How much of your net worth does your home represent?

[RetireAge50]

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


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[rodi]

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]

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]

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]

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.

 

[aja8888]

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

Wow! I would guess the contents go with the house, therefore pushing the price up a bit. Crazy.

We used to live in Thousand Oaks (Ventura County) back in the mid-1980s. Loved the place (back then). Very crowded now that it's the home of Amgen.

 

[MichaelB]

Our primary residence is somewhere between 10-15% of our net worth, not including pension or social security. If we include the NPV of those cash flows it's between 10-15%. The assessed value is between 7-10%, but I don't think the assessed value has much relevance to anything but hedonics.

 

[NW-Bound]

... Our house is a fairly standard tract home (not a McMansion) ... 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 ...

Is the new place still in CA? If so, it will be even smaller.

 

[luckydude]

5.8%.

 

[ProspectiveBum]

Is the new place still in CA? If so, it will be even smaller.

For sure. A nice 1200sf place in Temecula or the Coachella Valley would be perfectly agreeable, and would free up 500k.

 

[NW-Bound]

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

Wow! "... cracked-on-the-outside, hoarder-on-the-inside". Nice!

Listing said "Property is not habitable. Property is located in a flood zone. Prospective buyers to drive or walk around property only."

Hurry up. Deal like this at $1.8M would not last long. Here's the curb appeal. Don't you feel love at first sight?

 

[rodi]

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

It's possible to get a nicer house for 1.8M in Palo Alto. I have good friends that recently did. They were able to buy an Eichler house (mid century modern) in Palo Alto for 1.8. Fortunately, they're used to living small - it's only 1600sf... but the layout works for them.

Their rental they lived in prior to purchase sounds more like the hoarder house - small rooms, not a lot of light, etc.. But the rent was still super pricey.

His google salary doesn't go as far as his qualcomm salary did when you look at home values.

 

[photoguy]

It's possible to get a nicer house for 1.8M in Palo Alto. I have good friends that recently did. They were able to buy an Eichler house (mid century modern) in Palo Alto for 1.8. Fortunately, they're used to living small - it's only 1600sf... but the layout works for them.

There's almost nothing listed in zillow for under 1.8M in palo alto now -- I'm very curious as to what the final sale price may be (it's listed pending). It maybe that the market moved somewhat (it can jump quite quickly even in a few months).

The listed house is on Middlefield road between embarcadero and university. This is an awesome spot. I have no doubt that a developer is going to buy this and put a $4M house there instead.

When we were selling our house in San Jose, a developer bought a 6000 sq ft lot (with a free house) for 800k just a few blocks from us. Although we were in a pretty nice area (willow glen), it's certainly no palo alto.

 

[NW-Bound]

A $4M house in a flood zone? I dunno.

 

[photoguy]

In regards to the poll, we're at 0% right now (renting). When we were in San Jose (8 months ago) we were at 35%. If we buy a new place, we'll be targeting 15%.