How much of your net worth does your home represent?

[nash031]

30-35%. We're still accumulating, but it's interesting to think about.

3.5 years ago when we purchased our house, it accounted for ~1/3 based on the down payment alone.

About 2 years ago, it accounted for about 1/3 because we paid down a HELOC we'd used to avoid a "jumbo mortgage." So HE almost doubled, but so had our invested stash.

Now, we've just made payments as usual, but continue accumulating and it's dropped below 1/3 but probably right around 30%. As home equity goes up slowly, so does our investment account more rapidly. By the time we turn 40, I would estimate our HE will be <25% of NW, and by target retirement age, I'm guessing closer to 20%.

Then we'll sell, move and pay cash in a less expensive area. :-) As rodi said, it's all about location. Our house is the smallest stand-alone in the area, but it's still above median price for the county and like quadruple the median price of places in "flyover country." Hopefully the market springs ahead and our HE grows over the next five years or so, helping the ER dream right along!

[bjorn2bwild]

I have been a fleet footed renter for the past 13 years - so 0% NW, or 12% of gross earned income for rent.
If I settle down and buy a residence again, it will be a home on acreage - I would be OK with up to 20% of NW at that time.

[mickeyd]

Never thought about it before but I guess that the number is <10%.

[Jackanory]

If Zillow is to be believed, then it's over 30% -- closing in on 3 times what I paid for it back in '98.

[rodi]

The San Diego posters seem to all be around/above 30%. I don't think it means we've got smaller nest eggs, or bigger houses... just means we live in a pricey area. Median sales price (vs list price) is $466k for San Diego metro per zillow
San Diego Home Prices and Home Values - Zillow

I know Nash is in one of the priciest neighborhoods in the county. Mine isn't quite as pricey - but still much more expensive than a reasonable person would expect. I was fortunate to purchase the home I grew up in - and transfer the original Prop13 tax rate from my dad. That's the one thing that made this home affordable with two professional incomes. (That and a huge downpayment.)

[RetireAge50]

20% house/net worth.
12% house/(PV of lifetime cash flows+ house)


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[rodi]

Quote:

Originally Posted by Jackanory If Zillow is to be believed, then it's over 30% -- closing in on 3 times what I paid for it back in '98.

Zillow is crazy... at times it makes sense - but it gets skewed a lot by *asking* prices, and less so by *closing* prices (which are a true indicator of the market).

I didn't use zillow in my estimation - I just checked zillow and it looks like I underestimated my home value by 200k.... but that's not a "real" number... My number was based on actual comps on my block.

[aja8888]

When my BIL, who lives in Sunnyvale, CA, told me what his house was on the market for, I was shocked as it's the same size as our home in Texas but 5 or more times the value....his response was "in California we have different money than you...ours has more zeros on the end."

[Walt34]

I'm guessing about 30% but we also have a COLA'd pension of the type that is virtually extinct now. If we had to buy an equivalent annuity it would cost many millions.

Suffice it to say that my former employer sincerely wishes that I would die. And soon.

[Meadbh]

Quote:

Originally Posted by W2R Those who are living in SF, Manhattan, or other areas where the cost of housing is high, should not feel bad about this poll! You are paying for location (location, location, location) as well as for the house when you buy a house. These are simply choices that we all make; some prefer to spend money to be in a certain location, with various advantages, and others might prefer to spend more on travel or other expenses. There is no One True Way to spend money. That said, this poll is encouraging me to think that 10%-11% isn't an unusually huge amount to spend on my next home, even here where home prices are lower. I am SUCH a homebody, that it makes sense for me to spend more on my home than some. Honestly I would spend up to 16% without batting an eye, if I had to and if I could recoup that much on resale. But here, I don't have to and would never get it back on resale of a house small enough for just me.

I completely agree. Each one of us has to decide what is important to us. Having an anjoyable home is such a pleasure, especially when one spends a lot of time there. I personally enjoy travel as well, so I have always made sure I was not "house poor". By maintaining a modest home, I have most of my net worth working for me.

[6miths]

Probably about 15% without including SS.

[jollystomper]

20% of the net worth figure I use, which does not include the value of my future SS or pension cash flows.

[tboinferno]

Great question! Mine is slightly less than 7%. Was probably smart to avoid trying to keep up with the Jones and preferred investing excess funds into something that would generate cash flow rather than a cash drain. Now that we are "empty nesters" the size is just about perfect again.


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[Bestwifeever]

Ours comes to 7 percent based on tax assessor valuation but never mind that, I am LOVING this net worth that includes lump sum extrapolation of Social Security and pension. Can I add a pie-in-the-sky inheritance that is most unlikely just to make me feel even more like Lovey Howell?

[nash031]

Quote:

Originally Posted by rodi I know Nash is in one of the priciest neighborhoods in the county.

We're in the Cays, which knocks off a lot of the price, and then it's the smallest stand-alone in the Cays. Hence, Zillow overestimates the value by about $100K. But yeah, still could get a lot (a LOT) more house in Eastlake, Escondido... hell, just about anyplace outside of SFO and NYC...

[BBQ-Nut]

Not counting SS or Pension income as part of net worth, our home represents about 22% of our net worth.

At some point in the future, we will probably cashout, downsize, and be one of those out of state couples lower cost of living state residents hate when we buy our home outright.

However, for estimating the decision to FIRE, the home equity is not part of any calculations.

[ExFlyBoy5]

Mine is at 12% not including SS since that number is FAR off for me.

As for Zillow...when my DW was still buying/selling RE, she called Zillow and HGTV "The Devil" since clients would try to use both sources as "reliable sources". The numbers are always WAY off (in Texas anyway, which is a non-disclosure state) and WAY WAY off for our home here in GA. If I could believe Zillow, I could have sold this house 2 months after I bought it and made a sweet $110K profit!!!

[daylatedollarshort]

Quote:

Originally Posted by aja8888 When my BIL, who lives in Sunnyvale, CA, told me what his house was on the market for, I was shocked as it's the same size as our home in Texas but 5 or more times the value....his response was "in California we have different money than you...ours has more zeros on the end."

So I'm guessing you'd rather live where you don't have to pay $1.8M for a former hoarder house?

Hoarder House In Palo Alto Is On the Market for $1.8 Million

[NW-Bound]

I chose 11% for my main home (and double that for both homes, but the instruction said not to count the 2nd home).

Net worth calculation includes both homes, but not SS as I do not know how to account for the latter.

[ProspectiveBum]

It would be nice to have a net worth large enough that our home was only a single digit percentage of the overall pile. We'd have to win the lotto to see that happen with our current place. Our SoCal home's value is 48% of our total net worth (which doesn't include any SS). Our house is a fairly standard tract home (not a McMansion) in an upper-middle class neighborhood with excellent schools. We bought the place 15 years ago, and the value has more than doubled since then, to $815k.

In 10-15 years, when the kids have grown and moved out on their own, we'll sell it and use the proceeds to buy a much smaller place and bank the rest.

For reference, I'm 42, and DW is 46.