If My Modest Home Keeps Doubling In Value,

In 20 short years, I’ll be worth 64 million dollars…is that sustainable?

Photo by Joachim Lesne on Unsplash

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.

A plateau may sound more palatable but with interest rates climbing, it’s going to take more than a 5% or 10% pricing correction to allow young, first-time homebuyers a chance to get into their starter homes and experience the American dream many of us in our 50’s and up, are experiencing.

Have we closed the door on anyone under 30 ever realistically owning a home or being able to experience the same kind of astronomical appreciation of assets that so many of us have become used to enjoying?

The great resignation

It sure does seem many teenagers' and young adults’ brains have been reorganized around bright, flashing lights, sounds, videos, pictures, popularity, influence, and gaming.

Though we shouldn’t underestimate their intelligence, prescience, or innate, nearly clairvoyant, knowledge of what’s to come….to…and for…THEM.