The Cities and States Where Downsizing Leaves You With Extra Cash – Or Still Owing Money

The Best and Worst Cities for Downsizing

Of the 7,537 cities analyzed, only 2,676 are estimated to leave a typical downsizer with extra cash. The cities where downsizing still pays off tend to share one characteristic: family home values have surged over the past 12 years, while smaller homes have remained comparatively affordable. In the cities where downsizing costs money, the opposite is true, and smaller homes have risen to meet or exceed the price of larger ones.

The Cities Where Downsizing Leaves You With the Most Extra Cash

In some cities, downsizing is still highly lucrative. Sellers in these markets walk away from their family home with hundreds of thousands in extra cash after purchasing a smaller property outright. In the best cases, that figure may be close to $1 million.

Explore the chart below to see which cities leave downsizers with the most extra cash:

Below are the top 10 cities where downsizing leaves you with the most extra cash:

1. Pinecrest, FL — $851,014 extra cash after downsizing

The suburban village of Pinecrest on the outskirts of Miami tops the national rankings for extra cash unlocked through downsizing. A homeowner moving from a family home to a 2-bedroom property walks away with an estimated $851,014. Family homes here cost a median of $613,524 in 2014 and have risen to $1,650,856 in 2026, while 2-bedroom homes remain a comparatively affordable $325,828. That difference is what makes Pinecrest the best place in the country to downsize.

2. Bay Harbor Islands, FL — $729,010 extra cash after downsizing

Close behind is Bay Harbor Islands, also in the Miami area, where a typical downsizer can walk away with $729,010 in extra cash. Family homes have appreciated a median of $1,201,900 over 12 years, one of the highest price increases in the country. The area’s quiet luxury appeal has driven strong demand for larger homes, while smaller properties have remained more accessible.

3. Seal Beach, CA — $605,597 extra cash after downsizing

The first California city on the list, Seal Beach, is a small coastal community in Orange County where family homes have climbed from a median of $733,626 in 2014 to $1,593,416 today. 2-bedroom homes remain at a comparatively modest $439,545, and that spread leaves a typical downsizer with an estimated $605,597 in extra cash.

4. Coral Gables, FL — $567,291 extra cash after downsizing

Coral Gables, home to the famous 1920s Venetian Pool, is the third Miami-area city in the top five. Family home prices have climbed to $1,807,817 since 2014, fuelled by persistent high demand, leaving a typical downsizer with an estimated $567,291 in extra cash after purchasing a smaller property.

5. Lighthouse Point, FL — $544,096 extra cash after downsizing

Further north in the Fort Lauderdale area, Lighthouse Point sees a typical downsizer walk away with an estimated $544,096 in extra cash. Family home prices have risen $716,644 over 12 years, from $495,000 in 2014 to $1,211,644 today, while 2-bedroom homes remain affordable at $290,843.

6. University Park, TX — $542,641 extra cash after downsizing

The first Texas entry on the list, University Park, is an affluent enclave within Dallas where family homes have risen from $799,410 in 2014 to $1,852,564 today. With 2-bedroom homes at $704,417, a typical downsizer walks away with an estimated $542,641 in extra cash.

7. Ojus, FL — $485,936 extra cash after downsizing

Ojus, situated between Miami and Fort Lauderdale, rounds out Florida’s strong showing with an estimated $485,936 in extra cash for a typical downsizer. Family homes rose from $388,092 in 2014 to $974,431 today, likely driven by Florida’s post-pandemic surge, while 2-bedroom homes remain far more accessible at $192,281.

8. Campbell, CA — $452,372 extra cash after downsizing

Campbell, on the outskirts of San Jose, is the second California city on the list. Family homes have appreciated $1,215,545 over 12 years, among the highest in the country, rising to $1,962,898 today. With 2-bedroom homes at $930,184, a typical downsizer can still walk away with an estimated $452,372 in extra cash.

9. Sunset, SC — $448,941 extra cash after downsizing

A standout entry, Sunset is a small lakeside community in South Carolina’s Upstate region near Lake Keowee. Family homes there have climbed from $447,625 in 2014 to $1,055,562 today, while 2-bedroom homes remain at $267,925 — producing an estimated $448,941 in extra cash for a typical downsizer.

10. Bellevue, WA — $424,549 extra cash after downsizing

Rounding out the top 10 is Bellevue, Washington, located across Lake Washington from Seattle and a hub for high-income technology jobs. Family homes have nearly tripled from $516,183 in 2014 to $1,501,319 today. With 2-bedroom homes at $668,401, a typical downsizer walks away with an estimated $424,549 in extra cash.

