Should I downsize my Colorado Springs home or stay where I am?

Start with why you'd downsize

When someone tells me they're thinking about downsizing, my first question is why. Downsizing is usually the answer to something else, and until you know what that something is, you can't tell whether selling or staying solves it. This is the core of the Life → Wealth → Real Estate™ method I use with every client: start with the life goal, optimize that plan for your wealth, and only then look at the real estate.

"We want to downsize" can mean very different things:

• Lower monthly costs, because the budget is tight
• Less to take care of: fewer stairs, less yard, less maintenance
• Freeing up equity for retirement, family, or a goal you've put off
• Moving closer to family, in town or in another state
• Right-sizing a house built for a family that doesn't live there anymore

Each of those points somewhere different. For one, the smartest move is to sell soon. For another, it's to stay and change the house instead.

In my experience, the most common real goal is single-level living. I worked with empty nesters who were set on selling their five-bedroom home. When we talked it through, what they really wanted was less to take care of, not less house. We found them a maintenance-free patio home. Sometimes the goal is about family: I've helped a client whose health was changing move closer to their children.

Before you call anyone, try finishing one sentence: "The thing I'm actually trying to accomplish in this next chapter is ___." I walk through this in more detail in my video I'm a Real Estate Advisor. This Is the SMARTEST Way I Know to DOWNSIZE a HOME.

Compare selling and staying in real dollars

Once you know the goal, put both options side by side.

Selling isn't free. There are the costs of selling, the costs of buying the next place, and the move itself. See what it costs to sell a home in Colorado Springs. Many longtime owners have no mortgage at all: about 64% of U.S. homeowners 65 and older own their homes free and clear, according to a ResiClub analysis of 2024 Census Bureau data. Homes also cost more now than when many people bought, so moving can mean spending much of your equity on the next home, or taking on a new mortgage, and the smaller place doesn't always save as much as expected.

People are also often surprised by what it takes to sell a home in today's market, which has changed a lot since the summer of 2022. For how to read current conditions, see whether Colorado Springs is a buyer's or seller's market.

Staying isn't free either. There's upkeep, property taxes, insurance, and possibly changes to make the house work as you age. And there's a cost that doesn't show up on a statement. I call it a wealth tax, and I don't mean a tax bill. Your mental bandwidth is part of your wealth. If projects around the house are piling up and weighing on you, or you don't have the knowledge, the physical ability, or the money to get them done, the house starts to close in around you. That's a real cost of staying, and it belongs in the comparison.

Check the tax and estate side before you list. When you sell your primary home, federal law lets you exclude up to $250,000 of gain from income ($500,000 for most married couples filing jointly) if you owned and lived in the home for at least two of the last five years. If you move out and rent the home for a while before selling, you can lose that exclusion. While you're looking at the house, also confirm it's titled the way your estate plan assumes, including whether it's actually in your trust if you have one. A CPA and an estate attorney are the right people for both questions, and the time to ask is before you list.

What's specific to Colorado Springs

The senior property tax exemption can reset when you move. In Colorado, homeowners 65 and older who have owned and lived in their home as their primary residence for at least 10 consecutive years can have 50% of the first $200,000 of the home's actual value exempted from property tax. The 10 years are tied to that home, so moving generally restarts the clock on the next one. Colorado created temporary relief for seniors who received the exemption in 2020 or later and then moved, but it's authorized only for tax years 2025 and 2026. For the details, see what happens to your property taxes when you downsize and how property taxes work in El Paso County.

Newer single-level homes can carry costs your current home doesn't. Many of the patio homes and 55+ communities around Colorado Springs are in newer areas with HOA dues, and some are in metro districts that add to the property tax bill. Compare the full monthly cost, not just the price. See what a metro district is and what to review before buying in an HOA.

If you stay, some changes need a permit. Turning a rarely used formal dining room into a main-floor bedroom, or other changes that make a multi-level home livable on one floor, can involve work that requires a permit. Check with the Pikes Peak Regional Building Department before you start.

