Downsizing on the Eastside: Where Sellers Go Next

By Jack Macdonald
Macdonald Group of Compass

One of the most common conversations I have with longtime Eastside homeowners goes something like this: the kids are gone, the yard feels like a second job, and the house has more square footage than anyone actually uses. They want to simplify. What they are not sure about is where to go.

Downsizing sounds straightforward until you start looking at what is actually available. The Eastside does not have a huge inventory of smaller, low maintenance homes in the same neighborhoods where most of these sellers have spent the last 20 years. So there is usually some give and take involved. Here is how I think through it with clients who are in that position.

What Most Sellers Are Actually Trying to Solve

Before talking about destinations, it helps to get clear on the real priorities. For most people I work with, the list usually comes down to a few things: less maintenance, fewer stairs, a simpler yard, staying reasonably close to where they already have their life set up, and ideally pulling some equity out of the sale.

The tension is that "less maintenance" and "stay on the Eastside" do not always point to the same options. A smaller single family home in Bellevue or Kirkland can still come with a yard to maintain and older mechanicals to deal with. A condo solves the maintenance problem but introduces HOA fees, shared walls, and less storage. Neither is wrong. They just solve different things.

The Condo Question

Condos come up in almost every downsizing conversation, and they make a lot of sense for people who genuinely want to be done with exterior upkeep. The trade is that you are living closer to neighbors, you have HOA fees that can be real money every month, and you have less flexibility to modify your space.

On the Eastside, the condo market is concentrated in a handful of areas. Downtown Bellevue has the highest density, and prices reflect that. If someone is coming out of a large home in Medina or Clyde Hill, the equity is usually there to make it work, but it is a significant lifestyle shift. Kirkland has some good options around downtown and along the waterfront corridor, with a more walkable feel than most of the Eastside. Redmond has added inventory near the transit center as that area has developed.

One thing worth knowing: not all condos are equal from a financing standpoint. Buildings with high investor ownership percentages or pending litigation can make conventional financing harder for buyers, which affects resale down the road. If you are buying a condo, it is worth asking about the building's financials and any known issues before you go under contract.

Townhomes as a Middle Ground

Townhomes solve some of what condos do not. You usually get a garage, a small private outdoor space, and a little more separation from neighbors. The downside is stairs, which is a real consideration for anyone thinking about aging in place over the next 10 to 20 years. A three story townhome with the bedroom on the top floor is fine at 60 and possibly a problem at 75.

Bellevue and Kirkland both have townhome inventory in the $800,000s to well over $1 million depending on location and finish level. Bothell and Woodinville tend to have newer construction at somewhat lower price points, and if proximity to family or a particular school district is not a constraint, those areas are worth a serious look.

Staying in a Single Family Home, Just a Smaller One

Some people are not ready to give up the single family house. They just want something smaller and easier. This is probably the hardest category to shop for on the Eastside, because the inventory of smaller, well maintained single family homes in desirable areas is limited and tends to move quickly.

What does exist is often in the 1,400 to 1,800 square foot range, built in the 1970s or 1980s, and may need updating. That is not necessarily bad. A well located older home with good bones can be the right answer if someone is comfortable doing some work or if they are handy. But it is worth going in with realistic expectations about what you will find versus what you might be picturing.

Kenmore, Bothell, and parts of Redmond tend to have more of this housing stock than central Bellevue or Kirkland. The tradeoff is usually a bit more driving and a different neighborhood feel.

Leaving the Eastside Entirely

Worth saying out loud: a meaningful number of people who downsize from the Eastside leave the area. Some go to the peninsula, some go to the coast, some go to be closer to family elsewhere. If the goal is maximizing what the equity from the sale can buy, that is often the math that works best.

I am not going to tell someone they should stay on the Eastside if their circumstances point somewhere else. That is a personal decision. What I can say is that people who have lived here for decades sometimes underestimate how rooted they are until they actually leave. Access to the medical systems here, longstanding friendships, familiar routines, those things have real value and are worth factoring in honestly.

