looked at the country’s top 100 largest metropolitan areas by population and ranked them based on potential downsizing savings resulting from moving from a 4-bedroom home to a 2-bedroom home.

For this research we used the Zillow Home Value Index, a smoothed, seasonally adjusted measure of the typical home value and market changes across a given region and housing type.

We calculated the home value difference between a 4-bedroom home and a 2-bedroom home for the country's top 100 metropolitan areas, at metro, city and ZIP Code level.

The median taxes for 4-bedroom homes are calculated by multiplying the median taxes across all properties by the ratio of 4-bedroom home values to all home values.

The median taxes for 2-bedroom homes are calculated by multiplying the median taxes across all properties by the ratio of 2-bedroom home values to all home values.

Tax savings per 10 years were calculated as the difference between median taxes for a 4-bedroom home minus median taxes for a 2-bedroom home, multiplied by 10.

Closing costs were calculated as 8% of the average home value for a 4-bedroom home (selling costs) and 3% of the average home value for a 2-bedroom home (buying costs).

Downsizing savings represent the home value difference between a 4-bedroom home and a 2-bedroom home plus tax savings per 10 years, minus the closing costs.

Fair use and distribution

This study serves as a resource for the general public on issues of common interest and should not be regarded as investment advice. The data is true to the best of our knowledge but may change if amendments to it are made. We agree to the distribution of this content but we do require a mention in return for attribution purposes.