The Cities Where Downsizers Would Still Owe the Most

In nearly two-thirds of cities analyzed, a typical downsizer would come up short, meaning the cost of a 2-bedroom home, combined with the remaining mortgage and selling fees, exceeds what they’d make from selling the family home. In the worst cities, that shortfall runs into the hundreds of thousands of dollars. Hawaii and New York account for eight of the bottom 10 markets where small homes have become so expensive that they now rival the price of larger family homes.

Explore the chart below to see which cities leave downsizers owing the most:

Below are the 10 cities where a typical downsizer would still owe the most:

1. Paia, HI — $551,974 still owed after downsizing

Paia, a small surf town on Maui’s north shore, is the worst city in the country for downsizing, and the reason is striking: 2-bedroom homes here now cost more than family homes. With a median 2-bedroom price of $1,475,737 compared to a family home median of $1,404,433, moving to a smaller property actually costs more than staying put. After accounting for the remaining mortgage and transaction fees, a typical downsizer would still owe an estimated $551,974.

2. Waimanalo, HI — $478,452 still owed after downsizing

Waimanalo, a rural community on Oahu’s windward coast, faces a similar dynamic as the top entry in this list. Family homes have a median of $992,206, but 2-bedroom homes have surged to $1,051,683, meaning the smaller property costs more. A typical downsizer here would still owe an estimated $478,452 after the transaction.

3. Santa Ynez, CA — $466,948 still owed after downsizing

Santa Ynez, a wine country community in Santa Barbara County, is California’s worst city for downsizing. Family homes there have risen from $725,044 in 2014 to $1,607,181 today, but 2-bedroom homes cost nearly as much at $1,519,794. A typical downsizer would still owe an estimated $466,948.

4. Sleepy Hollow, NY — $457,981 still owed after downsizing

Sleepy Hollow, the historic Hudson River village in Westchester County, ranks fourth. Despite its small-town character and population of just over 10,000, its proximity to New York City has made it a sought-after commuter enclave. Its shortfall comes down to the cost of smaller homes: 2-bedroom properties command $938,751, compared to a family home median of $881,764. A typical downsizer would still owe an estimated $457,981.

5. Uniondale, NY — $449,808 still owed after downsizing

Uniondale is a dense, working-class hamlet in Nassau County on Long Island. Despite its modest profile, its location in one of the most competitive housing markets has driven smaller home prices well above larger ones: family homes today cost a median of $640,308, yet 2-bedroom homes have surged to $868,684. A typical downsizer here would still owe an estimated $449,808.

6. Manhasset, NY — $445,497 still owed after downsizing

Manhasset is an affluent unincorporated community on Long Island’s North Shore, known for its top-ranked schools and a long history as one of the most desirable addresses in the New York metro area. Here, family homes rose from $1,087,895 in 2014 to $1,923,159 today. 2-bedroom homes have climbed to $1,568,438, a narrow enough gap that, after mortgage repayments and transaction costs, a typical downsizer would still owe an estimated $445,497.

7. Haleiwa, HI — $417,653 still owed after downsizing

Haleiwa is a historic surf town on Oahu’s North Shore, famous for its world-class waves. Family homes here cost a median of $1,653,970, while 2-bedroom homes command $1,453,951. After the remaining mortgage and fees, a typical downsizer would still owe an estimated $417,653.

8. Kilauea, HI — $393,227 still owed after downsizing

Kilauea is a small, rural community on the north shore of Kauai, the oldest and most remote of Hawaii’s main islands. Kilauea has become increasingly sought after by buyers drawn to Kauai’s dramatic natural scenery, driving up property values across all home sizes. Family homes have risen to $1,815,278 in 2026, but 2-bedroom homes have kept pace at $1,585,778. A typical downsizer here would still owe an estimated $393,227.

9. Nipomo, CA — $373,854 still owed after downsizing

Nipomo, a small unincorporated community in San Luis Obispo County, rounds out the West Coast’s showing in the bottom 10. Family homes there have risen from $401,470 in 2014 to $888,793 today, but 2-bedroom homes now cost $954,627, more than the family home itself. A typical downsizer would still owe an estimated $373,854.

10. Kalaheo, HI — $300,520 still owed after downsizing

Kalaheo is a small hillside town on Kauai’s south shore, sitting above the island’s famous Poipu beach resort area. With 2-bedroom homes at $1,000,398 compared to family homes at $1,078,574, the gap is too narrow to cover 12 years of mortgage repayments and selling fees. A typical downsizer would still owe an estimated $300,520.

