Why “just sell and downsize” isn’t a plan — and what a real one looks like
By Sherrie Bebell, Mark Maimon and Jessica Solomon
A recent Los Angeles Times opinion piece examined how older Californians staying in their longtime homes may be contributing to the state’s housing shortage. The letters that followed were more revealing than the article itself.
They weren’t written by people refusing to move. They were written by people who want to move — closer to family, into something safer and easier to maintain, into a senior living community — and who cannot get a straight answer about what that decision would actually cost them.
That is a very different problem. And it is a far more solvable one.
From the outside, a longtime California homeowner sitting on a home worth $1 million or $2 million looks financially secure. And in one sense, they are. But equity is not the same thing as accessible money, and the value of the house is only one line in a much longer equation.
The same homeowner often also has:
Selling may unlock equity. It may also trigger taxes, commissions, repairs, moving costs, and the price of wherever they land next. None of that means selling is wrong. It means the decision deserves real math before anyone lists the house.
Under current federal rules, qualifying homeowners may generally exclude up to $250,000 of gain — or up to $500,000 for qualifying married couples — from the sale of a primary residence. Those thresholds were set in 1997 and have never been indexed for inflation. The National Association of REALTORS® estimates more than 13 million homeowners would now exceed them.
Separately, California’s Proposition 19 may allow eligible homeowners age 55 and older to transfer the taxable value of their primary residence to a replacement home — up to three times, anywhere in the state, at any purchase price, generally within two years of the sale.
These are two different calculations, and families confuse them constantly. Prop 19 can protect a property-tax basis. It does not address capital gains. Assuming one solves the other is how a move becomes an expensive surprise.
“Selling is one way to access what a home is worth — it isn’t the only one, and it isn’t always the best one. When a family has time to plan, there are financing structures that can bridge a transition, cover a deposit, or let someone move before the house sells. Financial options can narrow quickly when a family is in crisis and that can put families in a major bind when they have an urgent need to access money”
Mark Maimon
Some longtime homeowners run a rough version of this math, conclude it makes more sense to stay and eventually leave the home to their heirs — who may receive a stepped-up basis under current law — and stop there. That’s a rational read of the tax code, and it creates a powerful incentive not to sell.
But the decision doesn’t stay purely financial. The home may stop being safe or practical. Maintenance becomes overwhelming. One spouse dies, leaving the other alone in a house built for a different stage of life. And then a health event arrives and the family has to decide in a week what deserved a year.
That’s when the chain reaction starts:
CARE → COST → MONEY → HOUSING → THE HOUSE
Each link is usually handled by a different professional, at a different time. The real estate professional discusses selling. The tax professional calculates liability. The financial professional reviews income and assets. The community explains monthly costs. The family talks about what Mom or Dad actually wants.
Everyone is doing their job well. No one is holding the whole picture.
“I hold a real estate license, but my role is often to connect families with the right agent based on their unique dynamics and circumstances. My fellow agents and I have discouraged families from selling far more often than people might expect, helping them preserve the home until the timing better aligns with their care and financial needs. After 20 years in home care, I have seen too many families assume, ‘We need money for Mom or Dad, so we need to sell the house,’ without understanding the consequences or the options they may have had. That is where we must stop, do the math, and identify every available solution — because clarity is kindness, and it should be mandatory before a family sells its largest asset.”
Jessica Solomon
Families who work through these questions early consistently make calmer, better decisions than families who work through them under pressure.
1. The home’s true tax basis. Find the original purchase records and documentation of qualifying improvements. Taxable gain is not simply the sale price minus what was paid decades ago, and improvements over the years can matter more than people expect.
2. The realistic net proceeds. Ask for an estimate that includes potential taxes, mortgage payoff, commissions, repairs, staging, moving expenses, and closing costs — not just the listing price.
3. The full cost of the next housing decision. Downsizing is not automatically cheaper. Compare buying, renting, staying put with modifications, and moving to a community on the same page, with the same assumptions.
4. The probable cost of care. Housing and care cannot be planned separately. A beautiful new home doesn’t solve the problem if it leaves too little available for support later.
5. Every financial resource on the table. Selling is one way to use the value of a home. Depending on the family’s circumstances, other lending or financial strategies may create time and flexibility — and there are often benefits, programs, and resources families simply don’t know to ask about. Every option carries costs and risks that should be reviewed carefully.
6. What the homeowner actually wants. Stay near friends? Move near grandchildren? Preserve an inheritance? Reduce maintenance? Fund care without becoming a burden? The numbers matter, but the goal should drive the plan — not the other way around.
Updating the federal home-sale exclusion is getting serious attention in Congress. The More Homes on the Market Act would double the thresholds to $500,000 for single filers and $1 million for married couples; it was introduced in the House in February 2025 and now carries more than 100 bipartisan cosponsors, with a Senate companion introduced that December. A separate bill, the No Tax on Home Sales Act, would remove the dollar limits entirely. Both remain in committee. That conversation is worth having.
But families making this decision this year can’t wait for tax policy to change — and the good news is that they don’t have to. In our experience, once someone finally puts the tax picture, the care costs, the housing options, and the available financial resources side by side, the answer is more often better than the family feared, not worse. Not because anyone found a loophole. Because no one had ever added it all up in one place.
“Families come to us bracing for bad news, and I can’t tell you how often the news turns out to be better than they expected. Not because we did anything clever — because we sat down and looked at the whole picture with them, the way a college financial aid office would. Clarity is the service. The confidence comes right behind it.”
Sherrie Bebell
An older adult’s home may be the family’s largest asset, the source of future care funding, an intended inheritance, and the place where decades of memories were made. It deserves better than a one-line recommendation.
The goal was never to push older homeowners out of their homes to create inventory. The goal is to give every family enough clarity to make the decision that protects their independence, their financial security, and their peace of mind.
Because most seniors aren’t stuck. They just haven’t been given the whole picture yet — and that is something we can fix.
When the house question comes up, where do you send the family?
Compass gives sales teams, advisors, and referral partners a place to hand families who are financially stalled — a Senior Living Financial Advocate who helps them understand their options and maximize the resources available to them.
This article is intended for educational purposes only. Tax, legal, real estate, and financing decisions should be reviewed with appropriately licensed professionals based on your family’s individual circumstances.