There are a couple of reasons my wife and I aren't even thinking about selling our house and moving into a smaller place in a few years when the kids are all shipped off to college. One is that we don't think we, or anyone else for that matter, will be able to sell our house for quite a few years. In a word the real estate market still sucks in our neck of the woods.
A second reason we probably shouldn't count on downsizing can be found in this article about the slide of the median household income in America to 1996 levels:
As families struggle to make ends meet and young workers navigate the moribund labor market, many have turned to each other. According to the Census report, 5.9 million Americans between 25 and 34, or 14.2% of that group, lived with their parents in spring 2011, compared with 4.7 million before the recession, or 11.8%.
I love my kids, but there's no way I could stand living with them in close quarters which means I'm going to want to keep all the space I can. On the positive side I'll be charging them rent so I might as well give them a little space in exchange for whatever dollars they might earn while working shoulder-to-shoulder at Taco Bell with the other college grads being sucked into our blackhole of an economy.