Explore the table below to find out how much extra cash you’d walk away with or how much you’d still owe after downsizing in your city:

The Best and Worst States for Downsizing

At the state level, the downsizing picture is sobering: in 33 of 51 states, a typical homeowner would still owe money after selling their family home and buying a smaller one. The states where downsizing still generates extra cash are concentrated in affordable Midwestern and Southern markets, places where smaller home prices haven’t surged to match those of family homes. Coastal and high-cost states, by contrast, have seen 2-bedroom home prices rise alongside, or faster than, larger homes, making the financial case for downsizing difficult or impossible.

Explore the map below to find your state:

The States Where Downsizing Leaves You With Extra Cash

Only 18 states leave a typical downsizer with any extra cash after the transaction — and even the best-performing states offer returns that may surprise homeowners who assumed downsizing would fund a comfortable retirement. What these states have in common is a wide gap between the price of family homes and the price of smaller properties. In Kansas, for example, a 2-bedroom home costs less than half the price of a family home. That gap is what determines whether you walk away with extra cash or still owe money.

Below are the 10 states where downsizing leaves a typical homeowner with the most extra cash:

1. Kansas — $45,410 extra cash after downsizing

Kansas offers the largest cash surplus of any state, though even here the return is more modest than many homeowners might expect. A typical homeowner who bought a family home for $142,714 in 2014 can sell for $276,053 in 2026, and buy a 2-bedroom home for just $125,284, the widest proportional gap between home sizes of any state. After mortgage repayments and fees, that leaves an estimated $45,410 in extra cash.

2. Oklahoma — $34,160 extra cash after downsizing

Oklahoma comes in second, where a typical downsizer walks away with an estimated $34,160 in extra cash. Family homes have risen from $134,348 in 2014 to $241,812 in 2026, while 2-bedroom homes cost just $109,457, one of the lowest prices for smaller homes in the country. That combination of steady appreciation and genuinely affordable smaller homes keeps Oklahoma firmly in positive territory.

3. Missouri — $22,458 extra cash after downsizing

Missouri places third with an estimated $22,458 in extra cash after a typical downsizing. Family homes have more than doubled from $146,473 in 2014 to $297,096 in 2026, while 2-bedroom homes cost $165,447, maintaining enough of a spread to leave downsizers ahead after fees.

4. Texas — $19,515 extra cash after downsizing

Texas places fourth with an estimated $19,515 in extra cash. Family homes have risen from $154,021 to $316,301 over 12 years, while 2-bedroom homes cost $181,696. Texas’s strong job market continues to push family home values up, though smaller homes have been rising in tandem, narrowing the margin.

5. Indiana — $17,678 extra cash after downsizing

Indiana comes in fifth with an estimated $17,678 in extra cash. Family homes have more than doubled from $128,623 in 2014 to $272,055 in 2026, while 2-bedroom homes cost a modest $157,809, keeping Indiana firmly among the states where downsizing still makes clear financial sense.

6. Mississippi — $12,167 extra cash after downsizing

Mississippi ranks sixth, with a typical downsizer walking away with an estimated $12,167. Family homes have risen from $130,027 to $232,734 over 12 years, with 2-bedroom homes at $125,401, a narrow but still positive spread after transaction costs.

7. Tennessee — $11,995 extra cash after downsizing

Tennessee places seventh with an estimated $11,995 in extra cash. Family homes have more than doubled in price from $156,760 in 2014 to $370,302 in 2026. But 2-bedroom homes have risen sharply too, now at $238,218, which compresses the benefit as strong in-migration drives up prices across all home sizes.

8. Florida — $10,211 extra cash after downsizing

While Florida cities dominated the top 10 nationally, the state as a whole placed eighth with just $10,211 in extra cash for a typical downsizer. State-wide, family homes have risen from $170,487 in 2014 to $415,854 in 2026, but 2-bedroom homes have climbed to $274,230, significantly narrowing the spread compared to South Florida’s standout individual markets.

9. Ohio — $9,778 extra cash after downsizing

Ohio places ninth with an estimated $9,778 in extra cash. Family homes have risen from $129,977 to $270,006 over 12 years, while 2-bedroom homes cost $162,855, a modest but positive margin that keeps Ohio just above break-even.

10. Nevada — $9,048 extra cash after downsizing

Nevada rounds out the top 10 with an estimated $9,048 in extra cash. Strong appreciation in Las Vegas and Reno has pushed family homes from $178,998 in 2014 to $461,890 in 2026, but 2-bedroom homes have also climbed to $313,351, leaving the thinnest positive margin of any state in the top 10.

