Joanne is 81 years old, widowed and living by herself in the same three-bedroom, three-bath house on the quarter-acre lot in Menlo Park that she moved into 28 years ago to raise her family. She'd like to move to a smaller, more manageable condominium, but like many older homeowners occupying houses now too large for them, the financial complexities and uncertainties of making a move in such a competitive real estate market have held her back.

She's worried that she will be outbid by buyers who can afford to make all-cash offers, leaving her to the vagaries of the rental housing market.

"If this were a normal market, it would be different," said Joanne, who asked that her real name not be used to protect her privacy.

She's also worried about incurring huge capital gains taxes if she sells.

"Some people would say, 'Who cares?' But if you're trying to leave something for your children, that's a big issue," Joanne said.

Retired middle-school teacher Sue Smith, 74, also is pondering whether to move out of the San Carlos home she's lived in for the past 35 years. Over the past three years, she's made the rounds of local retirement communities, identifying affordable places where she can continue her independent lifestyle — volunteer and church activities, book club — and have care available in the event she needs it. Yet, she's also put off downsizing.

"The stumbling block for me is the cleaning out — there's stuff everywhere," said Smith, who has decided to stay put for now.

Brian Cairney, a Realtor at Kerwin & Associates in Menlo Park and founder of the Active Boomers Seminar Series aimed at older adults thinking about downsizing, said these are common financial and emotional considerations.

"I work with a lot of families in this area, and the majority of people say they want to age in place," said Cairney, who has held three seminars since last fall, including one in the spring that Joanne attended with about one dozen other baby boomers. "We live in a unique place in America. This is a place where people come to retire, and most people don't want to leave."

While remaining in the family home can sometimes work well, he cautioned that older homeowners should at least be aware of the "financial and emotional triggers" that could signal it's time to make a move.

He said, for example, a spouse's death could trigger a step-up in a home's tax basis. The surviving spouse could avoid capital gains tax by selling the home.

"Don't let circumstances make your decision for you — have a plan in place," he advised.

Palo Alto Realtor Nancy Goldcamp, who is a frequent speaker at the annual housing conferences organized by senior services agency Avenidas, had similar advice.

"Gather concrete information rather than just saying in your mind, 'Oh, the capital gains tax is a killer,'" she said.

When people actually run the numbers, the capital gains tax sometimes is not as bad as they expect, she said. Alternatively, there are legal ways, such as charitable annuity trusts, to bypass certain taxes.

There's also a Realtor-sponsored initiative that recently gained enough voter signatures to become eligible for California's November ballot that seeks to remove another tax barrier for older homeowners wishing to relocate.

The measure, known as the "Property Tax Fairness Initiative," would allow property owners who are 55 or older or disabled to transfer their current property tax basis to replacement homes anywhere in California. Currently, under Propositions 60 and 90 — passed in 1986 and 1988 — older homeowners can transfer their property tax basis only to a handful of cooperating counties, including Santa Clara, San Mateo, Alameda, El Dorado, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Tuolumne and Ventura. (El Dorado County's participation is set to expire Nov. 7.)

The new initiative also would remove restrictions that limit transfers to one time only and require that replacement homes be of equal or lesser value than the original home.

She said downsizing isn't the only option for seniors who find themselves in homes that suddenly seem to be too big. She's worked with several seniors who have stayed at home and created new income streams — and companionship — by renting out extra space they no longer use.

"It can take years for people to make these decisions," Goldcamp said. "I've worked with people for as long as five years before they actually move. The important thing is to make an informed decision, because once you sell your house, you really can't unsell it."