If you're leaning toward staying

Staying can absolutely be the right answer, if you choose it on purpose. Think about what your needs might be 10 years from now, not just today. Could you live entirely on one floor? Could a room you rarely use become the bedroom or the space you use every day? What would it cost to hire out the maintenance you're doing now? If you're 60 or older, the Pikes Peak Area Agency on Aging can point you to local resources for staying in your home.

Give yourself enough runway

The single biggest reason downsizing goes badly is waiting until you're forced into it. With 12 to 18 months, you can sort through decades of belongings at a human pace, time the sale around the tax rules, and line up the right team. See how to prepare a longtime home for sale without becoming overwhelmed.

I watched the other side of this in my own family. My mom had to move out of her house in about a week after she broke both of her ankles. There was no time to plan, and decades of a life were sorted in days because the decision got made for her instead of by her.

Moving at an older age isn't easy, and parts of it will get hard. That's why the life vision matters so much. When things get tough, the reason you're moving is what you hold on to.

A simple way to decide

• If the real goal is less maintenance or single-level living, price out both a move and the changes that would make your current home work, then compare.
• If the goal is lower costs, compare your full monthly cost now with the full monthly cost of the next home, including HOA dues, metro district taxes, and insurance.
• If the goal is freeing up equity, talk with a financial planner and a CPA about what you'd do with it and what the sale would net after taxes and costs.
• If the goal is being near family, the location usually decides it, and the question becomes timing.
• If you can't name the goal yet, wait. That's the first step, and it's worth getting right.

What could change the answer

• Health changes. A fall or a new diagnosis can shorten the timeline suddenly, which is a reason to plan while you have options.
• Tax rules. The senior exemption's temporary relief for movers expires after 2026 unless the legislature extends it, and the home-sale exclusion has its own ownership and use tests.
• Market conditions. What your home sells for and what the next one costs can shift the numbers.
• Your plans for the house. Keeping it as a rental or passing it to family raises different tax and estate questions.

When to talk with a professional

About the author

Weldon Hobbs is a Colorado Springs REALTOR® and co-founder of Team Hobbs Realty. He is a member of The Platinum Group, REALTORS®, Colorado Springs' #1 independent brokerage, which pairs deep local expertise with premium marketing exposure. A U.S. Air Force Academy graduate and retired Air Force veteran, he and his family made more than 10 military moves. Since 2006, he and his wife, Kristen, have bought and sold their own homes, managed a portfolio of rental properties, and guided others through their own real estate decisions. He has also helped both family members and clients downsize, where the decisions are often complex and the process can feel overwhelming. Drawing on his background as a PMP® (Project Management Professional), he helps people break those decisions into clear, manageable steps.

Since beginning his real estate career, he has ranked in the top 7% by sales volume among the more than 4,000 members of the Pikes Peak Association of REALTORS®. He works with military families, seniors and downsizing clients, luxury and premium home sellers, and people relocating to Colorado Springs. He developed the Life → Wealth → Real Estate™ method, hosts the national YouTube channel Life & Real Estate Without Regret, and holds an MBA along with the SRES® (Seniors Real Estate Specialist®), MRP (Military Relocation Professional), and Certified Financial Coach credentials. More about Weldon

Sources

• Colorado Division of Property Taxation, Senior Citizen and Veterans with a Disability Property Tax Exemption and Senior Primary Residence Classification: https://dpt.colorado.gov/property-tax-exemption-for-senior-citizens-and-veterans-with-a-disability
• El Paso County Assessor, Senior Property Tax Exemption: https://assessor.elpasoco.com/senior-property-tax-exemption/
• Internal Revenue Service, Publication 523, Selling Your Home: https://www.irs.gov/publications/p523
• Fast Company (ResiClub analysis of U.S. Census Bureau data), Why 40% of U.S. homeowners have no mortgage: https://www.fastcompany.com/91429491/housing-market-mortgage-free-40-of-u-s-home-owners-why-the-number-keeps-growing
• Pikes Peak Regional Building Department: https://www.pprbd.org
• Weldon Hobbs, Life & Real Estate Without Regret, "I'm a Real Estate Advisor. This Is the SMARTEST Way I Know to DOWNSIZE a HOME.": https://www.youtube.com/watch?v=rhPxsNQvCNM