The States Where Downsizers Would Still Owe the Most

In 33 of 51 states, a typical downsizer would come up short, meaning the proceeds from selling the family home aren’t enough to cover the cost of a smaller one once mortgage repayments and fees are accounted for. In the worst states, that shortfall reaches six figures. This isn’t primarily a story about home values failing to grow, however. In most of these states, family home prices have roughly doubled over 12 years. Instead, it’s a story about smaller homes rising just as fast, or faster, eliminating the financial benefit of the move.

Below are the 10 states where a typical downsizer would still owe the most:

1. District of Columbia — $159,587 still owed after downsizing

The District of Columbia sees the largest shortfall of any state, with a typical downsizer estimated to still owe $159,587 after the transaction. Family homes have risen from $486,418 in 2014 to $751,881 in 2026, but 2-bedroom homes now command $560,484, a gap too narrow to cover 12 years of mortgage payments and selling fees.

2. California — $91,446 still owed after downsizing

California’s statewide median presents a difficult picture for downsizers, with a typical homeowner still owing an estimated $91,446 after the transaction. Family homes have risen from $359,094 to $797,507 over 12 years, but 2-bedroom homes across the state now cost a median of $615,701, leaving little room after mortgage repayments and fees. Individual cities like Seal Beach remain exceptions, but the statewide story is clearly negative.

3. New York — $83,447 still owed after downsizing

New York ranks third, where a typical downsizer would still owe an estimated $83,447. Family homes cost a median of $401,520 in 2026, while 2-bedroom homes command $333,451, a compressed gap that, combined with mortgage repayments and transaction costs, results in a shortfall.

4. Massachusetts — $61,959 still owed after downsizing

Massachusetts places fourth, with a typical downsizer still owing an estimated $61,959. Family homes have risen from $332,117 to $684,204 over 12 years, but 2-bedroom homes have kept pace at $496,834, leaving too little room after fees.

5. Wyoming — $52,564 still owed after downsizing

Wyoming’s shortfall of $52,564 reflects a different dynamic: the issue isn’t smaller home prices rising sky-high, but modest overall appreciation instead. Family homes have only risen from $221,340 to $373,418 over 12 years — not fast enough to build sufficient equity to cover the cost of a 2-bedroom home at $264,611 after fees.

6. Rhode Island — $50,043 still owed after downsizing

Rhode Island places sixth with a typical downsizer still owing an estimated $50,043. Family homes have risen from $240,333 to $529,855, but 2-bedroom homes have climbed to $397,359, a ratio that turns negative once mortgage repayments and selling costs are accounted for.

7. Maine — $49,314 still owed after downsizing

Maine places seventh, with a typical downsizer still owing an estimated $49,314. Family homes have nearly doubled from $194,239 to $449,946 over 12 years, but smaller homes have surged to $350,352, driven by pandemic-era demand for coastal and rural New England properties and strong interest from retirees seeking the smaller homes downsizers want to buy.

8. Alaska — $49,284 still owed after downsizing

Alaska places eighth, with a typical downsizer still owing an estimated $49,284. Family homes have risen from $292,569 to $423,771 over 12 years. That slow appreciation that means there isn’t enough equity built up to cover the cost of a 2-bedroom home at $264,100 after fees.

9. Vermont — $48,435 still owed after downsizing

Vermont comes in ninth, with a typical downsizer still owing an estimated $48,435. Family homes have risen from $233,594 to $446,168 since 2014, but 2-bedroom homes now cost $321,273, reflecting strong demand from remote workers and retirees for smaller Vermont properties.

10. New Mexico — $40,117 still owed after downsizing

New Mexico rounds out the bottom 10, with a typical downsizer still owing an estimated $40,117. Family homes have nearly doubled from $181,021 to $349,187, but 2-bedroom homes have risen alongside them to $254,755, resulting in a shortfall once fees are included.

The Best City in Every State to Downsize

Even in states where the typical downsizer would still owe money, there’s usually at least one city where the math works out better than others. These are areas where family home values have outpaced smaller home prices enough to produce a positive outcome, or at least minimize the shortfall. For homeowners weighing a downsize, knowing which city in their state offers the best financial outcome can make the difference between a profitable transaction and a costly one.

Explore the map below to find the best city in your state for downsizing:

Why Downsizing No Longer Guarantees Extra Cash

The conventional wisdom around downsizing says that selling a larger home and buying a smaller one automatically frees up cash. This concept was built in a world where smaller homes were significantly cheaper than larger ones, but in much of the country in 2026, that world no longer exists.