The Financial Side Is More Complicated Than It Looks

Selling a home you have owned for 20 or 30 years on the Eastside often means significant capital gains. The federal exclusion is $250,000 for a single filer and $500,000 for a married couple, and a lot of longtime Eastside homeowners are sitting on gains well above that. Washington does not have an income tax, but the state capital gains tax passed in 2021 applies to gains above an inflation adjusted threshold, though real estate is currently exempt from that tax. Federal capital gains taxes still apply above the exclusion amount.

Before listing, it is worth talking to a CPA who understands the specifics of your situation. The timing of the sale, how the purchase of the next home is structured, and whether a 1031 exchange applies (typically only for investment property) can all affect the outcome. I am not a tax advisor and would not try to be, but I have seen people get surprised by the tax bill on a sale they assumed was straightforward, and it is better to know ahead of time.

How to Think About Timing

One of the more stressful parts of downsizing is the gap between selling and buying. If you sell first, you may need a bridge period in a rental or temporary housing. If you buy first without selling, you are carrying two properties. Neither is ideal.

A leaseback arrangement, where you sell your home and rent it back from the buyer for a period of time, can give you breathing room to find the right next place without pressure. It requires a willing buyer and the right terms, but it comes up more often than people realize and is worth discussing when you are structuring the sale.

The other option is to start looking before you list, get a clear sense of what is available in your target range and type, and then time the listing accordingly. Coming in with a realistic picture of the buying side first tends to reduce panic on both ends.

What the Adjustment Is Really Like

People sometimes focus so much on the logistics that they underestimate the adjustment to actually living in less space. Going from 3,500 square feet to 1,500 is a genuine change. Storage gets tighter, guests are harder to host, and the rhythms of daily life shift. Most people I talk to who have made the move say they adjusted faster than expected and are genuinely glad they did it. But it is worth being honest with yourself about what you use and value before committing to a size you might find too constrained after six months.

The people who tend to struggle the most are those who downsized to make a financial argument work rather than because they actually wanted a smaller space. If the numbers only work in a condo but you are a person who deeply values outdoor space and privacy, that mismatch will show up eventually.

Is it better to sell my Eastside home before or after buying the next place?

Most people are better off getting a realistic picture of what is available in their target type and price range before listing. If you can structure a leaseback with your buyer, that creates useful breathing room. Carrying two properties is stressful and expensive, but so is selling without a clear plan for where you are going. There is no universal right answer, but starting with a clear view of the buying side first tends to make the whole process less reactive.

How much do HOA fees actually run for Eastside condos?

It varies a lot by building age, amenities, and whether there is a parking garage or concierge. In newer Bellevue high rises, fees can run well above $700 per month and sometimes exceed $1,000 or more. Smaller condo buildings in Kirkland or Redmond tend to be lower, though fees vary widely by building. The fees matter for affordability calculations and affect what buyers can qualify for, which in turn affects your resale pool when you eventually sell.

What should I know about the capital gains situation when selling a longtime Eastside home?

Federal law excludes up to $500,000 of gain for married couples and $250,000 for single filers on a primary residence, as long as you have lived there two of the last five years. Gains above that are taxed at the federal capital gains rate, which depends on your income. Washington state's capital gains tax currently exempts real estate. Given how much Eastside home values have appreciated, it is worth running the numbers with a CPA before you list, not after.

Are there Eastside neighborhoods where it is actually realistic to find a smaller single family home?

Yes, though the inventory is limited. Kenmore has older ranch style and split level homes in the 1,200 to 1,800 square foot range, and prices tend to be lower than comparable Bellevue or Kirkland addresses. Parts of Bothell near downtown and older sections of Redmond also have this housing stock. The catch is that these homes are often from the 1970s or 1980s and may need updating. They are not turnkey in the way some buyers picture, but they are well located and often have good lot sizes.

Is a townhome actually a good long term option for someone thinking about aging in place?

That depends heavily on the layout. A townhome where the primary bedroom is on the main level can work well long term. A three story townhome where you are climbing stairs to reach every major room is harder to plan around as mobility changes. It is worth thinking about not just where you are now but where you might be in 15 years, and being honest about whether the floor plan still works.