Written by Marc Cormier, Seniors Real Estate Specialist (SRES), Berkshire Hathaway HomeServices PenFed Realty. Top 1% of Realtors nationwide, serving Maryland, Virginia, and Washington DC.

August 19, 2026 · Marc Cormier, SRES

Every year, homeowners ask the same question: is now the right time to downsize? In 2026, the answer comes with several factors that line up in a way they have not in years.

If you own a home in Montgomery County or anywhere in Maryland, this article walks through the market conditions, financial realities, and lifestyle trends that make 2026 a year worth paying attention to.

Equity Is at Historic Highs

Montgomery County home values have appreciated significantly over the past decade. If you have owned your home for 20 or 30 years, you are sitting on substantial equity. Money that could fund a more comfortable retirement, pay for healthcare, or help family members.

Homes in Potomac, Bethesda, Chevy Chase, and Rockville that were purchased for $300,000 to $500,000 in the late 1990s or early 2000s are now worth well over $1 million in many cases. Montgomery County median home values have risen significantly: in Bethesda and Potomac, many homes are now worth $800,000 to $1.5 million, while homes in Gaithersburg and Germantown typically range from $400,000 to $650,000. That growth is real, and it is accessible when you sell. For a retiree on a fixed income, freeing up that equity can transform monthly cash flow from tight to comfortable.

Interest Rates Have Stabilized

After the volatility of recent years, rates have settled into a more predictable range. For downsizers, this matters in two ways.

If you are buying your next home with cash from the sale of your current home, interest rates barely affect you at all. You skip the financing step entirely, which also makes your offer more attractive to sellers in a competitive market.

If you are financing part of your next purchase, the current rate environment is workable. While rates are higher than the historic lows of 2020 and 2021, they are stable and predictable. You can lock in a rate and plan your monthly payment with confidence, unlike the whiplash of rapid rate increases that characterized the 2022 and 2023 markets.

The 55+ Market Is Thriving

Montgomery County and surrounding areas have seen a surge in 55+ communities, active adult neighborhoods, and low-maintenance living options. More choices mean more chances to find the right fit for your lifestyle, budget, and desired location.

Communities like Leisure World in Silver Spring continue to offer resort-style amenities with over 5,500 homes, two clubhouses, golf courses, swimming pools, and hundreds of clubs and activities. Rockville's 55+ communities, Silver Spring's active adult neighborhoods, and Gaithersburg's newer active adult developments all offer downsizing options with amenities designed for retirees. Active adult neighborhoods in Germantown provide additional options with newer construction and modern floor plans designed for aging in place.

For those who prefer urban living, luxury high-rise condos in Bethesda and Chevy Chase offer walkability, concierge services, and maintenance-free living with easy access to Metro stations, restaurants, and shopping. The growing inventory in this segment means buyers have leverage they did not have a few years ago.

To zero in on the right fit, see which Montgomery County neighborhoods are best for downsizing and compare your options across the county.

Property Taxes Are Rising

Maryland property taxes continue to climb, especially in high-value counties like Montgomery. Downsizing to a smaller home or a community with lower assessments can significantly reduce your annual tax burden.

A homeowner moving from a $1.2 million single-family home in Potomac to a $600,000 condo in Bethesda could see their annual property tax bill drop by $6,000 or more. Over a 10-year retirement, that is $60,000 in savings, which could fund a significant portion of healthcare costs, travel, or everyday living expenses.

Healthcare Costs Are Increasing

Medical expenses are one of the biggest financial pressures on retirees. The cost of healthcare, long-term care, and unexpected medical events continues to rise nationwide. Maryland is no exception.

Freeing up home equity can create a financial cushion for these expenses. A downsizing move that puts $300,000 or more in cash in your pocket gives you the flexibility to pay for in-home care, assisted living, or medical treatments without drawing down your retirement accounts or going into debt.

The Bottom Line

If you have been thinking about downsizing, 2026 may offer a window of opportunity. Strong equity, a competitive 55+ market, and rising ownership costs all point in the same direction: smaller, simpler, and more financially secure.

The best time to start the conversation is now, while you have the time and flexibility to make thoughtful decisions. Marc offers free, no-obligation consultations to discuss your situation, answer your questions, and help you build a timeline that works for you.

Before you decide, learn about capital gains tax when downsizing in Maryland so you can factor potential tax implications into your calculations.

Frequently Asked Questions About Downsizing in 2026