The Price Gap Has Closed

Over the past decade, demand for smaller homes has surged. First-time buyers, investors, and downsizers themselves have all competed for the same 2-bedroom properties, driving prices up faster than family homes in many markets. In Hawaii and parts of New York, smaller homes now cost more than the family homes people are trying to sell. And in coastal states like California, Maine, and Rhode Island, the gap has narrowed enough that selling costs and mortgage repayments alone are enough to tip the transaction negative.

The result is a market that looks very different from what many homeowners planned for. Only 18 states now leave the typical downsizer with any extra cash, but even the top-performing state, Kansas, nets just $45,410. For those who bought in high-cost or fast-appreciating markets, the assumption that downsizing will fund retirement may need to be revisited.

Where Downsizing Still Works

The cities and states where downsizing still generates meaningful extra cash share a common profile: strong appreciation in family home values over the past 12 years, combined with smaller homes that haven’t risen at the same pace. South Florida’s more expensive suburbs, select California coastal communities, and affordable Midwestern and Southern states fit this pattern well. In these markets, the price difference between a large family home and a smaller property has remained wide enough to produce a positive outcome even after transaction costs.

Homeowners in these markets are in a genuinely strong position. But for the majority of Americans, the downsizing calculation is no longer straightforward, and assuming it will work without checking the local numbers first could lead to a costly surprise.

The Case for Moving On

It’s worth noting that homeowners have an option this analysis doesn’t capture: leaving. The figures here model downsizing within the same city or state, but for many people in high-cost markets like California, New York, or Hawaii, relocating to a more affordable area is precisely the point of downsizing. Someone selling a family home in Manhasset or Paia and buying a 2-bedroom in Kansas or Tennessee would look very different from what this analysis shows. For those Americans, the question isn’t whether downsizing within their market makes financial sense, but how much their local market has built up for them to take elsewhere.

What Homeowners Need to Know Before Downsizing

Daniel Cobb, Senior Editor at MovingPlace, shares his perspective on how downsizing trends will affect the moving market:

“Homeowners often assume downsizing will automatically free up a significant amount of cash, but the reality is far more nuanced. What we’re seeing is a shift in how different types of homes are valued, particularly in cities where smaller properties are in high demand, whether from first-time buyers, downsizers, or investors. In those markets, the price gap between larger family homes and smaller properties has narrowed considerably, and in some cases, even flipped.

“That means downsizing isn’t always the straightforward financial win people expect. In high-growth areas, it can still unlock lots of cash, but in others, homeowners may find the financial benefit is limited, or that they’re actually losing money by moving. This could mean some homeowners may feel stuck in their current situations, either prompting them to move further away or abandon downsizing altogether.”

The Retirement Reality Check

For many Americans, the family home is the largest financial asset they own, and downsizing has long been seen as a reliable way to unlock that value in retirement. Our analysis suggests that the assumption deserves a closer look.

In most of the country, the extra cash generated by downsizing is modest, negative, or dependent on living in a specific market that happens to have the right conditions. Homeowners counting on a six-figure cash windfall from downsizing to fund their retirement may find the reality looks more like tens of thousands of dollars at best. And for the majority in states like California, New York, or Massachusetts, the transaction would leave them worse off financially, not better.

That doesn’t mean downsizing is never a good decision. Lifestyle, proximity to family, and reduced maintenance costs are all valid reasons to move to a smaller home. But treating the family home as a guaranteed retirement nest egg, without understanding what the local market will actually deliver, is a risk worth examining before making the move.

Methodology

This analysis estimates how much extra cash a typical homeowner would retain, or how much they would still owe, after downsizing in 2026, modelling 12 years of homeownership. Home prices are drawn from Zillow’s bedroom-specific ZHVI time series and averaged across a 12-month rolling window to avoid capturing temporary peaks or valleys. The family home purchase price uses a weighted average of 3- and 4-bedroom median prices, with the bedroom distribution drawn from Census Bureau data for each state. The 2026 downsize property is modeled as a 2-bedroom home purchased outright, using the same 12-month average.

Mortgage assumptions reflect 2014 averages: a 14.8% down payment and a 4.28% interest rate, with the remaining balance calculated after exactly 12 years of payments. The 2026 family home sale price applies a 5% deduction for selling costs, and the downsize purchase includes 1% closing costs with no new mortgage.

Net cash is calculated as sale proceeds after mortgage payoff and selling costs minus the all-in cost of the downsize purchase. A positive figure represents extra cash in hand; a negative figure represents the shortfall between what the homeowner walked away with and what the smaller home cost. We removed major resort towns and cities where the median family home price exceeds $2 million from our final ranked list. Homeowners in these areas are largely in a position of financial privilege that isn’t representative of the typical American downsizing experience.