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Seems like the wrong emphasis unless it is not really your last home. So many times people buy homes thinking mostly of resale and not what they really like or want - your last home should be primarily what YOU want. Unless you have absolutely no taste or preferences of your own or are planning on that to finance your healthcare when you're no longer independent.
For a retirement home, I'd be more interested in property taxes and a risk that they could spike than in potential appreciation. I'd hate to buy my retirement home and have it triple in value over a decade with the same tripling of property taxes. I might not be able to afford to live there.
I view my retirement house as my long term care policy. I've tried to pick a housing style (no stairs) and location (very close to services) to avoid the need for assisted living. Until I'm not safe in the house by myself, I should be OK with the town elderly affairs & community nursing building a mile away, paid help for cooking, cleaning, laundry, errands, and taxis/Uber to get me to anything that doesn't deliver to my door. I'm hoping self-driving cars will be useful, too.
I spent as much remodeling my house as I paid for it in 2009. I'd have to see crazed amounts of appreciation to ever get that money back. I view a house as discretionary spending to improve my quality of life, not as an investment. If I wanted to create the largest possible pile of money, I'd live in a tiny studio apartment in a bad neighborhood and invest the money in the market.
For a retirement home, I'd be more interested in property taxes and a risk that they could spike than in potential appreciation. I'd hate to buy my retirement home and have it triple in value over a decade with the same tripling of property taxes. I might not be able to afford to live there.
I view my retirement house as my long term care policy. I've tried to pick a housing style (no stairs) and location (very close to services) to avoid the need for assisted living. Until I'm not safe in the house by myself, I should be OK with the town elderly affairs & community nursing building a mile away, paid help for cooking, cleaning, laundry, errands, and taxis/Uber to get me to anything that doesn't deliver to my door. I'm hoping self-driving cars will be useful, too.
I spent as much remodeling my house as I paid for it in 2009. I'd have to see crazed amounts of appreciation to ever get that money back. I view a house as discretionary spending to improve my quality of life, not as an investment. If I wanted to create the largest possible pile of money, I'd live in a tiny studio apartment in a bad neighborhood and invest the money in the market.
Very well said. While many people do have the benefit of a house appreciating in value, a home should not be looked at as an investment vehicle. Particularly not a property that is purchased with at least the intention of being your final home.
For me, the value of owning a home in retirement is the cash flow aspect. Yes, taxes can go up and there will be some maintenance costs, but those are still going to be relatively small compared to the unknowns of rent increases or even being put in a position of an undesired move if a landlord's own situations or plans change.
I'm not going to be around to reap the benefit of any appreciation anyway, it's all about having a home that is comfortable and livable for me in my final years, with whatever value in it eventually going to my son. It's all a windfall for him as he won't have invested anything in it anyway.
Welcome to the sort of market in the rest of the country, where modest appreciation at a rate not too much different from inflation is typical.
You can buy a house for a good bit less than in CA. Buy something good, not too strange, in a good area and if you need to sell you will be able to do so without losing money. Making money is the icing on the cake. Take the leftover money from selling in CA and invest.
Yep. That's the way most of flyover country is. In my neck of the woods, housing appreciation is at to slightly below inflation. You may lose money over time.
I'm thinking about buying a second home or condo in Scottsdale. The prices are still a bargain and haven't reached their 2006 peak yet. My guess is that you will get better price appreciation % in Scottsdale than your Silicon Valley property if you measure both at current value. The outrageous property appreciation that SV has gotten over decades is not normal and it's anyone's guess as to whether that will continue.
So we should both get into this market before the rest of the Californians leaving the state figure out this is a good place to live. (Half-smiley here.) There are some beautifully remodeled homes in South Scottsdale that are priced in the $350-$400k range, for example. And you have the advantage of being close to Old Town. Good luck if you decide to go ahead.
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Now what I wouldn't do is take your SV sale price and buy a similar prices property in Scottsdale, you can get an outstanding house for a reasonable price.
Yes, that makes sense. We sold a rental house so will be rolling over that into the "new" house here. We're not going to sell the Peninsula house for a while yet. It needs a good deal of work. We thought we could spend summers there doing that and avoiding the Phoenix heat. Kind of a best-of-both-worlds scenario...except that California continues to get their tax bite too.
Same here. The house we are in now was bought for growing a family and for appreciation, current value at over $600,000 more than we paid. The next, for retirement in 3-4 years will be in a less expensive (lower demand) area where we can pay cash but not care about the value going up. In fact it's an advantage if it stays the same, or drops some since the property tax will not increase as fast.
This is interesting. Just curious, what's your reasoning on buying the next house rather than renting a place? I would think in a situation like yours where house appreciation is not paramount, renting would be simpler (no maintenance!) and more financially reasonable (no taxes for one thing) and you'd still have a $600,000 cushion. What am I overlooking? Thanks.
For me, the value of owning a home in retirement is the cash flow aspect. Yes, taxes can go up and there will be some maintenance costs, but those are still going to be relatively small compared to the unknowns of rent increases or even being put in a position of an undesired move if a landlord's own situations or plans change.
That's 50% of it for me. I'll be 60 in May. If I lost my job today and never worked again, I've bounded my housing cost to something I'll always be able to afford. The other 50% is that I have to feel good about living there. That's why I spent 4 years remodeling my future retirement house to my taste out of cash flow. I like the location. I feel good when I walk in the door. It's important for my whole mental health to have that.
People keep saying I shouldn't worry about appreciation in the house I will die in.
I'm not sure it will be our last house. I think there are many more adventures ahead. For now I am concentrating on places that don't have stairs. I'm wondering what the heck was in the minds of the one couple who designed their house to have a sunken master bedroom and then three marble steps up to the tub.
So no, I don't think of it in terms of "last house". Though if we get the one with the weird master bedroom it might be, the first time I slip and fall getting out of the tub.
We have seen some truly bizarre designs. Many "what were they thinking" moments.
Here's one for your delectation. We drove by; the exterior and grounds are beautifully done. But the inside, oh the inside... You have to see it.
I've always wanted a gilded antelope skull over my bed.
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