By Jim Donovan

PHILADELPHIA (CBS) — It’s part of the American dream: to buy a home and watch it increase in value. But that has changed dramatically in recent years. 3 On Your Side consumer reporter Jim Donovan explains how it’s altering the way all of us need to think about our finances.

Dan Leclerc is selling the home he’s owned for 27 years. He and his wife are ready to downsize.

“We need to put together a lifestyle that can we can support and be relaxed about,” said Leclerc.

While his home held its value better than some, Dan’s equity isn’t as much as he might have expected just a few years ago.

“We are in an era of lower expectations,” said Leclerc.

Many baby boomers who were counting on huge windfalls from their homes are finding they aren’t going to be there.

“It’s really sad, because that’s what they were told. Pay your mortgage, have the real estate. It will be there for you, and then when it’s not there, it is, it’s heartbreaking. That’s exactly what it is,” said financial planner Dana Levit.

One approach is paying down your mortgage faster, so you’ll have more equity when it comes time to retire and possibly sell, but Levit cautions against leaving your self cash-poor.

“You really do need to have a pot of money aside that you can use for liquidity, for paying all of your bills. It’s great to have a paid off home because I think there’s a real sense of security there, but if you can’t access it, then it is not a great planning tool,” said Levit.

In fact, more boomers may be forced to do what’s called “age in place” — stay put because they can’t sell at a high enough price.

One option for a cash strapped homeowner is a reverse mortgage. In the past, they had a horrible reputation with high fees and closing costs, but many have improved and might be worth at least investigating.

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Reported by Jim Donovan, CBS3

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