And to think I know a couple who just built an expensive house with 5 acres of lawn, put all their money into it thinking they would sell it and retire.
They built when materials were at their very highest, even have a separate garage for a bus. I mean one the size of a Greyhound Bus.
I don’t know what they will do for retirement, tried to tell them not to put all their eggs in one basket.
That was me in 2008. I was financially ruined.
People are going to be shocked when they realize that real estate valuations don’t always inflate, like they have during our latest inflationary “run up” since the !930’s deflation.
Painful lessons will be learned as economic pain accelerates.
Timing is everything.
As long as they aren’t in a hurry they are likely going to be fine, but if they need to sell and sell quickly and get stuck trying to do it in a downturn they can get hurt.
Short of something making the location of the house suddenly undesirable which is beyond there control… odds are good they will be fine if they don’t wind up in a position where they must sell quickly.
A major market downturn may mean they have to sit for years to get what they feel they need out of it.
Real estate is a fairly safe long term play, but timing always matters.
Around 2006 there were a lot of high dollar resort subdivisions developed in the mountains of NC. The prices were insanely high and out-of-state people were buying them sight unseen with the intention of building their retirement home.
The typical plan was, ‘We are retiring in a couple of years and we can get a cheap payment on a 3 year balloon note. We’ll sell our house and use that money to payoff the note and build’.
Market crashed two years later. The $100,000 building lot dropped in value to around $30,000 and the marketability and value of their home crashed as well. The lots were not worth the loan amount anymore so they couldn’t sell them and let them go to foreclosure. There were thousands of instances of that happening here.