If My Modest Home Keeps Doubling In Value,
In 20 short years, I’ll be worth 64 million dollars…is that sustainable?
The good news
Many of us are excited, confused, and strangely numb over the equity that’s exploded in our homes over the past few years.
This headline isn’t clickbait, my home (not pictured), was worth $220,000 in 2019 and is now worth close to half a million dollars. As are the homes of my neighbors, some of whom paid as low as $165,000 (new) for a home now worth close to $600,000 — that’s some serious equity!
Should homes continue to double every 3 years, I’d be sitting on a 64 million pile of bricks, wood, and wires in 20 years….though, if that happens, I can’t imagine the cost of a loaf of bread.
The Bad news
Those of us who lived through the housing crash of 2008, with stocks falling 50% and bankers getting away with pillaging the country, know fuzzy math doesn’t add up. Nothing can appreciate 100% every few years without becoming unaffordable to nearly everyone.
It is true more people (and corporations) paid cash since 2008, or provided large down payments, thus reducing the risk for banks to have to bail people out. Still, nobody’s arguing homes can appreciate at this rate for much longer without a significant correction.
