It's funny, my husband and I were just discussing this same topic this morning. Our house is about 3800 square feet, a ranch over a basement. The upstairs part of the house is complete as is - laundry, kitchen, etc. - and once the final kid is moved out, we wouldn't have to go downstairs at all if we didn't have company. So the question would be - should we move somewhere smaller (with a smaller yard to maintain, etc.) or stay where we are and be able to use the basement when we have a big family event or overnight guests.

We think, for the foreseeable future, we'll be staying where we are. Even if we moved, it would not be to a different area because of the family business and the married children who live nearby.

However, eventually, maybe in five to ten years, we might consider moving to a condo, for two reasons - one is property value, we should be able to realize a good profit from selling this house and could use that money when we retire. And two, after we retire we want to travel a lot and with a condo, we wouldn't have to worry about the yard, etc.
Plus I think (having dealt with my parents' estates) that downsizing forces you to thin down your possessions and spares your heirs a lot of hassles.