A lot of people think their house is their pension and they will downsize, but few people do.
A lot of old people simply don't want to leave their home, and of those that do, most people will prefer to stay in the same area near lifelong friends and family. As area tends to be a bigger element of the price than the size of the house, it's difficult to be release that much capital after taxes, costs of moving.
Also note that your parents lived through a massive and unprecedented credit bubble. Just because this happened over the last generation does not mean it will continue to happen. Quite the opposite, we'll be unwinding the excesss of that generation over the next 10-20 years.
A lot of old people simply don't want to leave their home, and of those that do, most people will prefer to stay in the same area near lifelong friends and family. As area tends to be a bigger element of the price than the size of the house, it's difficult to be release that much capital after taxes, costs of moving.
Also note that your parents lived through a massive and unprecedented credit bubble. Just because this happened over the last generation does not mean it will continue to happen. Quite the opposite, we'll be unwinding the excesss of that generation over the next 10-20 years.