[lottin]

You're talking about unrealised profits. In order for the profits to be realised you need to sell the house. So what happens then? Either you keep the profits and are left without a house, or you buy another house and are left without a profit. Because, you see, it's not only your particular house that has appreciated, all houses have.

[techsupporter]

Yep. I own where I live in Seattle and some of my younger-than-me friends and colleagues are routinely "you're so lucky, you're sitting on a gold mine!"

Maybe so, but the sizzling hot housing market means I can't ever move to another place I own because, like you said, I'd have to take all of that appreciation and plow it right back into another property. Never mind that anything north of the ship canal is still completely unaffordable by my standards (that is, $450k or less, which is still a staggering sum of money in my world).

I'd much rather do like the grandparent and have those gains as actual money in a 401k, not theoretical money in a house that I'd have to practically leave the time zone to realize.

[all_blue_chucks]

What you say is true only if you never downsize and never leave a hot market. Realistically most people will book those profits when they no longer need to live next to a job center. When you don't need that downtown job anymore you can sell a million dollar house in a big city and buy a nicer house for half that elsewhere, pocketing the other half million as pure, tax-free profit.

[perl4ever]

"What you say is true only if you never downsize and never leave a hot market."

What you say is true only if you know exactly when to downsize and leave a hot market.

It can be the case that housing will always be more valuable in one place than another. But it can't be the case that the rate of increase will always be dramatically higher, because that will lead to a runaway differential. Therefore you have to expect a correction at a time that is uncertain.

[all_blue_chucks]

No, that's simply incorrect. The rising tide of inflation will lift expensive house prices more than inexpensive house prices. And no matter where you live, there is always a cheaper place you can go to when you sell your home. It's called a cost of living arbitrage.

[loco5niner]

What you say requires "timing the market". It's possible to get lucky and decide to retire at JUST the right time, have kids leave for college at JUST the right time, etc. More likely, the "hot market' will drop before you capitalize.

[conanbatt]

ITs still a good result: you can sell the house and rent, or move to a place where house appreciation wasnt so pronounced.

Real-estate does give leveraged wins.

[Redoubts]

Dumping all my wealth into one leveraged asset sounds scary as shit.

[conanbatt]

Stocks have higher volatility that housing, for sure. What might be scary is the leverage.