When you downsize, you can probably save on certain costs, including:
Utility bills - Especially if you currently live in a big old drafty house. Runzheimer International, a management consulting firm, estimates an $800 annual savings in utility costs by downsizing from 2,800 to 1,800 square feet. (On the flip side, if you plan to move somewhere much warmer, your air conditioning bill could zoom.)
Maintenance costs - If you are moving from a large (and older) home on a big chunk of land to a more modest footprint in a townhouse or condo, you'll cut down drastically on yard work and snow removal, for example.
Property taxes - check to make sure. If you are in retirement mode and considering a move to a new county or state, ask if there is a property tax exemption or deductions for senior citizens.